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on Discrete Choice Models |
| By: | Narvin Kartik; Andreas Kleiner |
| Abstract: | For multidimensional Euclidean type spaces, we study convex choice: from any choice set, the set of types that make the same choice is convex. We establish that, in a suitable sense, this property characterizes the sufficiency of local incentive constraints. Convex choice is also of interest more broadly, e.g., in cheaptalk games. We tie convex choice to a notion of directional single-crossing differences (DSCD). For an expected-utility agent choosing among lotteries, DSCD implies that preferences are either one-dimensional or must take the affine form that has been tractable in multidimensional mechanism design. |
| Keywords: | single crossing; incentive compatibility; mechanism design; cheap talk |
| JEL: | D82 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_676 |
| By: | Paula Scholz (University of Cologne) |
| Abstract: | This study investigates how salary differences, gender stereotypes and prior leadership experience influence the willingness to pursue leadership roles. Using a controlled laboratory experiment, I focus on communication and coordination responsibilities of leaders. In the experiment, subjects are randomly assigned to leadership positions in a public goods game in which the leader communicates with and coordinates the team. Afterwards, I elicit the willingness to pay to become the leader varying whether the position comes with a low or high salary. I find that women have a substantially lower willingness to pay to attain the leadership position compared to men if and only if it comes with a high salary. Despite women being equally effective team leaders as men, belief elicitation shows that high salaries shift leadership roles from being perceived as stereotypical female to stereotypical male. This stereotypical perception of associating a highly paid leader with men translates into subjects' willingness to pay to attain the position. Exogenous exposure to leadership roles does not reduce the gender application gap, suggesting that experience alone cannot overcome instilled stereotypes. |
| Keywords: | Gender, Leadership, Stereotypes, Behavioral Decision Making |
| JEL: | C91 D83 J16 M21 M51 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:359 |
| By: | Kirill Borusyak; Peter Hull; Mauricio Caceres Bravo |
| Abstract: | We develop a new approach to estimating flexible demand models with exogenous supply-side shocks. Our approach avoids conventional assumptions of exogenous product characteristics, putting no restrictions on product entry, despite using instrumental variables that incorporate characteristic variation. The proposed instruments are model-predicted responses of endogenous variables to the exogenous shocks, recentered to avoid bias from endogenous characteristics. We illustrate the approach in a series of Monte Carlo simulations. |
| Date: | 2025–04–07 |
| URL: | https://d.repec.org/n?u=RePEc:azt:cemmap:10/25 |
| By: | Louise Devos (-) |
| Abstract: | Regional mobility is crucial for addressing labour shortages, as jobseekers from one region may fill vacancies in another region with few local candidates. However, this requires a willingness amongst employers to consider candidates from across regional borders. This study examines the influence of regional identity on hiring decisions in the Belgian labour market, focusing on perceptions of Flemish recruiters towards Flemish and Walloon candidates. Through a state-of-the-art vignette experiment, genuine Flemish recruiters evaluated fictitious resumes of school leavers that signalled regional identity through their name, place of birth, residential address, secondary school location, and/or language proficiency. Walloon candidates consistently score lower on key hiring metrics. Structural equation modelling reveals that Flemish employers hold negative perceptions of Walloon candidates, particularly regarding availability, interpersonal competency, attitude, and willingness of employers, employees, and clients to cooperate with them. These findings highlight the persistent role of regional identity stereotypes in reinforcing labour market inequalities and impeding mobility as a strategy to mitigate labour market tightness. |
| Keywords: | labour market, regional mobility, culture, perceptions, discrimination, Belgium |
| JEL: | J61 J68 J71 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:25/1114 |
| By: | Hwang, Minho; Chung, Dongil |
| Abstract: | Classical decision theory assumes a central valuation system in which the brain encodes subjective values-or utilities-for all available options in a given choice set, regardless of how different the options are (common currency). Garcia et al. (2023) pointed out that although there has been experimental evidence for differential properties between experience-based (experiential) and description-based (symbolic) choices, the alternative possibility suggesting the existence of separate valuation systems for each modality has not been directly assessed. The authors reported empirical results supporting the alternative hypothesis that participants recruit different valuation systems for each modality. Here, we reproduced the results of this original paper and performed robustness checks. Overall, we reproduced most of the statistical results and model-based results of the original study. We employed two additional methods to test the robustness of the computational modeling used in the original study: parameterrecovery using the scripts shared by the authors and parameter estimations using different model fitting methods (maximum log-likelihood estimation (MLE) and hierarchical Bayesian estimation). Our parameter-recovery method successfully recovered most of the original model parameters, estimated from choice between experiential and symbolic values (ES phase) and between two experiential values (EE phase). Through consecutive analyses, including alternative parameter estimation methods, we confirmed that the issue does not compromise the original study's conclusions, and that all results directly related to the main conclusion (i.e., indifference points) are reproducible." |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:i4rdps:215 |
| By: | Ali Mehrabani (Department of Economics, University of Kansas, Lawrence, KS 66045) |
| Abstract: | Two stein-like shrinkage estimators are introduced to modify the 2SLS and the LIML estimators for coefficients of a single equation in a simultaneous system of equations. The proposed estimators are weighted averages of the 2SLS/LIML estimators and the OLS estimator. The shrinkage weight depends on the Wu-Hausman misspecification test statistic which evaluates the null of exogeneity against the alternative hypothesis of endogeneity. The approximate finite sample bias, mean squared errors, and density functions of the Stein-like shrinkage estimators are obtained using small-disturbance approximations. The dominance conditions of the Stein-like shrinkage estimators over the 2SLS/LIML estimator under the mean squared error and the concentration probability are obtained. The proposed method is further illustrated by simulation studies which demonstrate the good finite sample performance of the method, and is also applied to an empirical application of returns to education. |
| Keywords: | Stein-like Estimator; Small-Disturbance Approximations; Simultaneous Equation Models; OLS; 2SLS; LIML. |
| JEL: | C13 C26 C52 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:kan:wpaper:202414 |
| By: | World Bank |
| Keywords: | Environment-Adaptation to Climate Change Infrastructure Economics and Finance-Infrastructure Finance Environment-Environmental Strategy Rural Development-Rural Roads & Transport Urban Development-Transport in Urban Areas |
| Date: | 2023–09 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:40323 |
| By: | Mathieu Guigourez (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne) |
| Abstract: | Individual actions – and individual responsibility – in regard to climate-related issues are often overlooked because they have a negligible impact at the global scale. Yet, despite having little to no impact, some people commit themselves to reducing their carbon footprint; that is, they are willingly choosing to adapt their consumption despite having no tangible impact on the issue they are tackling. Our aim is to question the permeability of economic rationality with moral (individual) responsibility at stake in climate-related issues. We provide an account of a possible bridge between deontological obligations and utility-maximisation in three different frameworks, namely Senian commitment, Kantian economics and choice under unresolved valuations conflicts. This analysis of different frameworks incorporating deontological motives in Rational Choice Theory analytically grounds individual commitments without relying on political enforcements or monetary incentives |
| Keywords: | Rational Choice Theory; Amartya Sen; Individual Responsibility; Kantian Economics; Normative Uncertainty; Commitment; Climate Ethics; Normative Decision Theory |
| JEL: | B41 D01 D72 D81 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:25002 |
| By: | Leonardo Bursztyn (University of Chicago & NBER); Rafael Jiménez-Durán (Bocconi University, IGIER & Chicago Booth Stigler Center); Aaron Leonard (University of Chicago); Filip Milojević (University of Chicago); Christopher Roth (University of Cologne, NHH, Max Planck Institute for Research on Collective Goods, IZA & CEPR) |
| Abstract: | Firms can increase the demand for their products and consolidate their market power not only by increasing user utility but also by decreasing non-user utility. In this paper, we examine this mechanism by considering the case of smartphones. In particular, Apple has faced criticism for allegedly degrading the Android user experience by making messages to Android devices appear as green bubbles on iPhones—a salient signal often perceived as reflecting a lower socioeconomic status. Using samples of US college students, we show that green bubbles are widely stigmatized and that a majority of both iPhone and Android users would prefer green bubbles to no longer exist. We then conduct an incentivized deactivation experiment, revealing that iPhone users have a significant willingness to pay to prevent their messages from appearing as green bubbles on other iPhones. Next, we examine the market implications of non-user utility and find that respondents are substantially more likely to choose an Android over an iPhone when green bubbles are removed. We conclude by presenting case studies that illustrate how companies use product features to reduce non-user utility in various markets. |
| Keywords: | Non-user utility, Stigma, Market Power, Consumer Welfare, Anti-trust. |
| JEL: | D83 D91 P16 J15 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:360 |