BehavFrictions supported the following publications:
1. On the Cost of Misperception: General Results and Behavioral Applications, with Olivier Gossner, Journal of Economic Theory
We explain perception biases as second-best adaptations in situations where perception mistakes are unavoidable but their distribution can be controlled. The framework provides unified explanations for the illusion of control, overprecision, and the overweighting of small probabilities.
2. Selective Sampling with Information-Storage Constraints, with Philippe Jehiel, Economic Journal
We model sequential learning of a decision-maker with bounded memory. The optimal procedure exhibits a bias toward news that confirms prior beliefs, while information contradicting the prior is more likely to be forgotten, consistent with confirmation bias.
3. Habits as Adaptations: An Experimental Study, with Ludmila Matyskova, Brian Rogers, and Keh-Kuan Sun, Games and Economic Behaviour
We experimentally test the dynamic rational-inattention model of Steiner, Stewart, and Matejka (Econometrica 2017). When incentives are serially correlated, repeating one’s own action is a good substitute for costly information acquisition, leading to habit formation. Our lab experiment supports this intuition.
4. Attention Please!, with Olivier Gossner and Colin Stewart, in Econometrica
We propose a mechanism explaining how directing attention to an item increases the likelihood that this target item will be chosen, even if the item is of low value and its inspection is likely to reveal adverse information. The effect arises when the choice process is based on approval learning—that is, when the decision-maker chooses the item once they believe it is good enough. In such cases, attention-grabbing increases the likelihood that the target of the manipulation will be approved before other items in the choice set.
5. Optimal Test Allocation, with Jeff Ely, Andrea Galeotti, and Ole Jann, Journal of Economic Theory
We characterize optimal epidemiological testing when an authority holds a portfolio of tests heterogeneous in their sensitivities and specificities, and the individuals to be tested differ in their pre-test infection probabilities and the costs of possible decision errors.
6. Rotation as Contagion Mitigation, with Jeff Ely and Andrea Galeotti, Management Science
We study organizations, such as schools, that seek to organize member attendance through rotation schemes. We derive the epidemiologically optimal rotation frequencies.
7. Merit of Test: Perspective of Information Economics, with Andrea Galeotti and Paolo Surico, Health Policy and Technology
This short note aimed at medical professionals explains the value of testing from the perspective of economic theory.
8. Boundedly Rational Demand, with Pavel Kocourek and Colin Stewart, Theoretical Economics
The standard notion of consumer surplus is based on the assumption that consumers engage in correct marginal reasoning given the prices. Instead, we assume that consumers may make erroneous choices and provide bounds on consumer surplus given the market data.
9. Decision Theory and Stochastic Growth, with Arthur Robson and Larry Samuelson, American Economic Review: Insights
We study wealth accumulation in a simple stochastic growth process. Depending on the nature of the stochasticity, the choices of the winners of the growth process—who eventually hold nearly all wealth—either coincide with the solution to a rational inattention problem or a related problem of wishful thinking.
