Research
Published Work
Journal of Economic Behavior and Organization, 2023
Abstract: As is well-known, choices of a decision maker (DM) who attempts self-control in the face of temptation may exhibit menu effects and “non-standard” patterns. Existing models can accommodate some of these patterns but not others; e.g., they can explain self-control undermining menu effects, but not self-control enhancing ones. We introduce a model of self-control with the goal of better understanding and accounting for such effects. The basic idea underlying our model is that the DM experiences a psychological cost if she succumbs to temptation and chooses in a manner that is totally antithetical to her commitment preferences. To mitigate such costs, in any menu, her expression of self-control involves, first, eliminating a subset of alternatives that are worst according to her commitment preferences, with the elimination process being reference-dependent. Then, amongst the remaining alternatives, she chooses the best one according to her temptation preferences. Besides studying menu effects, we characterize the model behaviorally based on a novel axiom called WARP with norms. We also show that the model is well-identified.
Arrowian social equilibrium: Indecisiveness, influence and rational social choices under majority rule (joint with Abhinash Borah and Nitesh Singh)
B.E. Journal of Theoretical Economics, 2022, https://doi.org/10.1515/bejte-2021-0149
Abstract: We introduce the concept of an Arrowian social equilibrium that inverts the schemata of Arrow (1950)’s famous impossibility theorem and captures the possibility of aggregating non-rational individual preferences into rational social preferences while respecting the Arrowian desiderata. Specifically, we consider individuals whose preferences may not be complete and who, accordingly, may be indecisive when faced with an issue. Breaking with tradition, we consider the possibility of such individuals drawing on their beliefs about society’s preferences that result from the aggregation process to resolve their indecisiveness. Formally, individual choices are modeled as a rational shortlist method (Manzini and Mariotti, 2007), with own preferences followed by society’s as the pair of ordered rationales. This results in a mutual interaction between individual and social choices. We study this interaction using majority rule as the aggregator, with an Arrowian social equilibrium specifying how individual and social choices are co-determined, while requiring the latter to be rational. Our main result identifies minimal levels of societal indecisiveness needed to guarantee the existence of such equilibrium.
Economics Bulletin, 2021, Volume 41, Issue 4, 2348-2355
Abstract: We model the behavior of a decision maker (DM) who is psychologically constrained from choosing according to her tastes by her normative preferences that capture her values and ideals. In any menu, choosing the worst alternative according to her normative preferences may produce overwhelming feelings of guilt. Hence, to mitigate such feelings, she eliminates this alternative and chooses the best amongst the remaining ones according to her tastes. We formally define this sequential choice procedure and behaviorally characterize it. We show that the parameters of the model—the DM’s tastes and norms—can be (almost) uniquely identified from choices. We also highlight the model's implications for "non-standard" choices.
Working Papers
Patriarchal gender norms: A life-cycle model of education, marriage, and labor supply choice
Abstract: We examine the role of patriarchal gender norms in women’s lifetime decisions of education, marriage, and labor supply in an equilibrium setting. In our model, patriarchal gender norms work through the institution of marriage. Specifically it manifests itself in the belief, internalized by both men and women, that a woman’s labor and efforts are more central than that of a man in sustaining domestic married life, with deviations from this norm being psychologically costly for both. This norm determines household decisions like allocation of time to market and domestic labor. At the same time, it feeds through equilibrium interactions into the choice of education level that individuals make earlier in life and the subsequent structure of matches in the marriage market. In line with the empirical evidence, our model finds that a wife puts in less labor hours in the market and more at home than her husband. The model predicts that for any wage level, and patriarchal gender norm not high enough, men contribute more time to domestic hours in assortative than in non-assortative households. We find that the proportion of men with a higher level of education exceeds that of women. This proportion varies with the strength of the gender norm, leading to a change in the structure of the marriage market. In particular, we find that the proportion of non-assortative households rises as the patriarchal gender norm strengthens. For different levels of patriarchal gender norms and wages in the labor market, we characterize the structure of the marriage market and corresponding equilibrium outcomes. We empirically test for the implications of the model using a robust measure of patriarchy, and education and time use data from various national representative surveys.
Social influence within clusters and stochastic choices (joint with Abhinash Borah, Ojasvi Khare, Nitesh Singh)
Abstract: We introduce a theory of socially influenced stochastic choices. Social influence in our theory originates in the fact that individuals in society often form clusters, e.g., clusters on social media like echo chambers, political clusters formed along partisan lines, clusters in friendship networks, etc. When such clusters form, it is natural for individuals to be influenced by dominant modes of behavior within their cluster. To model this, we propose a choice procedure under which, in any menu, the probability with which a decision maker considers an alternative is influenced by how likely, on average, is this alternative to be chosen in her cluster. Her choice probabilities, in turn, are determined from these consideration probabilities according to the random consideration set rule of Manzini and Mariotti (2014). Given that influence within clusters is mutual, this procedure is an interactive one. We establish that these interactions are mutually consistent and that such choice profiles exist. We behaviorally characterize the procedure. Further, we establish that the procedure has the desirable feature that it can be uniquely identified from choice data, i.e., clusters that form in society, individual preferences, and idiosyncratic susceptibilities to influence are all uniquely identified from behavior.
Abstract: We consider the class of choice functions that satisfy the never chosen (NC) and no binary cycles (NBC) conditions, which are two empirically relevant choice consistency conditions weaker than WARP. The question that we ask is whether choice functions from this behavioral domain have a common structure that can be meaningfully characterized in terms of a decision criterion. We show that this is indeed the case—any such choice function can be represented as a sequential shortlisting procedure based on two linear orders that are in direct conflict. Moreover, any such procedure can be uniquely identified from choice data.