Welcome!
Bio
I am a research fellow at the National University of Singapore, Yong Loo Lin School of Medicine, Center for Behavioural and Implementation Science Interventions (BISI). I received my PhD in economics from the University of Califonia, Santa Barbara in 2024.
I am a Behavioral and Experimental Economist with an interest in belief updating, information economics, and health economics.
I am also a competitive contract bridge player and have represented Singapore in various international events with notable finishes. Most notably, I was the 2017 Asia Pacific Under-25 Youth Pairs Champion and the youngest member of the Singapore Contract Bridge team to qualify for the 2018 Asian Games. Bridge has influenced my research by offering insights into human behavior.
Contact: ken_chan[at]nus.edu.sg
Research
Working Papers
An Axiomatic Model and Test of Grether (1980) and Bayes' Rule [pdf]
What axioms do I need to be Bayesian? People satisfy the axioms required for comparative statics and Grether (1980) model.
Abstract: This paper presents an axiomatic characterization of the Grether (1980) model centered around the preservation of the Monotone Likelihood Ratio Property (MLRP). I show that Bayesian updating can be primarily characterized by the preservation of MLRP and the martingale property. Using this representation result, I identify a class of non-Bayesian updating rules where we can obtain useful comparative statics across different signal realizations in canonical belief updating problems. I also conducted an experiment to test the axioms that can be used to characterize Bayes’ rule to identify why are people non-Bayesian. At the individual level, most axioms are violated to some degree. However, I find that the violation of the preservation of MLRP is not too severe. This provides some validation for the widely used Grether (1980) model, and it suggests that comparative statics predictions across different signal realizations and prior beliefs in a decision problem with belief updating are likely to hold.
How Much Can I Make? Insights on Belief Updating in the Labor Market [pdf] (with Sebastian Brown) -- This is Sebastian's JMP!
People tend to adjust their beliefs too much.
Abstract: We use a nationally representative survey, the labor supplement of the Survey of Consumer Expectations, to study how people update their wage expectations over time. Using a recently developed excess belief movement test for the martingale property (Augenblick and Rabin, 2021), we find strong evidence of non-Bayesian learning at the aggregate level. Among survey respondents who responded at least twice to the survey, we find an average movement in beliefs that is roughly 513% of the uncertainty reduction in their beliefs, 413% more than the Bayesian benchmark. This result is consistent with base rate neglect and overreaction to signals. Our simulation shows that this result is unlikely to be explained solely by measurement error. We also found patterns of asymmetric updating, where individuals update their beliefs more when they receive good wage offers relative to bad wage offers.
On Prior Confidence and Belief Updating [pdf] (with Gary Charness, Chetan Dave and Lucas Reddinger)
Confidence matters even when it shouldn't, and it doesn't matter when it should.
Abstract: We investigate the difference between confidence in a belief distribution versus confidence over multiple priors using a lab experiment. Theory predicts that the average Bayesian posterior is affected by the former but is unaffected by the latter. We manipulate confidence over multiple priors by varying the time subjects view a black-and-white grid, of which the relative composition represents the prior. We find that when subjects view the grid for a longer duration, they have more confidence, under-update more, placing more weight on priors and less weight on signals when updating. Confidence within a belief distribution is varied by changing the prior beliefs; subjects are insensitive to this notion of confidence. Overall we find that confidence over multiple priors matters when it should not and confidence in prior beliefs does not matter when it should.
Experimental Evidence on the Behavioral (In)efficiency of Market Institutions [pdf] (with Samuel Fahim)
Posting prices is more efficient and equitable than bargaining.
Abstract: In this paper, we aim to evaluate the efficiency of three markets: price posting with directed search, price bargaining with directed search, and price bargaining with a guaranteed match using a lab experiment. Theory predicts that when the matching is guaranteed, the good is always traded under Nash bargaining, and efficiency will be highest in price bargaining with a guaranteed match. Moreover, sellers should receive a larger surplus in the price posting market with directed search. Our experimental data says otherwise. Through price posting with directed search, subjects were able to achieve higher efficiency outcomes compared to markets with bargaining, and achieve the most equitable outcome. Finally, when eliciting subject's preference for market institution, we find that the price posting market with directed search.