Publications  
scroll down for working papers 

Foundations of Intrinsic Habit Formation 

Econometrica, 78(4):1341-1373, July 2010

[download the online appendix] 

 

Do habit formation models have testable implications? This paper provides axiomatic foundations for a nested family of habit formation models. The axiomatization introduces an intertemporal theory of weaning a decision-maker from her habits using the device of compensation. I clarify differences across specifications of the model, provide measures of habit-forming tendencies, and suggest methods for axiomatizing other time-nonseparable preferences.



Competing for Consumer Inattention

Coauthored with Geoffroy de Clippel and Kfir Eliaz

Journal of Political Economy, 122(6):1203-1234, December 2014 (lead article)

 

How do markets respond when consumers are able to examine only a limited number of markets for the best price? A firm’s price can deflect or draw attention to its market, and consequently, limited attention introduces a new dimension of cross-market competition. We characterize the equilibrium of a stylized model capturing these features, and show that having consumers who are only partially attentive increases consumer welfare. With less attention, consumers are more likely to miss the best offers; but enhanced cross-market competition decreases average price paid, as leading firms try to stay under the consumers’ radar. 



Conflict Leads to Cooperation in Demand Bargaining

Journal of Economic Behavior & Organization, 87:35-42, March 2013

[download a related article I wrote for VoxEU] 

 

I consider a multilateral demand game in which myopic players come to the bargaining table with requests for both coalition partners and a potentially generated resource. Highlighting group dynamics, we show how the myopic actions of players may lead to the break up of groups in the short run, but can ultimately bring about a situation from which a strictly self-enforcing allocation can be reached. 



Wasteful Sanctions, Underperformance and Endogenous Supervision

Coauthored with David Miller

American Economic Journal: Microeconomics, 6(4):326-361, November 2014 

 

What do optimal contracts look like in teams where agents have many opportunities to shirk, tasks can be stochastically infeasible, and incentives are provided informally, using wasteful sanctions like guilt and shame, or slowed promotion? These features give rise to optimal contracts with underperformance, forgiving sanctioning schemes, and endogenous supervision structures. Agents optimally take on more assigned tasks than they intend to complete, leading to the concentration of supervisory responsibility in the hands of one or two agents. This arises for statistical reasons, despite the symmetry of players and tasks.



History-Dependent Risk Attitude

Coauthored with David Dillenberger

Journal of Economic Theory, 157:445-477, May 2015

 

We allow a decision maker’s risk attitute to be affected by his history of disappointments and elations. The decision maker classifies realizations of compound risks as disappointing or elating using a threshold rule. We establish equivalence between the model and two cognitive biases: risk attitude is reinforced by experience (there is greater risk aversion after disappointment than elation) and there is a primacy effect (early outcomes have the greatest impact). 



Rationalizing Choice with Multi-Self Models

Coauthored with Attila Ambrus

Economic Journal, 125:1136-1156, June 2015

 

Do models where multiple selves or individuals are aggregated into a collective decision have testable implications? Our negative result holds for a large class of models, even when the researcher has a fully specified theory of how preferences are aggregated. We establish the result by finding a linear relationship between the number of selves and the set of choice functions that a given model is guaranteed to rationalize with a given number of selves. The latter set is connected to the number of IIA violations implied by the choice function, a new measure of irrationality that we propose.


Optimism and Pessimism with Expected Utility 
Coauthored with David Dillenberger and Andrew Postlewaite

Journal of the European Economic Association, 15(5), October 2017

 

This paper shows that Savage’s axioms admit a continuum of other “expected utility” representations in which the probability distributions over states capture forms of pessimism or optimism. When the DM’s choice domain includes both subjective acts and objective lotteries, we explain how optimism, pessimism, and standard Savage agents can be distinguished. 



Working Papers


Bargaining over Contingent Contracts under Asymmetric Information

Coauthored with Geoffroy de Clippel and Jack Fanning

coming soon


The Silent Treatment revised

Coauthored with Geoffroy de Clippel and Kfir Eliaz


In an organization, the attention of an executive decision-maker (principal) is sought by multiple subordinates (agents) eager to have their ideas implemented. Such attention-seeking imposes an externality on the principal, who can only implement one idea per period and may overlook valuable proposals. Her only means of providing incentives is her rule for selecting among proposals, which must be rational for her to follow. Can she design an idea-selection mechanism that circumvents this problem? 


Bounded Rationality and Limited Datasets
Coauthored with Geoffroy de Clippel

Peer-reviewed at NAJ Economics

Revise and resubmit at Econometrica

[download the online appendix]  

 

Theories of bounded rationality are typically characterized over an exhaustive data set. How does one tell whether observed choices are consistent with a theory if the data is incomplete? How can out-of-sample predictions be made? What can be identified about preferences? This paper aims to operationalize some leading bounded rationality theories when the available data is limited, as is the case in most practical settings. 


Fairness Through the Lens of Cooperative Game Theory: An Experimental Approach

Coauthored with Geoffroy de Clippel


This paper experimentally investigates cooperative game theory from a normative perspective. Subjects designated as Decision Makers decide on payoff allocations for three subjects (Recipients) whose substitutabilities and complementarities are captured by a characteristic function. Axioms and solution concepts from cooperative game theory provide valuable insights into the data.


A `Dual' Improved Shortcut to the Long Run

 

This paper provides a duality-based improvement upon Ellison’s radius-coradius for evolutionary games.