Journal of the European Economic Association, Jun 9, 2020
We develop a general framework to study source-dependent preferences in economic contexts. We beh... more We develop a general framework to study source-dependent preferences in economic contexts. We behaviorally identify two key features. First, we drop the assumption of uniform uncertainty attitudes and allow for source-dependent attitudes. Second, we introduce subjective prices to compare outcomes across different sources. Our model evaluates profiles source-wise, by computing the source-dependent certainty equivalents; the latter are converted into the unit of account of a common source and then aggregated into a unique evaluation. By viewing time and location as instances of sources, we show that subjective discount factors and subjective exchange rates are emblematic examples of subjective prices. Finally, we use the model to explore the implications on optimal portfolio allocations and home bias.
We introduce an algorithmic decision process for multialternative choice that combines binary com... more We introduce an algorithmic decision process for multialternative choice that combines binary comparisons and Markovian exploration. We show that a preferential property, transitivity, makes it testable.
We study monotone, continuous, and quasiconcave functionals defi ned over an M-space. We show tha... more We study monotone, continuous, and quasiconcave functionals defi ned over an M-space. We show that if g is also Clarke-Rockafellar differentiable at x and 0 62 @CRg (x), then the closure of Greenberg- Pierskalla differentials at x coincides with the closed cone generated by the Clarke-Rockafellar differentials at x. Under the same assumptions, we show that the set of normalized Greenberg-Pierskalla differentials at x coincides with the closure of the set of normalized Clarke-Rockafellar differentials at x. As a corollary, we obtain a differential characterization of quasiconcavity a la Arrow and Enthoven (1961) for Clarke-Rockafellar differentiable functions.
Journal of the European Economic Association, Jun 9, 2020
We develop a general framework to study source-dependent preferences in economic contexts. We beh... more We develop a general framework to study source-dependent preferences in economic contexts. We behaviorally identify two key features. First, we drop the assumption of uniform uncertainty attitudes and allow for source-dependent attitudes. Second, we introduce subjective prices to compare outcomes across different sources. Our model evaluates profiles source-wise, by computing the source-dependent certainty equivalents; the latter are converted into the unit of account of a common source and then aggregated into a unique evaluation. By viewing time and location as instances of sources, we show that subjective discount factors and subjective exchange rates are emblematic examples of subjective prices. Finally, we use the model to explore the implications on optimal portfolio allocations and home bias.
We introduce an algorithmic decision process for multialternative choice that combines binary com... more We introduce an algorithmic decision process for multialternative choice that combines binary comparisons and Markovian exploration. We show that a preferential property, transitivity, makes it testable.
We study monotone, continuous, and quasiconcave functionals defi ned over an M-space. We show tha... more We study monotone, continuous, and quasiconcave functionals defi ned over an M-space. We show that if g is also Clarke-Rockafellar differentiable at x and 0 62 @CRg (x), then the closure of Greenberg- Pierskalla differentials at x coincides with the closed cone generated by the Clarke-Rockafellar differentials at x. Under the same assumptions, we show that the set of normalized Greenberg-Pierskalla differentials at x coincides with the closure of the set of normalized Clarke-Rockafellar differentials at x. As a corollary, we obtain a differential characterization of quasiconcavity a la Arrow and Enthoven (1961) for Clarke-Rockafellar differentiable functions.
Uploads