1,546 research outputs found
The structure of variational preferences
No full textMaccheroni, Marinacci, and Rustichini (2006), in an Anscombe–Aumann framework, axiomatically characterize preferences that are represented by the variational utility functional V. In this paper, for a given variational preference, we study the class C of functions c that represent V. Inter alia, we show that this set is fully characterized by a minimal and a maximal element. The minimal element, also identified by Maccheroni, Marinacci, and Rustichini (2006), fully characterizes the decision maker’s attitude toward uncertainty, while the novel maximal element characterizes the uncertainty perceived by the decision maker
Dynamic variational preferences
No full textWe introduce and axiomatize dynamic variational preferences, the dynamic version of the variational preferences we axiomatized in [F. Maccheroni, M. Marinacci, A. Rustichini, Ambiguity aversion, robustness, and the variational representation of preferences, Mimeo, 2004], which generalize the multiple priors preferences of Gilboa and Schmeidler [Maxmin expected utility with a non-unique prior, J. Math. Econ. 18 (1989) 141–153], and include the Multiplier Preferences inspired by robust control and first used in macroeconomics by Hansen and Sargent (see [L.P. Hansen, T.J. Sargent, Robust control and model uncertainty, Amer. Econ. Rev. 91 (2001) 60–66]), as well as the classic Mean Variance Preferences of Markovitz and Tobin. We provide a condition that makes dynamic variational preferences time consistent, and their representation recursive. This gives them the analytical tractability needed in macroeconomic and financial applications. A corollary of our results is that Multiplier Preferences are time consistent, but MeanVariance Preferences are not
Replication Data for Working Memory and Attention in Choice
No full textThese are the data necessary for replication of data analysis for the paper:
Working Memory and Attention in Choic
Life satisfaction, household income and personality traits
Get PDFWe show that personality traits mediate the effect of income on Life
Satisfaction. The effect is strong in the case of Neuroticism, which measures the
sensitivity to threat and punishment, in both the British Household Panel Survey
and the German Socioeconomic Panel. Neuroticism increases the usually observed
concavity of the relationship: Individuals with higher Neuroticism score enjoy income
more than those with lower score if they are poorer and enjoy income less if they are
richer. When the interaction between income and neuroticism is introduced, income
does not have significant effect on his own.
To interpret the results, we present a simple model where we assume that (i) Life
Satisfaction is dependent from the gap between aspired and realized income, and this
is modulated by Neuroticism and (ii) income increases in aspirations with a slope
less than unity, so that the gap between aspired and realized income increase with
aspirations. From the estimation of this model we argue that poorer tend to overshoot
in their aspiration, while rich tend to under-shoot. The estimation of the model
also shows substantial effect of traits on income
Life satisfaction, income and personality traits
Get PDFWe show that personality traits mediate the effect of income on Life
Satisfaction. The effect is strong in the case of Neuroticism, which measures the
sensitivity to threat and punishment, in both the British Household Panel Survey
and the German Socioeconomic Panel. Neuroticism increases the usually observed
concavity of the relationship: Individuals with higher Neuroticism score enjoy income
more than those with lower score if they are poorer and enjoy income less if they are
richer. When the interaction between income and neuroticism is introduced, income
does not have significant effect on his own.
To interpret the results, we present a simple model where we assume that (i) Life
Satisfaction is dependent from the gap between aspired and realized income, and this
is modulated by Neuroticism and (ii) income increases in aspirations with a slope
less than unity, so that the gap between aspired and realized income increase with
aspirations. From the estimation of this model we argue that poorer tend to overshoot
in their aspiration, while rich tend to under-shoot. The estimation of the model
also shows substantial effect of traits on income
Group Payoffs as Public Signals
Get PDFWe study experimentally the effect on individual behavior of comparative, but payoff-irrelevant, information in a near-minimal group setting. Specifically, in each round, group members see the groups' cumulative payoffs, which consist of an aggregation of the earnings of each member of the group in the round. Our novel experimental design incorporates two games (the Trust game and the Dictator game) whose payoffs are carefully chosen to ensure cross-game comparability. In the baseline, no comparative information is displayed; the sessions are otherwise identical. Our first set of results shows that the display is sufficient to induce an in-group bias, which can neither be attributed to mere categorization of subjects into groups nor to a stronger sense of group identity as a result of the display. Moreover, we corroborate existing results, which find that, relative to the baseline, the display is welfare reducing in the Trust game. Our second set of results shows that when comparing the allocators' decisions across the two games, a first mover's trust is reciprocated by the second mover independently of group identity
Replication Data for: "Educational Attainment and Intergenerational Mobility: A Polygenic Score Analysis"
No full textThis is the replication package for "Educational Attainment and Intergenerational Mobility: A Polygenic Score Analysis," accepted in 2022 by the Journal of Political Economy
Social decision theory: choosing within and between groups
No full textWe study the behavioral foundation of interdependent preferences, where the outcomes of others affect the welfare of the decision maker. These preferences are taken as given, not derived from more primitive ones. Our aim is to establish an axiomatic foundation providing the link between observations of choices and a functional representation which is convenient, free of inconsistencies and can provide basis for measurement.
The dependence among preferences may take place in two conceptually different ways, expressing two different views of the nature of interdependent preferences. The first is Festinger's view that the evaluation of peers' outcomes is useful to improve individual choices by learning from the comparison. The second is Veblen's view that interdependent preferences keep track of social status derived from a social value attributed to the goods one consumes. Corresponding to these two different views, we have two different formulations. In the first the decision maker values his outcomes and those of others on the basis of his own utility. In the second, he ranks outcomes according to a social value function.
We give different axiomatic foundations to these two different, but complementary, views of the nature of the interdependence. On the basis of this axiomatic foundation we build a behavioral theory of comparative statics within subjects and across subjects. We characterize preferences according to the relative importance assigned to gains and losses in social domain, that is, pride
and envy. This parallels the standard analysis of private gains and losses (as well as that of regret and relief ). We give an axiomatic foundation of inter personal comparison of preferences, ordering individuals according to their sensitivity to social ranking. These characterizations provide the behavioral foundation for applied analysis of market and game equilibria with interdependent preferences
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