Many economic situations involve the timing of irreversible decisions. E.g. People decide when to sell a stock or stop searching for a better price. We analyze the behavior of a decision maker who evaluates his choice relative to the ex-post optimal choice in an optimal stopping task. We derive...

We analyze how to optimally engage in social distancing (SD) in order to minimize the spread of an infectious disease. We identify conditions under which the optimal policy is single-peaked, i.e., first engages in increasingly more social distancing and subsequently decreases its intensity. We...

We characterize the set of extreme points of monotone functions that are either majorized by a given function f or themselves majorize f. Any feasible element in a majorization set can be expressed as an integral with respect to a measure supported on the extreme points of that set. We show that...

We derive the revenue maximizing allocation of m units among n symmetric agents who have unit demand, and who take costly actions that influence their values before participating in the mechanism. The allocation problem with costly actions can be represented by a reduced form model where agents...

We derive the revenue maximizing mechanism for a risk-neutral seller whofaces Yaari's [1987] dual risk-averse bidders. The optimal mechanism offers "full-insurance" in the sense that each agent's utility is independent of other agents'reports. The seller excludes less types than under risk...

Let X be a one-dimensional diffusion and let g : [0, T ] × ℝ → ℝ be a payoff function depending on time and the value of X. The paper analyzes the inverse optimal stopping problem of finding a time-dependent function π : [0, T ] → ℝ such that a given stopping time τ^* is a solution...

Extending the equilibrium concepts of Kőszegi and Rabin (2006, 2007), this paper analyzes the strategic interaction of expectation-based loss-averse players. For loss-averse players with choice-acclimating expectations the utility from playing a mixed strategy is not linear but convex in the...

We study contests in which contestants are homogeneous and have convex effort costs. Increasing contest competitiveness, by making prizes more unequal, scaling up the competition, or adding new contestants, always discourages effort. These results have significant implications: although often...

We consider the two state sequential sampling problem of Wald (1945). We show that any distribution of posteriors can be attained and that the ex-ante cost of attaining any probability distribution over posteriors equals the expected change of the log likelihood ratio. With many states, not all...