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Subjective expected utility in games
Di Tillio, Alfredo - In: Theoretical Economics 3 (2008) 3, pp. 287-323
This paper extends Savage's subjective approach to probability and utility from decision problems under exogenous uncertainty to choice in strategic environments. Interactive uncertainty is modeled both explicitly, using hierarchies of preference relations, the analogue of beliefs hierarchies,...
Persistent link: https://www.econbiz.de/10011599405
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Twisting the truth: Foundations of wishful thinking
Kovach, Matthew - In: Theoretical Economics 15 (2020) 3, pp. 989-1022
Considerable evidence shows that people have optimistic beliefs about future outcomes. I present an axiomatic model of wishful thinking (WT), in which an endowed alternative, or status quo, influences the agent's beliefs over states and thus induces such optimism. I introduce a behavioral axiom...
Persistent link: https://www.econbiz.de/10013188993
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Subjective expected utility in games
Di Tillio, Alfredo - In: Theoretical Economics 3 (2008) 3
This paper extends Savage's subjective approach to probability and utility from decision problems under exogenous uncertainty to choice in strategic environments. Interactive uncertainty is modeled both explicitly, using hierarchies of preference relations, the analogue of beliefs hierarchies,...
Persistent link: https://www.econbiz.de/10005515725
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Monotone threshold representations
Frick, Mira - In: Theoretical Economics 11 (2016) 3, pp. 757-772
Motivated by the literature on ``choice overload'', we study a boundedly rational agent whose choice behavior admits a \textit{monotone threshold representation}: There is an underlying rational benchmark, corresponding to maximization of a utility function $v$, from which the agent's choices...
Persistent link: https://www.econbiz.de/10011599584
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Pricing and investments in matching markets
Mailath, George J.; Samuelson, Larry; Postlewaite, Andrew - In: Theoretical Economics 8 (2013) 2
Different markets are cleared by different types of prices—seller-specific prices that are uniform across buyers in some markets, and personalized prices tailored to the buyer in others. We examine a setting in which buyers and sellers make investments before matching in a competitive market....
Persistent link: https://www.econbiz.de/10011019204
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Dynamics of information exchange in endogenous social networks
Bimpikis, Kostas; Ozdaglar, Asuman; Acemoglu, Daron - In: Theoretical Economics 9 (2014) 1
We develop a model of information exchange through communication and investigate its implications for information aggregation in large societies. An \textit{underlying state} determines payoffs from different actions. Agents decide which others to form a costly \textit{communication link} with,...
Persistent link: https://www.econbiz.de/10010738405
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Pricing and investments in matching markets
Mailath, George J.; Samuelson, Larry; Postlewaite, Andrew - In: Theoretical Economics 8 (2013) 2, pp. 535-590
Different markets are cleared by different types of prices—seller-specific prices that are uniform across buyers in some markets, and personalized prices tailored to the buyer in others. We examine a setting in which buyers and sellers make investments before matching in a competitive market....
Persistent link: https://www.econbiz.de/10011599491
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Dynamics of information exchange in endogenous social networks
Bimpikis, Kostas; Ozdaglar, Asuman; Acemoglu, Daron - In: Theoretical Economics 9 (2014) 1, pp. 41-97
We develop a model of information exchange through communication and investigate its implications for information aggregation in large societies. An \textit{underlying state} determines payoffs from different actions. Agents decide which others to form a costly \textit{communication link} with,...
Persistent link: https://www.econbiz.de/10011599505
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The loser's curse in the search for advice
Au, Pak Hung - In: Theoretical Economics 14 (2019) 3, pp. 1015-1061
incurring a positive search cost, the agent can consult an expert, whose interest is partially aligned with him. There are … vanishing search cost. The main findings are as follows. First, there are signal structures with which both the agent's payoff …
Persistent link: https://www.econbiz.de/10012215298
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Choice by iterative search
Nakajima, Daisuke; Masatlioglu, Yusufcan - In: Theoretical Economics 8 (2013) 3
analyze every alternative. To capture these situations, we formulate a framework to study behavioral search by utilizing the … idea of consideration sets. Consumers engage in a dynamic search process. At each stage, they consider only those options … identify both search paths and preferences. …
Persistent link: https://www.econbiz.de/10010691959