Multiple Temptations

We use a preference‐over‐menus framework to model a decision maker who is affected by multiple temptations. Our two main axioms on preference—exclusion and inclusion—identify when the agent would want to restrict his choice set and when he would want to expand his choice set. An agent who is tempted would want to restrict his choice set by excluding the normatively worst alternative of that choice set. Simultaneously, he would want to expand his choice set by including a normatively superior alternative. Our representation identifies the agent's normative preference and temptations, and suggests the agent is uncertain which of these temptations will affect him. We provide examples to illustrate how our model improves on those of Gul and Pesendorfer (2001) and Dekel, Lipman, and Rustichini (2009).     

Dynamic Logit With Choice Aversion

We characterize a generalization of discounted logistic choice that incorporates a parameter to capture different views the agent might have about the costs and benefits of larger choice sets. The discounted logit model used in the empirical literature is the special case that displays a “preference for flexibility” in the sense that the agent always prefers to add additional items to a menu. Other cases display varying levels of “choice aversion,” where the agent prefers to remove items from a menu if their ex ante value is below a threshold. We show that higher choice aversion, as measured by dislike of bigger menus, also corresponds to an increased preference for putting off decisions as late as possible.     

Strategy-proof and Symmetric Social Choice Functions for Public Good Economies

We study economies with one private good and one pure public good, and consider the following axioms of social choice functions. Strategy-proofness says that no agent can benefit by misrepresenting his preferences, regardless of whether the other agents misrepresent or not, and whatever his preferences are. Symmetry says that if two agents have the same preference, they must be treated equally. Anonymity says that when the preferences of two agents are switched, their consumption bundles are also switched. Individual rationality says that a social choice function never assigns an allocation which makes some agent worse off than he would be by consuming no public good and paying nothing. In Theorem 1, we characterize the class of strategy-proof, budget-balancing, and symmetric social choice functions, assuming convexity of the cost function of the public good. In Theorem 2, we characterize the class of strategy-proof, budget-balancing, and anonymous social choice functions. In Theorem 3, we characterize the class of strategy-proof, budget-balancing, symmetric, and individually rational social choice functions.     

Representing Preferences with a Unique Subjective State Space

We extend Kreps' (1979) analysis of preference for flexibility, reinterpreted by Kreps (1992) as a model of unforeseen contingencies. We enrich the choice set, consequently obtaining uniqueness results that were not possible in Kreps' model. We consider several representations and allow the agent to prefer commitment in some contingencies. In the representations, the agent acts as if she had coherent beliefs about a set of possible future (ex post) preferences, each of which is an expected‐utility preference. We show that this set of ex post preferences, called the subjective state space, is essentially unique given the restriction that all ex post preferences are expected‐utility preferences and is minimal even without this restriction. Because the subjective state space is identified, the way ex post utilities are aggregated into an ex ante ranking is also essentially unique. Hence when a representation that is additive across states exists, the additivity is meaningful in the sense that all representations are intrinsically additive. Uniqueness enables us to show that the size of the subjective state space provides a measure of the agent's uncertainty about future contingencies and that the way the states are aggregated indicates whether these contingencies lead to a desire for flexibility or commitment.     

Random Expected Utility

We develop and analyze a model of random choice and random expected utility. A decision problem is a finite set of lotteries that describe the feasible choices. A random choice rule associates with each decision problem a probability measure over choices. A random utility function is a probability measure over von Neumann–Morgenstern utility functions. We show that a random choice rule maximizes some random utility function if and only if it is mixture continuous, monotone (the probability that a lottery is chosen does not increase when other lotteries are added to the decision problem), extreme (lotteries that are not extreme points of the decision problem are chosen with probability 0), and linear (satisfies the independence axiom).     

消费者选择中后悔和不确定性的作用研究

研究当消费者对产品绩效的期望不确定性时,后悔如何影响消费选择的动态变化.数学分析和实验结果表明,当消费者观察或体验到的各个产品选项的表现与原先的期望相吻合,风险厌恶型消费者倾向于提高对初始期望绩效不确定性较高的产品的购买意愿,而风险喜好型消费者倾向于降低对该产品的购买意愿.另外,期望绩效水平的不确定性对消费选择的影响会随消费者经验值的增加而减小.研究成果弥补了现有期望差异理论对解释消费行为动态变化的不足.因此,为了更加全面地理解在多选项选择问题中后悔对消费选择的动态影响,管理者需要考虑备选产品在期望绩效水平不确定性上的差异、相关消费市场的顾客风险偏好构成、消费者的购买经验等特征.     

SMALL PANELS OF EXPERTS IN DICHOTOMOUS CHOICE SITUATIONS*

This paper analyzes an expert resolution problem under an uncertain dichotomous choice situation. The experts share a common system of norms and therefore they all prefer the alternative that best suits their purpose. The selection of such an alternative is referred to as a correct choice. Our analysis of optimal decision rules for panels of independent experts is pursued for n-member decision-making bodies, n≤ 5. The suggested optimality criterion is the maximization of the probability of the panel's making the correct choice. Within our framework, this criterion is equivalent to the more common criterion of expected-utility maximization. For three-member panels of experts, the expert resolution problem is solved and illustrated by means of a medical application. For four-member panels, we list the three relevant decision rules, specify the conditions for all possible rankings of these rules, and, finally, present an extended consulting application. We conclude by listing seven relevant decision rules in the case of five-member decision-making bodies.     

No‐Betting‐Pareto Dominance

We argue that the notion of Pareto dominance is not as compelling in the presence of uncertainty as it is under certainty. In particular, voluntary trade based on differences in tastes is commonly accepted as desirable, because tastes cannot be wrong. By contrast, voluntary trade based on incompatible beliefs may indicate that at least one agent entertains mistaken beliefs. We propose and characterize a weaker, No‐Betting, notion of Pareto domination which requires, on top of unanimity of preference, the existence of shared beliefs that can rationalize such preference for each agent.     

Individual Sense of Justice: A Utility Representation

We present an axiomatic model depicting the choice behavior of a self‐interest seeking moral individual over random allocation procedures. Individual preferences are decomposed into a self‐interest component and a component representing the individual's moral value judgment. Each component has a distinct utility representation, and the preference relation depicting the choice behavior is representable by a real‐valued function defined on the components utilities. The utility representing the self‐interest component is linear and the utility representing the individual's moral value judgment is quasi‐concave. The addition of a hexagon condition implies that the utility representing the individual's preference is additively separable in the components utilities.     

Temptation and Self‐Control

We study a two‐period model where ex ante inferior choice may tempt the decision‐maker in the second period. Individuals have preferences over sets of alternatives that represent second period choices. Our axioms yield a representation that identifies the individual's commitment ranking, temptation ranking, and cost of self‐control. An agent has a preference for commitment if she strictly prefers a subset of alternatives to the set itself. An agent has self‐control if she resists temptation and chooses an option with higher ex ante utility. We introduce comparative measures of preference for commitment and self‐control and relate them to our representations.     

Random Choice as Behavioral Optimization

We develop an extension of Luce's random choice model to study violations of the weak axiom of revealed preference. We introduce the notion of a stochastic preference and show that it implies the Luce model. Then, to address well‐known difficulties of the Luce model, we define the attribute rule and establish that the existence of a well‐defined stochastic preference over attributes characterizes it. We prove that the set of attribute rules and random utility maximizers are essentially the same. Finally, we show that both the Luce and attribute rules have a unique consistent extension to dynamic problems.     

Diminishing Willingness to Pay per Quality‐Adjusted Life Year: Valuing Acute Foodborne Illness

We design and conduct a stated‐preference survey to estimate willingness to pay (WTP) to reduce foodborne risk of acute illness and to test whether WTP is proportional to the corresponding gain in expected quality‐adjusted life years (QALYs). If QALYs measure utility for health, then economic theory requires WTP to be nearly proportional to changes in both health quality and duration of illness and WTP could be estimated by multiplying the expected change in QALYs by an appropriate monetary value. WTP is elicited using double‐bounded, dichotomous‐choice questions in which respondents (randomly selected from the U.S. general adult population, n = 2,858) decide whether to purchase a more expensive food to reduce the risk of foodborne illness. Health risks vary by baseline probability of illness, reduction in probability, duration and severity of illness, and conditional probability of mortality. The expected gain in QALYs is calculated using respondent‐assessed decrements in health‐related quality of life if ill combined with the duration of illness and reduction in probability specified in the survey. We find sharply diminishing marginal WTP for severity and duration of illness prevented. Our results suggest that individuals do not have a constant rate of WTP per QALY, which implies that WTP cannot be accurately estimated by multiplying the change in QALYs by an appropriate monetary value.     

Temptation and Revealed Preference

Gul and Pesendorfer (2001) model the static behavior of an agent who ranks menus prior to the experience of temptation. This paper models the dynamic behavior of an agent whose ranking of menus itself is subject to temptation. The representation for the agent's dynamically inconsistent choice behavior views him as possessing a dynamically consistent view of what choices he “should” make (a normative preference) and being tempted by menus that contain tempting alternatives. Foundations for the model require a departure from Gul and Pesendorfer's idea that temptation creates a preference for commitment. Instead, it is hypothesized that distancing an agent from the consequences of his choices separates normative preference and temptation.     

Large Matching Markets as Two‐Sided Demand Systems

This paper studies two‐sided matching markets with non‐transferable utility when the number of market participants grows large. We consider a model in which each agent has a random preference ordering over individual potential matching partners, and agents' types are only partially observed by the econometrician. We show that in a large market, the inclusive value is a sufficient statistic for an agent's endogenous choice set with respect to the probability of being matched to a spouse of a given observable type. Furthermore, while the number of pairwise stable matchings for a typical realization of random utilities grows at a fast rate as the number of market participants increases, the inclusive values resulting from any stable matching converge to a unique deterministic limit. We can therefore characterize the limiting distribution of the matching market as the unique solution to a fixed‐point condition on the inclusive values. Finally we analyze identification and estimation of payoff parameters from the asymptotic distribution of observable characteristics at the level of pairs resulting from a stable matching.     

Stochastic Choice and Revealed Perturbed Utility

Perturbed utility functions—the sum of expected utility and a nonlinear perturbation function—provide a simple and tractable way to model various sorts of stochastic choice. We provide two easily understood conditions each of which characterizes this representation: One condition generalizes the acyclicity condition used in revealed preference theory, and the other generalizes Luce's IIA condition. We relate the discrimination or selectivity of choice rules to properties of their associated perturbations, both across different agents and across decision problems. We also show that these representations correspond to a form of ambiguity‐averse preferences for an agent who is uncertain about her true utility.     

Cautious Expected Utility and the Certainty Effect

Many violations of the independence axiom of expected utility can be traced to subjects' attraction to risk‐free prospects. The key axiom in this paper, negative certainty independence ([Dillenberger, 2010]), formalizes this tendency. Our main result is a utility representation of all preferences over monetary lotteries that satisfy negative certainty independence together with basic rationality postulates. Such preferences can be represented as if the agent were unsure of how to evaluate a given lottery p; instead, she has in mind a set of possible utility functions over outcomes and displays a cautious behavior: she computes the certainty equivalent of p with respect to each possible function in the set and picks the smallest one. The set of utilities is unique in a well defined sense. We show that our representation can also be derived from a “cautious” completion of an incomplete preference relation.     

Preference Monotonicity and Information Aggregation in Elections

If voter preferences depend on a noisy state variable, under what conditions do large elections deliver outcomes “as if” the state were common knowledge? While the existing literature models elections using the jury metaphor where a change in information regarding the state induces all voters to switch in favor of only one alternative, we allow for more general preferences where a change in information can induce a switch in favor of either alternative. We show that information is aggregated for any voting rule if, for a randomly chosen voter, the probability of switching in favor of one alternative is strictly greater than the probability of switching away from that alternative for any given change in belief over states. If the preference distribution violates this condition, there exist equilibria that produce outcomes different from the full information outcome with high probability for large classes of voting rules. In other words, unless preferences closely conform to the jury metaphor, information aggregation is not guaranteed to obtain.     

Keeping partners together: algorithmic results for the hospitals/residents problem with couples

The Hospitals/Residents problem with Couples (HRC) is a generalisation of the classical Hospitals/Residents problem (HR) that is important in practical applications because it models the case where couples submit joint preference lists over pairs of hospitals (h _i ,h _j ). We consider a natural restriction of HRC in which the members of a couple have individual preference lists over hospitals, and the joint preference list of the couple is consistent with these individual lists in a precise sense. We give an appropriate stability definition and show that, in this context, the problem of deciding whether a stable matching exists is NP-complete, even if each resident’s preference list has length at most 3 and each hospital has capacity at most 2. However, with respect to classical (Gale-Shapley) stability, we give a linear-time algorithm to find a stable matching or report that none exists, regardless of the preference list lengths or the hospital capacities. Finally, for an alternative formulation of our restriction of HRC, which we call the Hospitals/Residents problem with Sizes (HRS), we give a linear-time algorithm that always finds a stable matching for the case that hospital preference lists are of length at most 2, and where hospital capacities can be arbitrary.     

基于方案占优和排序稳健性的多属性决策方法

在多属性决策问题中,不同的属性权重会产生不同的评价结果。由于实际问题的复杂性与不确定性,决策者对于属性权重的确定也存在不确定性。这些不确定既来自现实问题的复杂性和可变性,也来自决策者选择的模糊性与随机性。目前已有的研究主要是将不确定的权重信息转化为相对确定的信息（如转化为区间数等）,硬性地消除了不确定,从而给决策结果带来较大风险。本文从方案排序的视角出发,研究在权重空间下,方案的占优关系和排序的稳健性。首先,定义了占优矩阵用于刻画不确定权重信息下方案两两比较的占优关系;其次,分析了方案的排序区间,即在所有可能存在的权重组合下,方案的最好排序和最差排序。然后,定义了方案的全排序排序概率,并且给出了排序概率的计算方法。进而,我们给出了方法的决策步骤和实施过程。最后,本文将该方法应用到某远洋集团的港口评估当中。     

Early Labour Market Returns to College Subject

Abstract. We estimate early labour market outcomes of Italian university graduates across college subjects. We devote great attention to endogenous selection issues using alternative methods to control for potential self‐selection associated with the choice of the degree subject in order to unravel the causal link between college major and subsequent outcomes in the labour market. Our results suggest that ‘quantitative’ fields (i.e. Sciences, Engineering, and Economics) increase not only the speed of transition into the first job and employment probability but also early earnings, conditional on employment.