Periodic Reporting for period 2 - Finite Memory (Finite Memory and Dynamic Decision Problems)
Periodo di rendicontazione: 2024-06-01 al 2025-05-31
1. Problem/Issue: Random choice models are often underidentified, meaning that the observed choice behavior can render diverse representations within the model. This makes it challenging to interpret heterogeneity in the population. Prominent random choice models like the random utility model often suffer from underidentification the same observed choice data can be represented in many different ways within the model. This underidentification makes it difficult to uniquely identify and interpret the sources of heterogeneity driving the observed random choice behavior in the population.
2. Importance for society: Understanding heterogeneity in choice behavior is crucial for various economic applications, such as analyzing consumer preferences, risk attitudes, social preferences, and the effects of policies or information on decision-making. It allows for deriving more accurate positive and normative insights about how people's preferences, bounded rationality, cognitive biases etc. impact their choices.
This can inform better product design, marketing strategies, policy interventions aimed at nudging behavior, and more.
3. Overall Objectives:
- Propose "self-progressive" choice models that guarantee each aggregate choice behavior has a unique orderly representation.
- Establish a lattice-theoretic equivalence that provides a recipe to make any choice model self-progressive.
- Characterize the minimal self-progressive extension of rational choice - requires choices to satisfy intuitive axioms like respecting removal/addition of inferior/superior options.
- Derive conditions under which the primitive ordering over alternatives (reflecting preferences, cognition etc.) can be uniquely identified from choice data.
- Explore universally self-progressive models that yield unique representations for any primitive ordering, enabling richer behavioral specifications.
- Illustrate the framework using examples capturing phenomena like choice overload, similarity-based choice, multi-criteria decision making etc.
2. Importance for society: Understanding heterogeneity in choice behavior is crucial for various economic applications, such as analyzing consumer preferences, risk attitudes, social preferences, and the effects of policies or information on decision-making. It allows for deriving more accurate positive and normative insights about how people's preferences, bounded rationality, cognitive biases etc. impact their choices.
This can inform better product design, marketing strategies, policy interventions aimed at nudging behavior, and more.
3. Overall Objectives:
- Propose "self-progressive" choice models that guarantee each aggregate choice behavior has a unique orderly representation.
- Establish a lattice-theoretic equivalence that provides a recipe to make any choice model self-progressive.
- Characterize the minimal self-progressive extension of rational choice - requires choices to satisfy intuitive axioms like respecting removal/addition of inferior/superior options.
- Derive conditions under which the primitive ordering over alternatives (reflecting preferences, cognition etc.) can be uniquely identified from choice data.
- Explore universally self-progressive models that yield unique representations for any primitive ordering, enabling richer behavioral specifications.
- Illustrate the framework using examples capturing phenomena like choice overload, similarity-based choice, multi-criteria decision making etc.
As a result of WP1 and WP 2.1 I have produced a high quality research paper intended for publication as Deliverable 1.2 (Milestone 1).
The first draft was posted to the open-access repository arXiv, which is approved in the OpenDOAR directory, at the end of the sixth month of the project. Over the following 12 months, several important additional results were incorporated. This paper can be reached through the link https://arxiv.org/abs/2212.13449(si apre in una nuova finestra).
Overview of Results
-Theoretical Advances: The paper has established an equivalence between self-progressive choice models and lattice structures.
This theoretical foundation is significant as it allows for the precise extension or restriction of any choice model to ensure a unique orderly representation.
-Characterization of Minimal Self-Progressive Extension: The research characterized the minimal self-progressive extension of rational choice functions through specific axioms. This contributes to understanding choice overload phenomena, where agents' choice behavior deviates due to complex environments.
-Random Choice Models: A significant result is the development of criteria to identify if a random choice function can be represented as a probability distribution over choice functions in the model. This involves probabilistic counterparts of key axioms and uses integer-programming techniques.
-Identification of Primitive Ordering: Necessary and sufficient conditions were provided for the existence and uniqueness of a primitive ordering that aligns with the observed choice behaviors. This finding is crucial for accurately modeling and predicting agent choices based on limited information.
The results offer foundations for selecting self-progressive choice models, establish connections to algebraic lattices, characterize the rational choice extension capturing choice overload, enable identification of the underlying primitives from choice data, and describe the class of universally self-progressive models.
Exploitation and Dissemination
Exploitation:
- Economic Applications: The results can be applied to improve economic models that predict consumer behavior, particularly in scenarios involving choice overload. This can lead to better product placements and marketing strategies.
- Policy Making: Policymakers can use these insights to design interventions that simplify decision-making processes, thereby improving public welfare and satisfaction.
Dissemination:
- Academic Circles: The findings have been shared through seminars at institutions such as the University of Maryland, Georgetown University, Duke University, and Princeton University. This ensures that the academic community is aware of the advancements and can build upon them.
- Workshops and Conferences: The research has also been discussed in various workshops, and parts of it are supported by grants, indicating a structured approach to disseminating the knowledge through well-recognized academic outlets.
In the first periodic report, I noted that, as a result of work packages WP1 and WP2.1 I had produced a high-quality research paper intended for publication as Deliverable 1.2 (Milestone 1). I am pleased to provide an important update regarding this output. The resulting solo-authored paper, titled Self-progressive Choice Models, has received a revise and resubmit decision from the Journal of the European Economic Association (JEEA). JEEA is widely recognized as one of the top six general-interest journals in economics, alongside Econometrica, AER, and other leading outlets. The referee reports are uniformly positive and supportive, and I am optimistic about the prospects for publication in this prestigious journal.
The first draft was posted to the open-access repository arXiv, which is approved in the OpenDOAR directory. This paper can be reached through the link https://arxiv.org/abs/2212.13449(si apre in una nuova finestra).
Relatedly, toward the end of the first reporting period, I initiated a collaboration with Prof. Yusufcan Masatlıoğlu (University of Maryland) and Prof. Chris Chambers (Georgetown University). As part of WP2, we began working on a substantial generalization of the initial findings, which has since evolved into the core content of WP3. The outcomes of this collaboration are presented in this final report, complementing the results previously reported. This is the Milestone 3, represented by Deliverable 3.
The first draft was posted to the open-access repository arXiv, which is approved in the OpenDOAR directory. This paper is currently under revision at the Review of Economic Studies, one of the top five general-interest journals in economics. This paper can be reached through the link https://arxiv.org/abs/2504.01227(si apre in una nuova finestra).
The first draft was posted to the open-access repository arXiv, which is approved in the OpenDOAR directory, at the end of the sixth month of the project. Over the following 12 months, several important additional results were incorporated. This paper can be reached through the link https://arxiv.org/abs/2212.13449(si apre in una nuova finestra).
Overview of Results
-Theoretical Advances: The paper has established an equivalence between self-progressive choice models and lattice structures.
This theoretical foundation is significant as it allows for the precise extension or restriction of any choice model to ensure a unique orderly representation.
-Characterization of Minimal Self-Progressive Extension: The research characterized the minimal self-progressive extension of rational choice functions through specific axioms. This contributes to understanding choice overload phenomena, where agents' choice behavior deviates due to complex environments.
-Random Choice Models: A significant result is the development of criteria to identify if a random choice function can be represented as a probability distribution over choice functions in the model. This involves probabilistic counterparts of key axioms and uses integer-programming techniques.
-Identification of Primitive Ordering: Necessary and sufficient conditions were provided for the existence and uniqueness of a primitive ordering that aligns with the observed choice behaviors. This finding is crucial for accurately modeling and predicting agent choices based on limited information.
The results offer foundations for selecting self-progressive choice models, establish connections to algebraic lattices, characterize the rational choice extension capturing choice overload, enable identification of the underlying primitives from choice data, and describe the class of universally self-progressive models.
Exploitation and Dissemination
Exploitation:
- Economic Applications: The results can be applied to improve economic models that predict consumer behavior, particularly in scenarios involving choice overload. This can lead to better product placements and marketing strategies.
- Policy Making: Policymakers can use these insights to design interventions that simplify decision-making processes, thereby improving public welfare and satisfaction.
Dissemination:
- Academic Circles: The findings have been shared through seminars at institutions such as the University of Maryland, Georgetown University, Duke University, and Princeton University. This ensures that the academic community is aware of the advancements and can build upon them.
- Workshops and Conferences: The research has also been discussed in various workshops, and parts of it are supported by grants, indicating a structured approach to disseminating the knowledge through well-recognized academic outlets.
In the first periodic report, I noted that, as a result of work packages WP1 and WP2.1 I had produced a high-quality research paper intended for publication as Deliverable 1.2 (Milestone 1). I am pleased to provide an important update regarding this output. The resulting solo-authored paper, titled Self-progressive Choice Models, has received a revise and resubmit decision from the Journal of the European Economic Association (JEEA). JEEA is widely recognized as one of the top six general-interest journals in economics, alongside Econometrica, AER, and other leading outlets. The referee reports are uniformly positive and supportive, and I am optimistic about the prospects for publication in this prestigious journal.
The first draft was posted to the open-access repository arXiv, which is approved in the OpenDOAR directory. This paper can be reached through the link https://arxiv.org/abs/2212.13449(si apre in una nuova finestra).
Relatedly, toward the end of the first reporting period, I initiated a collaboration with Prof. Yusufcan Masatlıoğlu (University of Maryland) and Prof. Chris Chambers (Georgetown University). As part of WP2, we began working on a substantial generalization of the initial findings, which has since evolved into the core content of WP3. The outcomes of this collaboration are presented in this final report, complementing the results previously reported. This is the Milestone 3, represented by Deliverable 3.
The first draft was posted to the open-access repository arXiv, which is approved in the OpenDOAR directory. This paper is currently under revision at the Review of Economic Studies, one of the top five general-interest journals in economics. This paper can be reached through the link https://arxiv.org/abs/2504.01227(si apre in una nuova finestra).
Expected Results Until the End of the Project
By the end of the project, the researchers aim to develop and validate the framework of self-progressive choice models fully. This includes:
1. Extending the current theoretical results to more complex and varied choice environments.
2. Developing practical tools for analysts to apply self-progressive choice models to real-world data.
By the end of the project, the researchers aim to develop and validate the framework of self-progressive choice models fully. This includes:
1. Extending the current theoretical results to more complex and varied choice environments.
2. Developing practical tools for analysts to apply self-progressive choice models to real-world data.