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Investment Tournaments : When Should a Rational Agent Put All Eggs in One Basket?

Schwarz, Michael - 2009

In this paper we study "investment tournaments," a class of decision problems that involve gradual allocation of investment among several alternatives whose values are subject to exogenous shocks. The decision-maker's payoff is determined by the final values of the alternatives. An important...

Persistent link: https://www.econbiz.de/10012463514

Rationalizable Learning

Caplin, Andrew; Martin, Daniel; Marx, Philip - National Bureau of Economic Research - 2023

The central question we address in this paper is: what can an analyst infer from choice data about what a decision maker has learned? The key constraint we impose, which is shared across models of Bayesian learning, is that any learning must be rationalizable. To implement this constraint, we...

Persistent link: https://www.econbiz.de/10013537767

Self-Protection and Insurance with Interdependencies

Muermann, Alexander - 2007

We study optimal investment in self-protection of insured individuals when they face interdependencies in the form of potential contamination from others. If individuals cannot coordinate their actions, then the positive externality of investing in self-protection implies that, in equilibrium,...

Persistent link: https://www.econbiz.de/10012465830

Disentangling Exploration from Exploitation

Lizzeri, Alessandro; Shmaya, Eran; Yariv, Leeat - National Bureau of Economic Research - 2024

Starting from Robbins (1952), the literature on experimentation via multi-armed bandits has wed exploration and exploitation. Nonetheless, in many applications, agents' exploration and exploitation need not be intertwined: a policymaker may assess new policies different than the status quo; an...

Persistent link: https://www.econbiz.de/10014544703

Neighborhood-Based Information Costs

Hébert, Benjamin M. - 2020

We propose a new measure of the cost of information structures in rational inattention problems, the "neighborhood-based" cost functions, given that many applications involve states with a topological structure. These cost functions summarize the results of a sequential information sampling...

Persistent link: https://www.econbiz.de/10012479267

Moral Costs and Rational Choice : Theory and Experimental Evidence

Cox, James C. - 2016

the empirical evidence, showing that recent work challenges convex preference theory but is largely consistent with … rational choice theory. Guided by this understanding, we design a new, more demanding test of a central tenet of economics …, we show that sharing choices violate the contraction axiom. We advance a new theory that augments standard models with …

Persistent link: https://www.econbiz.de/10012456441

Learning and Disagreement in an Uncertain World

Acemoglu, Daron - 2006

Most economic analyses presume that there are limited differences in the prior beliefs of individuals, as assumption most often justified by the argument that sufficient common experiences and observations will eliminate disagreements. We investigate this claim using a simple model of Bayesian...

Persistent link: https://www.econbiz.de/10012466013

Bayesian Persuasion with Lie Detection

Ederer, Florian; Min, Weicheng - National Bureau of Economic Research - 2022

How does lie detection constrain the potential for one person to persuade another to change her action? We consider a model of Bayesian persuasion in which the Receiver can detect lies with positive probability. We show that the Sender lies more when the lie detection probability increases. As...

Persistent link: https://www.econbiz.de/10013210093

Bayesian Persuasion

Kamenica, Emir - 2009

When is it possible for one person to persuade another to change her action? We take a mechanism design approach to this question. Taking preferences and initial beliefs as given, we introduce the notion of a persuasion mechanism: a game between Sender and Receiver defined by an information...

Persistent link: https://www.econbiz.de/10012463109

Delays in Claiming Social Security Benefits

Coile, Courtney - 1999

This paper focuses on Social Security benefit claiming behavior, a take-up decision that has been ignored in the previous literature. Using financial calculations and simulations based on an expected utility maximization model, we show that delaying benefit claim for a period of time after...

Persistent link: https://www.econbiz.de/10012471466

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