Dr. Guy Barokas
Researcher in Choice theory, Welfare economics, and Happiness.
Working papers
Revealed prefrence for intertemporal choice
Abstract
It has long been recognized that owing to our “defective telescopic faculty” and self-
control problems, we tend to reveal choices that are more present oriented than our
actual preferences. In this paper, we accordingly generalize the standard revealed
preference theory to an intertemporal setting. specificlly, we deÂ…fine a revealed patience relation in which a consumption plan c is directly revealed preferred to a consumption plan c' if and only if c is chosen when c' is available, and replacing c' with c only entails deferring consumption. Revealed patience is shown to be applicable directly to any data set that contains choices between consumption plans and to result with novel normative implications. The resulting framework lends itself to a principle of
reÂ…nement. When applying to the classic Strotz model, the refiÂ…ned principle identiÂ…es
the agentÂ’s underlying preferences uniquely with a well-founded normative preferences. This allows us to provide complete axiomatic characterization for the Strotz model and its special case, the familiar beta-delta model, by identifying behavior through normatively inferior choices.
JEL codes: D03, D60, D90
Rational Choice with Preference for Comparability and Asymmetric Dominance
Abstract
Motivated by abundant empirical evidence, the main objective of this
paper is to propose a rational choice theory that allows for the attraction
effect. We suitably relax the weak axiom of non-inferiority (Eliaz and Ok 2006), and derive a choice theory that accommodates a moderate attraction
effect and lies within the rational choice paradigm, both in the sense of
rationalizability and of immunity to the classic money pump argument.
We further show that the most notable feature of Eliaz and Ok, the possibility (under
mild conditions) to distinguish between indi¤erence and indecisiveness, is
extended to our theory. On top of that, for an intuitive choice model
within our theory complete preferences inference is possible without any
prior assumptions. Finally, we obtain a version of the expected multi-
utility representation theorem (Dubra et al. 2004]) that, in contrast with the
version presented in Eliaz and Ok, is compatible with the attraction effect.
JEL codes: D11, D81
Revealed prefrences over menus
Abstract
Revealed preferences over alternatives rather than over menus is usually insufficient (e.g: for a social planner who wishes to provide several types of public education). In such cases, it is standard practice to assume (often implicitly) that decision makers evaluate each menu according to its best element. However, in practice, this assumption is often violated (due to, for example, search costs or the disutility from resisting temptation). In this paper, we substantially relax the .Best Element Evaluation assumption, and we show how preferences over menus can still be revealed from standard choice data. Further, we characterize our model by means of testable conditions on choice behavior, demonstrate its normative and descriptive advantage over the standard rational choice theory, and relate it with Simon.s (1955) satisficing procedure.