Working Papers
Abstract
Why are investors overconfident and trade excessively? Why do patients at health risk avoid testing? Why are voters polarised? Possibly because their beliefs directly influence their well-being, i.e., they have belief-dependent preferences. However, existing theories of belief-dependent preferences struggle to generate testable predictions or to identify simultaneously beliefs and preferences. This paper addresses these issues by providing an axiomatic characterization of a class of preferences and belief-updating rules that deviate from Bayesian updating. Preferences, beliefs, and updating rules are identified from choices over contingent menus, each entailing a menu of acts available at a later time contingent on an uncertain state of the world. The results provide a theory-based approach to experimental designs to test information avoidance, distortion, and other behaviours consistent with belief-dependent preferences.
Abstract
I study the behaviour of individuals who have preferences for universalisation. When considering a course of action, they evaluate the consequence that would occur if everyone else acted equivalently, according to some criterion of equivalence. That is, they universalise their behaviour. I develop and axiomatise a model for individuals who value their choices in light of the consequences they induce when their action is universalised. The key behavioural prediction is that the independence axiom is satisfied only among actions that are universalised equivalently. I impose conditions to single out the most prominent models of universalisation, compare them, highlight and arguably overcome their limitations. I propose a unifying model of universalisation inspired by the equal sacrifice principle.
The Chaining Argument Unchained
Abstract
We argue that the chaining argument against the Trichotomy Thesis is on the horns of a dilemma. Either it is vacuous or it is unsound. Contrary to what it has been commonly assumed, it cannot be used as a reliable basis to adjudicate whether parity does or does not obtain. Stating the premises in a formal syntax that makes them consistent with each other deprives them of their intended meaning and makes the argument vacuous. The reason is that the argument, so stated, establishes a conclusion that is compatible with a variety of natural-language understandings of it that are unrelated to the initial intention of the argument or to the nature of value relations. If, instead, the premises of the argument are expressed in the weakest formal syntax to capture their meaning, the argument is unsound since its premises are inconsistent with each other. Besides demonstrating that the chaining argument does not provide insights into axiology, our result helps orient those interested in proving the existence of parity as a value relation towards alternative arguments.
Work in Progress
Abstract
I introduce a framework for studying different interpretations of meritocracy and testing whether individuals adhere to them. Each meritocracy has two components: a merit criterion, determining when one individual is more meritorious than another, and a reward criterion for each individual, determining when one outcome is more rewarding than another for that individual. An allocation is meritocratic if more meritorious individuals are more rewarded. I distinguish between two conceptions of meritocracy. Meritocracy as an end holds it intrinsically valuable that individuals are rewarded according to their merit. Meritocracy as a means views rewarding merit as instrumental in achieving desirable outcomes according to other standards, such as efficiency. I show that these two conceptions are equivalent: each instance of meritocracy as a means can be associated with a corresponding meritocracy as an end. Finally, I examine two specific meritocracies present in the literature. Pareto meritocracy defines an action as more meritorious if it leads to a Pareto improvement in welfare, whereas proportional meritocracy requires that an individual’s consumption be proportional to the amount of labour he provides. By observing whether allocation choices of impartial spectators align with specific merit criteria, one can test whether spectators adhere to these meritocracies.
Prosocial Preferences, Beliefs, and Demand for Redistribution
Abstract
We develop and test a theory of how beliefs about others' responsiveness to incentives shape preferences for redistribution. In an income taxation model with heterogeneous prosocial preferences, effort distortions from higher tax rates are less pronounced among more prosocial agents. Overly pessimistic beliefs about others' prosociality lead to a relatively low Condorcet-winner tax—even though most agents are poor and/or altruistic. Consistent with our theory, a laboratory experiment shows that informing subjects about others' prosocial preferences significantly increases the demand for redistribution.
A theory of Acting against the Odds
Abstract
‘Acting against the odds’ is acting against one’s evidence that one will succeed. Most of the discussion on the rationality of acting against the odds has focused on whether believing against the odds is rational. In this paper, rather, we address the question of whether acting against the odds can be rational and, if so, under what conditions. First, we provide the first axiomatic characterisation of the preferences of an individual who acts against the odds. Second, we analyse the normative implications of having preferences so characterised. We understand an individual who acts against the odds as an individual who prefers having the agency of increasing the likelihood of attaining a good outcome, which would otherwise be low. To exemplify, an individual might choose to pursue a PhD because she prefers increasing the chances of attaining an academic job by exerting effort. She would not experience such agency while attempting to be successful in other, less risky, careers. Having this preference, we show, is inconsistent with other theories of behaviour under risk such as, prominently, expected utility theory. We thus analyse what behavioural properties a person who acts against the odds satisfy and we specify in which cases this behaviour counts as rational, and in which cases it does not.
