Job Market Paper
Belief-dependent Preferences and Updating (JMP)
Abstract
This paper studies individuals whose well-being is directly influenced by their beliefs. Models of belief-dependent preferences assume that beliefs affect tastes. When beliefs are allowed to influence tastes, it becomes challenging to separately identify tastes and beliefs. Furthermore, individuals may be inclined to depart from Bayesian updating because their posterior beliefs affect their well-being. In this case, the individual's updating rule must be inferred from choices. This paper provides 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, sets of acts available at a later time contingent on an uncertain state of the world. Applications illustrate the model: it explains investors' information avoidance and overconfidence-driven excessive trading, offers a theory-based approach to experimental designs that test information avoidance about the efficiency of transfers in the dictator game, and describes how politicians might use vague information to cater to public preferences and induce polarization.
Working Papers
Abstract
Revealed preference theory equates choices with preferences over the consequences the choice induces. Nevertheless, if a decision criterion prescribes an act for reasons unrelated to its consequences, the inference drawn regarding preferences is misleading. I study the behaviour of non-consequentialist individuals who have preferences for universalisation. They choose the action that, in a counterfactual scenario in which it is chosen by everyone else as well, leads to their preferred consequences. I develop a model for individuals who value their choices in light of a counterfactual consequence these induce. Choice is interpreted as revealing a preference for counterfactual consequences. I impose axioms 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.
Work in Progress
Can Pessimistic Beliefs Threaten Redistribution?
Abstract
We develop and test a theory of how beliefs about other people's responsiveness to incentives shape preferences for redistribution. In a linear income taxation model where agents have heterogeneous prosocial preferences, more altruistic agents distort their labour supply to a lesser extent when the tax rate is higher. If agents have imperfect information on (the distribution of) preferences in the society, overly pessimistic beliefs imply a relatively low Condorcet-winner tax, even though most agents are poor and/or altruist. We develop an experimental design to test this prediction.
Welfarist Meritocracy
Abstract
I develop a framework to conceptualise different understandings of meritocracy. A meritocracy is characterised by a metric of merit and a related reward system. Individuals obtain a higher reward when they score higher on the metric of merit. I focus on a strictly welfarist understanding of these two elements. An individual's action scores higher in the metric of merit than another if it leads to a pareto improvement in welfare. The reward for merit is individual welfare. I show that, under these two assumptions, for any collective action profile, there is a meritocratic reward system implementing it. I thus argue that meritocracy is a vacuous allocation rule when conceptualised through a purely welfarist lens. As a result, I propose that meritocracy should be viewed as a fundamentally non welfarist criterion.