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https://feeds.library.caltech.edu/people/Echenique-F/combined.rss
A Caltech Library Repository Feedhttp://www.rssboard.org/rss-specificationpython-feedgenenSat, 13 Apr 2024 01:10:11 +0000Are stabilization programs expansionary?
https://resolver.caltech.edu/CaltechAUTHORS:20101008-085514476
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Forteza-A', 'name': {'family': 'Forteza', 'given': 'Alvaro'}}]}
Year: 2000
The empirical evidence presented in this paper casts doubts on the by now widely accepted "fact"that exchange rate based stabilization programs are expansionary. Even though these programs were associated with output booms, no evidence was found to support the thesis that the booms were caused by the stabilization programs. Rather, positive external shocks seem to have caused both the output booms and the stabilization programs.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/2w4ad-f0c31Monotone Preferences over Information
https://resolver.caltech.edu/CaltechAUTHORS:20101004-101111961
Authors: {'items': [{'id': 'Dubra-J', 'name': {'family': 'Dubra', 'given': 'Juan'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2001
We consider preference relations over information that are monotone: more information is preferred to less. We prove that, if a preference relation on information about an uncountable set of states of nature is monotone, then it is not representable by a utility function.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/n4vvd-a4n64Comparative Statics by Adaptive Dynamics and the Correspondence Principle
https://resolver.caltech.edu/CaltechAUTHORS:20101004-095913907
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2002
N/Ahttps://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/y2a37-n6m49Finding All Equilibria
https://resolver.caltech.edu/CaltechAUTHORS:20170726-162258184
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2002
DOI: 10.7907/acfse-rbn61
I present a simple and fast algorithm that finds all the pure-strategy Nash equilibria in games with strategic complementarities. This is the first non-trivial algorithm for finding all pure-strategy Nash equilibria.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/acfse-rbn61Strong comparative statics of equilibria
https://resolver.caltech.edu/CaltechAUTHORS:20100929-152217484
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Sabarwal-T', 'name': {'family': 'Sabarwal', 'given': 'Tarun'}}]}
Year: 2003
DOI: 10.1016/S0899-8256(02)00548-1
Some results in the monotone comparative statics literature tell us that if a parameter increases, some old equilibria are smaller than some new equilibria. We give a sufficient condition such that at a new parameter value every old equilibrium is smaller than every new equilibrium. We also adapt a standard algorithm to compute a minimal such newer parameter value and apply this algorithm to a game of network externalities. Our results are independent of a theory of equilibrium selection and are valid for games of strategic complementarities.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/ntvfh-r2961Mixed equilibria in games of strategic complementarities
https://resolver.caltech.edu/CaltechAUTHORS:20100929-165802397
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2003
DOI: 10.1007/s00199-002-0277-8
The literature on games of strategic complementarities (GSC) has focused on pure strategies. I introduce mixed strategies and show that, when strategy spaces are one-dimensional, the complementarities framework extends to mixed strategies ordered by first-order stochastic dominance. In particular, the mixed extension of a GSC is a GSC, the full set of equilibria is a complete lattice and the extremal equilibria (smallest and largest) are in pure strategies. The framework does not extend when strategy spaces are multi-dimensional. I also update learning results for GSC using stochastic fictitious play.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/j9588-p1k88The equilibrium set of two-player games with complementarities is a sublattice
https://resolver.caltech.edu/CaltechAUTHORS:20100929-170823228
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2003
DOI: 10.1007/s00199-002-0337-0
I prove that the equilibrium set in a two-player game with complementarities, and totally ordered strategy spaces, is a sublattice of the joint strategy space.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/tb1s8-9c737Extensive-form games and strategic complementarities
https://resolver.caltech.edu/CaltechAUTHORS:20100929-155427372
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2004
DOI: 10.1016/S0899-8256(03)00122-2
I prove the subgame-perfect equivalent of the basic result for Nash equilibria in normal-form games of strategic complements: the set of subgame-perfect equilibria is a nonempty, complete lattice—in particular, subgame-perfect Nash equilibria exist. For this purpose I introduce a device that allows the study of the set of subgame-perfect equilibria as the set of fixed points of a correspondence. My results are limited because extensive-form games of strategic complementarities turn out—surprisingly—to be a very restrictive class of games.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/c78em-cv894A weak correspondence principle for models with complementarities
https://resolver.caltech.edu/CaltechAUTHORS:20101004-102525825
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2004
DOI: 10.1016/S0304-4068(03)00090-9
I prove that, in models with complementarities, some non-monotone comparative statics must select unstable equilibria; and, under additional regularity conditions, that monotone comparative statics selects stable equilibria.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/fpkcv-wze74A characterization of strategic complementarities
https://resolver.caltech.edu/CaltechAUTHORS:20100929-154731523
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2004
DOI: 10.1016/S0899-8256(03)00118-0
I characterize games for which there is an order on strategies such that the game has strategic complementarities. I prove that, with some qualifications, games with a unique equilibrium have complementarities if and only if Cournot best-response dynamics has no cycles; and that all games with multiple equilibria have complementarities. As applications of my results, I show that: (1) generic 2×2 games either have no pure-strategy equilibria, or have complementarities; (2) generic two-player finite ordinal potential games have complementarities.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/6n639-rzm06Information is not about measurability
https://resolver.caltech.edu/CaltechAUTHORS:20101004-103515138
Authors: {'items': [{'id': 'Dubra-J', 'name': {'family': 'Dubra', 'given': 'Juan'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2004
DOI: 10.1016/S0165-4896(03)00083-0
We present a simple example where the use of σ-algebras as a model of information leads to a paradoxical conclusion: a decisionmaker prefers less information to more. We then explain that the problem arises because the use of σ-algebras as the informational content of a signal is inadequate. We provide a characterization of the different models of information in the literature in terms of Blackwell's theorem.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/tdezk-6mp76Core many-to-one matchings by fixed-point methods
https://resolver.caltech.edu/CaltechAUTHORS:20100929-153536535
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Oviedo-J', 'name': {'family': 'Oviedo', 'given': 'Jorge'}}]}
Year: 2004
DOI: 10.1016/S0022-0531(03)00184-4
We characterize the core many-to-one matchings as fixed points of a map. Our characterization gives an algorithm for finding core allocations; the algorithm is efficient and simple to implement. Our characterization does not require substitutable preferences, so it is separate from the structure needed for the non-emptiness of the core. When preferences are substitutable, our characterization gives a simple proof of the lattice structure of core matchings, and it gives a method for computing the join and meet of two core matchings.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/va4sg-ch353Mixed equilibria are unstable in games of strategic complements
https://resolver.caltech.edu/CaltechAUTHORS:20101004-104904914
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Edlin-A', 'name': {'family': 'Edlin', 'given': 'Aaron'}}]}
Year: 2004
DOI: 10.1016/j.jet.2003.10.004
In games with strict strategic complementarities, properly mixed Nash equilibria—equilibria that are not in pure strategies—are unstable for a broad class of learning dynamics.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/hgfjq-yms18A short and constructive proof of Tarski's fixed-point theorem
https://resolver.caltech.edu/CaltechAUTHORS:20101004-105805417
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2005
DOI: 10.1007/s001820400192
I give short and constructive proofs of Tarski's fixed-point theorem, and of Zhou's extension of Tarski's fixed-point theorem to set-valued maps.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/7accd-ggg86Is school segregation good or bad?
https://resolver.caltech.edu/CaltechAUTHORS:ECHaer06
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Fryer-R-G-Jr', 'name': {'family': 'Fryer', 'given': 'Roland G., Jr.'}}, {'id': 'Kaufman -A', 'name': {'family': 'Kaufman', 'given': 'Alex'}}]}
Year: 2006
DOI: 10.1257/000282806777212198
It has been well documented that segregation across schools — denying access to resources, inferior educational production functions, and so on — exacerbates racial differences in achievement. Using an individual measure of social connections within schools, we have shown that this form of segregation — Asian kids sitting together in the cafeteria — has a substantively unimportant relationship with academic achievement or social behavior in school or later in life. There are important caveats to our analysis: (a) our estimates of the relationship between within - school segregation and outcomes are not causal; and (b) friendships may not be the only relevant cross-race social interaction that occurs within a school.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/xkq89-f0q65A theory of stability in many-to-many matching markets
https://resolver.caltech.edu/CaltechAUTHORS:ECHte06
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Oviedo-J', 'name': {'family': 'Oviedo', 'given': 'Jorge'}}]}
Year: 2006
We develop a theory of stability in many-to-many matching markets. We give conditions under which the setwise-stable set, a core-like concept, is nonempty and can be approached through an algorithm. The usual core may be empty. The setwise-stable set coincides with the pairwise-stable set and with the predictions of a non-cooperative bargaining model. The setwise-stable set possesses the conflict/coincidence of interest properties from many-to-one, and one-to-one models. The theory parallels the standard theory of stability for many-to-one, and one-to-one, models. We provide results for a number of core-like solutions, besides the setwise-stable set.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/nb5pg-z6t53Counting combinatorial choice rules
https://resolver.caltech.edu/CaltechAUTHORS:20100929-155813419
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2007
DOI: 10.1016/j.geb.2006.03.009
I count the number of combinatorial choice rules that satisfy certain properties: Kelso–Crawford substitutability, and independence of irrelevant alternatives. The results are important for two-sided matching theory, where agents are modeled by combinatorial choice rules with these properties. The rules are a small, and asymptotically vanishing, fraction of all choice rules. But they are still exponentially more than the preference relations over individual agents—which has positive implications for the Gale–Shapley algorithm of matching theory.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/024rz-g9z42A solution to matching with preferences over colleagues
https://resolver.caltech.edu/CaltechAUTHORS:20100929-160859854
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Yenmez-M-B', 'name': {'family': 'Yenmez', 'given': 'M. Bumin'}}]}
Year: 2007
DOI: 10.1016/j.geb.2006.07.003
We study many-to-one matchings, such as the assignment of students to colleges, where the students have preferences over the other students who would attend the same college. It is well known that the core of this model may be empty, without strong assumptions on agents' preferences. We introduce a method that finds all core matchings, if any exist. The method requires no assumptions on preferences. Our method also finds certain partial solutions that may be useful when the core is empty.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/8rd0b-6gq58A Measure of Segregation Based on Social Interactions
https://resolver.caltech.edu/CaltechAUTHORS:ECHqje07
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Fryer-R-G-Jr', 'name': {'family': 'Fryer', 'given': 'Roland G., Jr.'}}]}
Year: 2007
DOI: 10.1162/qjec.122.2.441
We develop an index of segregation based on two premises: (1) a measure of segregation should disaggregate to the level of individuals, and (2) an individual is more segregated the more segregated are the agents with whom she interacts. We present an index that satisfies (1) and (2) and that is based on agents' social interactions: the extent to which blacks interact with blacks, whites with whites, etc. We use the index to measure school and residential segregation. Using detailed data on friendship networks, we calculate levels of within-school racial segregation in a sample of U. S. schools. We also calculate residential segregation across major U. S. cities, using block-level data from the 2000 U. S. Census.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/53290-zwp91Finding all equilibria in games of strategic complements
https://resolver.caltech.edu/CaltechAUTHORS:20100929-152334467
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2007
DOI: 10.1016/j.jet.2006.06.001
I present a simple and fast algorithm that finds all the pure-strategy Nash equilibria in games with strategic complementarities. This is the first non-trivial algorithm for finding all pure-strategy Nash equilibria.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/fcpd6-8hm34A Test for Monotone Comparative Statics
https://resolver.caltech.edu/CaltechAUTHORS:20101008-110658112
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Komunjer-I', 'name': {'family': 'Komunjer', 'given': 'Ivana'}}]}
Year: 2007
DOI: 10.7907/q3yjn-rzc82
In this paper we design an econometric test for monotone comparative statics (MCS) often found in models with multiple equilibria. Our test exploits the observable implications of the MCS prediction: that the extreme (high and low) conditional quantiles of the dependent variable increase monotonically with the explanatory variable. The main contribution of the paper is to derive a likelihood-ratio test, which to the best of our knowledge, is the first econometric test of MCS proposed in the literature. The test is an asymptotic "chi-bar squared" test for order restrictions on intermediate conditional quantiles. The key features of our approach are: (1) it does not require estimating the underlying nonparametric model relating the dependent and explanatory variables to the latent disturbances; (2) it makes few assumptions on the cardinality, location or probabilities over equilibria. In particular, one can implement our test without assuming an equilibrium selection rule.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/q3yjn-rzc82Cohesion, Insurance and Redistribution
https://resolver.caltech.edu/CaltechAUTHORS:ECHqjps07
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Eguia-Jon-X', 'name': {'family': 'Eguia', 'given': 'Jon X.'}}]}
Year: 2007
DOI: 10.1561/100.00006056
Governments use redistributive policies to favor relatively unproductive economic sectors. Traditional economic wisdom teaches that the government should instead buy out the agents in these sectors, and let them relocate to more productive sectors. We show that redistribution to a sector whose agents have highly correlated incomes generates an insurance value. Taking this insurance value into account, a buy-out is not sufficient to compensate the agents in the sector for relocating. In fact, it may be efficient for the government to sustain agents in an activity that, while less productive, is subject to correlated income shocks. US data suggests that indeed, sectors that receive transfers are subject to more correlated income shocks than others.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/80rs2-kcs30You won't harm me if you fool me
https://resolver.caltech.edu/CaltechAUTHORS:20101008-110010257
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2007
DOI: 10.7907/fjybj-cn073
A decision maker faces a new theory of how certain events unfold over time. The theory matters for choices she needs to make, but possibly the theory is a fabrication. We show that there is a test which is guaranteed to pass a true theory, and which is also conservative: A false theory will only pass when adopting it over the decision maker's initial theory would not cause substantial harm; if the agent is fooled she will not be harmed.
We also study a society of conservative decision makers with different initial theories. We uncover pathological instances of our test: a society collectively rejects most theories, be they true or false. But we also find well-behaved instances of our test, collectively accepting true theories and rejecting false. Our tests builds on tests studied in the literature in the context of non-strategic inspectors.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/fjybj-cn073Correspondence Principle
https://resolver.caltech.edu/CaltechAUTHORS:20101004-111522975
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2008
N/Ahttps://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/3537r-8y303English auctions and the Stolper–Samuelson theorem
https://resolver.caltech.edu/CaltechAUTHORS:DUBjet08
Authors: {'items': [{'id': 'Dubra-J', 'name': {'family': 'Dubra', 'given': 'Juan'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Manelli-A-M', 'name': {'family': 'Manelli', 'given': 'Alejandro M.'}}]}
Year: 2008
DOI: 10.1016/j.jet.2008.07.001
We prove that the English auction (with bidders that need not be ex ante identical and may have interdependent valuations) has an efficient ex post equilibrium. We establish this result for environments where it has not been previously obtained. We also prove two versions of the Stolper–Samuelson theorem, one for economies with n goods and n factors, and one for non-square economies. Similar assumptions and methods underlie these seemingly unrelated results.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/6knzw-nnf46What matchings can be stable? The testable implications of matching theory
https://resolver.caltech.edu/CaltechAUTHORS:ECHmor08
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2008
DOI: 10.1287/moor.1080.0318
This paper studies the falsifiability of two-sided matching theory when agents' preferences are unknown. A collection of matchings is rationalizable if there are preferences for the agents involved so that the matchings are stable. We show that there are nonrationalizable collections of matchings; hence, the theory is falsifiable. We also characterize the rationalizable collections of matchings, which leads to a test of matching theory in the spirit of revealed-preference tests of individual optimizing behavior.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/b0xrw-kft29Ordinal notions of submodularity
https://resolver.caltech.edu/CaltechAUTHORS:CHAjme08
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2008
DOI: 10.1016/j.jmateco.2008.03.001
We consider several ordinal formulations of submodularity, defined for arbitrary binary relations on lattices. Two of these formulations are essentially due to Kreps [Kreps, D.M., 1979. A representation theorem for "Preference for Flexibility". Econometrica 47 (3), 565–578] and one is a weakening of a notion due to Milgrom and Shannon [Milgrom, P., Shannon, C., 1994. Monotone comparative statics. Econometrica 62 (1), 157–180]. We show that any reflexive binary relation satisfying either of Kreps's definitions also satisfies Milgrom and Shannon's definition, and that any transitive and monotonic binary relation satisfying the Milgrom and Shannon's condition satisfies both of Kreps's conditions.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/1q2xb-3cp17Ordinal notions of submodularity
https://resolver.caltech.edu/CaltechAUTHORS:CHAjme08
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2008
DOI: 10.1016/j.jmateco.2008.03.001
We consider several ordinal formulations of submodularity, defined for arbitrary binary relations on lattices. Two of these formulations are essentially due to Kreps [Kreps, D.M., 1979. A representation theorem for "Preference for Flexibility". Econometrica 47 (3), 565–578] and one is a weakening of a notion due to Milgrom and Shannon [Milgrom, P., Shannon, C., 1994. Monotone comparative statics. Econometrica 62 (1), 157–180]. We show that any reflexive binary relation satisfying either of Kreps's definitions also satisfies Milgrom and Shannon's definition, and that any transitive and monotonic binary relation satisfying the Milgrom and Shannon's condition satisfies both of Kreps's conditions.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/tj6fj-ftp61When does aggregation reduce uncertainty aversion?
https://resolver.caltech.edu/CaltechAUTHORS:20101008-104052139
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2009
DOI: 10.7907/ssk1n-sn790
We study the problem of uncertainty sharing within a household: "risk sharing," in a context of Knightian uncertainty. A household shares uncertain prospects using a social welfare function. We characterize the social welfare functions such that the household is collectively less averse to uncertainty than each member, and satises the Pareto principle and an independence axiom. We single out the sum of certainty equivalents as the unique member of this family which provides quasiconcave rankings over risk-free allocations.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/ssk1n-sn790Supermodularity and preferences
https://resolver.caltech.edu/CaltechAUTHORS:20100929-143716093
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2009
DOI: 10.1016/j.jet.2008.06.004
We uncover the complete ordinal implications of supermodularity on finite lattices under the assumption of weak monotonicity. In this environment, we show that supermodularity is ordinally equivalent to the notion of quasisupermodularity introduced by Milgrom and Shannon. We conclude that supermodularity is a weak property, in the sense that many preferences have a supermodular representation.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/31ky8-nms42Sequential entry in many-to-one matching markets
https://resolver.caltech.edu/CaltechAUTHORS:BOYscw08
Authors: {'items': [{'id': 'Boyle-E-C', 'name': {'family': 'Boyle', 'given': 'Elette'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2009
DOI: 10.1007/s00355-008-0347-3
We study sequential bargaining in many-to-one matching markets. We show that there is an advantage to entering late in the market, and that the last agent to enter the market will receive his or her best partner in a stable matching, extending the results of Blum and Rothblum (J Econ Theory 103(2):429–443, 2002) and Cechlárová (Randomized matching mechanism revisited. Mimeo, Safarik University, 2002) for the marriage model.We also discuss the relation between sequential bargaining and a possible alternative formulation based on the NTU Shapley value.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/qmvye-4yh41Testing Models With Multiple Equilibria by Quantile Methods
https://resolver.caltech.edu/CaltechAUTHORS:20090819-112123347
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Komunjer-I', 'name': {'family': 'Komunjer', 'given': 'Ivana'}}]}
Year: 2009
DOI: 10.3982/ECTA6223
This paper proposes a method for testing complementarities between explanatory and dependent variables in a large class of economic models. The proposed test is based on the monotone comparative statics (MCS) property of equilibria. Our main result is that MCS produces testable implications on the (small and large) quantiles of the dependent variable, despite the presence of multiple equilibria. The key features of our approach are that (i) we work with a nonparametric structural model of a continuous dependent variable in which the unobservable is allowed to be correlated with the explanatory variable in a reasonably general way; (ii) we do not require the structural function to be known or estimable; (iii) we remain fairly agnostic on how an equilibrium is selected. We illustrate the usefulness of our result for policy evaluation within Berry, Levinsohn, and Pakes's (1999) model.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/wm5va-akk87Implications of Pareto Efficiency for Two-Agent (Household) Choice
https://resolver.caltech.edu/CaltechAUTHORS:20101008-103311343
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Ivanov-L', 'name': {'family': 'Ivanov', 'given': 'Lozan'}}]}
Year: 2009
DOI: 10.7907/szdsc-6bp13
We study when two-member household choice behavior is compatible with Pareto optimality. We ask when an external observer of household choices, who does not know the individuals' preferences, can rationalize the choices as being Pareto-optimal. Our main contribution is to reduce the problem of rationalization to a graph-coloring problem. As a result, we obtain simple tests for Pareto optimal choice behavior. In addition to the tests, and using our graph-theoretic representation, we show that Pareto rationalization is equivalent to a system of quadratic equations being solvable.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/szdsc-6bp13Profit maximization and supermodular technology
https://resolver.caltech.edu/CaltechAUTHORS:20091006-144532274
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2009
DOI: 10.1007/s00199-008-0340-1
A dataset is a list of observed factor inputs and prices for a technology; profits and production levels are unobserved. We obtain necessary and sufficient conditions for a dataset to be consistent with profit maximization under a monotone and concave revenue based on the notion of cyclic monotonicity. Our result implies that monotonicity and concavity cannot be tested, and that one cannot decide if a firm is competitive based on factor demands. We also introduce a condition, cyclic supermodularity, which is both necessary and sufficient for data to be consistent with a supermodular technology. Cyclic supermodularity provides a test for complementarity of production factors.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/qxxca-8db78Testable Implications of Gross Substitutes in Demand
https://resolver.caltech.edu/CaltechAUTHORS:20170726-171803006
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2009
DOI: 10.7907/c4yzh-awq44
We present a non-parametric "revealed-preference test" for gross substitutes in demand.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/c4yzh-awq44Clearinghouses for Two-Sided Matching: An Experimental Study
https://resolver.caltech.edu/CaltechAUTHORS:20101008-102338754
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wilson-A-J', 'name': {'family': 'Wilson', 'given': 'Alistair J.'}}, {'id': 'Yariv-L', 'name': {'family': 'Yariv', 'given': 'Leeat'}}]}
Year: 2009
DOI: 10.7907/jereh-qfx04
We study the performance of two-sided matching clearinghouses in the laboratory. Our experimental design mimics the Gale-Shapley (1962) mechanism, utilized to match hospitals and interns, schools and pupils, etc., with an array of preference profiles. Several insights come out of our analysis. First, only 48% of the observed match outcomes are fully stable. Furthermore, among those markets ending at a stable outcome, a large majority culminates in the best stable matching for the receiving-side. Second, contrary to the theory, participants on the receiving-side of the algorithm rarely truncate their true preferences. In fact, it is the proposers who do not make offers in order of their preference, frequently skipping potential partners. Third, market characteristics affect behavior and outcomes: both the cardinal representation and the span of the core influence whether outcomes are stable or close to stable, as well as the number of turns it takes markets to converge to the final outcome.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/jereh-qfx04The Axiomatic Structure of Empirical Content
https://resolver.caltech.edu/CaltechAUTHORS:20101008-094039001
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2010
DOI: 10.7907/7yp6a-gf196
In this paper, we provide a formal framework for studying the empirical content of a given theory. We define the falsifiable closure of a theory to be the least weakening of the theory that makes only falsifiable claims. The falsifiable closure is our notion of empirical content. We prove that the empirical content of a theory can be exactly captured by a certain kind of axiomatization, one that uses axioms which are universal negations of conjunctions of atomic formulas. The falsifiable closure operator has the structure of a topological closure, which has implications, for example, for the behavior of joint vis a vis single hypotheses.
The ideas here are useful for understanding theories whose empirical content is well-understood (for example, we apply our framework to revealed preference theory, and Afriat's theorem), but they can also be applied to theories with no known axiomatization. We present an application to the theory of multiple selves, with a fixed finite set of selves and where selves are aggregated according to a neutral rule satisfying independence of irrelevant alternatives. We show that multiple selves theories are fully falsifiable, in the sense that they are equivalent to their empirical content.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/7yp6a-gf196Contracts vs. Salaries in Matching
https://resolver.caltech.edu/CaltechAUTHORS:20101008-093110872
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2010
DOI: 10.7907/8swa2-84668
Firms and workers may sign complex contracts that govern many aspects of their interactions. I show that when firms regard contracts as substitutes, bargaining over contracts can be understood as bargaining only over wages. Substitutes is the assumption commonly used to guarantee the existence of stable matchings of workers and firms.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/8swa2-84668Aggregate matchings
https://resolver.caltech.edu/CaltechAUTHORS:20161018-153505782
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'SangMok'}}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2010
DOI: 10.1145/1807406.1807477
This paper characterizes the testable implications of stability for aggregate matchings. We consider data on matchings where individuals are aggregated, based on their observable characteristics, into types, and we know how many agents of each type match. We derive stability conditions for an aggregate matching, and, based on these, provide a simple necessary and sufficient condition for an observed aggregate matching to be rationalizable (i.e. such that preferences can be found so that the observed aggregate matching is stable). Subsequently, we derive moment inequalities based on the stability conditions, and provide an empirical illustration using the cross-sectional marriage distributions across the US states.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/v8av9-td811Revealed Preference Tests using Supermarket Data: the Money Pump
https://resolver.caltech.edu/CaltechAUTHORS:20100927-114449846
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'SangMok'}}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2010
DOI: 10.7907/rq8c5-k8y17
We use a money pump argument to measure deviations from the revealed preference axioms. Using a panel data set of food expenditures, we find a large number of violations of the weak axiom of revealed preference. The money pump costs are small, which indicate that the violations of revealed preference are not severe. While most households' behavior deviates from rationality, by our measure they are close to being rational.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/rq8c5-k8y17General Revealed Preference Theory
https://resolver.caltech.edu/CaltechAUTHORS:20100924-161538346
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2010
DOI: 10.7907/65jz8-7zk78
We provide general conditions under which an economic theory has a universal axiomatization: one that leads to testable implications. Roughly speaking, if we obtain a universal axiomatization when we assume that unobservable parameters (such as preferences)are observable, then we can obtain a universal axiomatization purely on observables. The result "explains" classical revealed preference theory, as applied to individual rational choice. We obtain new applications to Nash equilibrium theory and Pareto optimal choice.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/65jz8-7zk78A Revealed Preference Approach to Computational Complexity in Economics
https://resolver.caltech.edu/CaltechAUTHORS:20100928-150942227
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Golovin-D', 'name': {'family': 'Golovin', 'given': 'Daniel'}}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2010
DOI: 10.7907/cm0gg-20z31
One of the main building blocks of economics is the theory of the consumer, which postulates that consumers are utility maximizing. However, from a computational perspective, this model is called into question because the task of utility maximization subject to a budget constraint is computationally hard in the worst-case under reasonable assumptions. In this paper, we study the empirical consequences of strengthening consumer choice theory to enforce that utilities are computationally easy to maximize. We prove the possibly surprising result that computational constraints have no empirical consequences whatsoever for consumer choice theory. That is, a data set is consistent with a utility maximizing consumer if and only if a data set is consistent
with a utility maximizing consumer having a utility function that can be maximized in strongly
polynomial time.
Our result motivates a general approach for posing questions about the empirical content of computational constraints: the revealed preference approach to computational complexity. The approach complements the conventional worst-case view of computational complexity in important ways, and is methodologically close to mainstream economics.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/cm0gg-20z31Aggregate Matchings
https://resolver.caltech.edu/CaltechAUTHORS:20101008-101034676
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'Sangmok'}}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2010
DOI: 10.7907/rrg6w-3dj69
This paper characterizes the testable implications of stability for aggregate matchings. We consider data on matchings where individuals are aggregated, based on their observable characteristics, into types, and we know how many agents of each type match. We derive stability conditions for an aggregate matching, and, based on these, provide a simple necessary and sufficient condition for an observed aggregate matching to be rationalizable (i.e. such that preferences can be found so that the observed aggregate matching is stable). Subsequently, we derive moment inequalities based on the stability conditions, and provide an empirical illustration using the cross-sectional marriage distributions across the US states.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/rrg6w-3dj69Aggregate Matchings
https://resolver.caltech.edu/CaltechAUTHORS:20101008-101034676
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'Sangmok'}}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2010
This paper characterizes the testable implications of stability for aggregate matchings. We consider data on matchings where individuals are aggregated, based on their observable characteristics, into types, and we know how many agents of each type match. We derive stability conditions for an aggregate matching, and, based on these, provide a simple necessary and sufficient condition for an observed aggregate matching to be rationalizable (i.e. such that preferences can be found so that the observed aggregate matching is stable). Subsequently, we derive moment inequalities based on the stability conditions, and provide an empirical illustration using the cross-sectional marriage distributions across the US states.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/tbdyq-ypm17On behavioral complementarity and its implications
https://resolver.caltech.edu/CaltechAUTHORS:20101004-113353153
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2010
DOI: 10.1016/j.jet.2010.08.004
We study the behavioral definition of complementary goods: if the price of one good increases, demand for a complementary good must decrease. We obtain its full implications for observable demand behavior (its testable implications), and for the consumer's underlying preferences. We characterize those data sets which can be generated by rational preferences exhibiting complementarities. The class of preferences that generate demand complements has Leontief and Cobb–Douglas as its as extreme members.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/9ys5f-c2621Testable Implications of Gross Substitutes in Demand for Two Goods
https://authors.library.caltech.edu/records/bv2dz-s9s71
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2011
We present a nonparametric "revealed-preference test" for gross substitutes in demand for two goodshttps://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/bv2dz-s9s71Testable Implications of Gross Substitutes in Demand for Two Goods
https://resolver.caltech.edu/CaltechAUTHORS:20160317-150553469
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2011
DOI: 10.1257/mic.3.1.129
We present a nonparametric "revealed-preference test" for gross substitutes in demand for two goodshttps://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/7q4fh-s6f67Implications of Pareto efficiency for two-agent (household) choice
https://resolver.caltech.edu/CaltechAUTHORS:20110713-073733616
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Ivanov-L', 'name': {'family': 'Ivanov', 'given': 'Lozan'}}]}
Year: 2011
DOI: 10.1016/j.jmateco.2011.01.001
We study when two-member household choice behavior is compatible with Pareto optimality. We ask when an external observer of household choices, who does not know the individuals' preferences, can rationalize the choices as being Pareto-optimal. Our main contribution is to reduce the problem of rationalization to a graph-coloring problem. As a result, we obtain simple tests for Pareto optimal choice behavior. In addition to the tests, and using our graph-theoretic representation, we show that Pareto rationalization is equivalent to a system of quadratic equations being solvable.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/3gb8m-w7h79Complexity and economics: computational constraints may not matter empirically
https://resolver.caltech.edu/CaltechAUTHORS:20160321-131503486
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Golovin-D', 'name': {'family': 'Golovin', 'given': 'Daniel'}}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2011
DOI: 10.1145/1978721.1978722
Recent results in complexity theory suggest that various economic theories require agents to solve intractable problems. However, such results assume the agents are optimizing explicit utility functions, whereas the economic theories merely assume the agents' behavior is rationalizable by the optimization of some utility function.
For a major economic theory, the theory of the consumer, we show that behaving in a rationalizable way is easier than the corresponding optimization problem. Specifically, if an agent's behavior is at all rationalizable, then it is rationalizable using a utility function that is easy to maximize in every budget set.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/gw8qh-3y569A revealed preference approach to computational complexity in economics
https://resolver.caltech.edu/CaltechAUTHORS:20120521-110926358
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Golovin-D', 'name': {'family': 'Golovin', 'given': 'Daniel'}}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2011
DOI: 10.1145/1993574.1993591
Recent results in complexity theory suggest that various economic theories require agents to solve computationally intractable problems. However, such results assume the agents are optimizing explicit utility functions, whereas the economic theories merely assume the agents behave rationally, where rational behavior is defined via some optimization problem. Might making rational choices be easier than solving the corresponding optimization problem? For at least one major economic theory, the theory of the consumer (which simply postulates that consumers are utility maximizing), we find this is indeed the case. In other words, we prove the possibly surprising result that computational constraints have no empirical consequences for consumer choice theory.
Our result motivates a general approach for posing questions about the empirical content of computational constraints: the revealed preference approach to computational complexity. This approach complements the conventional worst-case view of computational complexity in important ways, and is methodologically close to mainstream economics.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/9dfmp-vd612The Money Pump as a Measure of Revealed Preference Violations
https://resolver.caltech.edu/CaltechAUTHORS:20160317-145446059
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'Sangmok'}}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2011
DOI: 10.1086/665011
We introduce a measure of the severity of violations of the revealed preference axioms, the money pump index (MPI). The MPI is the amount of money one can extract from a consumer who violates the axioms. It is also a statistical test for the hypothesis that a consumer is rational when behavior is observed with error. We present an application using a panel data set of food expenditures. The data exhibit many violations of the axioms. Mostly, the MPI for these violations is small. The MPI indicates that the hypothesis of consumer rationality cannot be rejected.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/6nbkt-v5g69Contracts versus Salaries in Matching
https://resolver.caltech.edu/CaltechAUTHORS:20171102-165954225
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2012
DOI: 10.1257/aer.102.1.594
Firms and workers may sign complex contracts that govern many aspects of their interactions. I show that when firms regard contracts as substitutes, bargaining over contracts can be understood as bargaining only over wages. Substitutes is the assumption commonly used to guarantee the existence of stable matchings of workers and firms.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/crx34-dat63Finding a Walrasian Equilibrium is Easy for a Fixed Number of Agents
https://resolver.caltech.edu/CaltechAUTHORS:20161010-171918212
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2012
DOI: 10.1145/2229012.2229049
In this work, we study the complexity of finding a Walrasian equilibrium. Our main result gives an algorithm which can compute an approximate Walrasian equilibrium in an exchange economy with general, but well-behaved, utility functions in time that is polynomial in the number of goods when the number of agents is held constant. This result has applications to macroeconomics and finance, where applications of Walrasian equilibrium theory tend to deal with many goods but a fixed number of agents.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/s94hs-bb881Efficiency and Bargaining Power in the Interbank Loan Market
https://resolver.caltech.edu/CaltechAUTHORS:20160329-102445567
Authors: {'items': [{'id': 'Allen-Jason', 'name': {'family': 'Allen', 'given': 'Jason'}}, {'id': 'Chapman-James', 'name': {'family': 'Chapman', 'given': 'James'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2012
Using detailed loan transactions-level data we examine the efficiency of an overnight
interbank lending market, and the bargaining power of its participants. Our analysis relies
on the equilibrium concept of the core, which imposes a set of no-arbitrage conditions on
trades in the market. For Canada we show that while the market is fairly efficient, some
degree of inefficiency persists throughout our sample. The level of inefficiency matches
distinct phases of both the Bank of Canada's operations as well as phases of the 2007-
2008 financial crisis, where more liquidity intervention implies more inefficiency. We
find that bargaining power tilted sharply towards borrowers as the financial crisis
progressed, and towards riskier borrowers. This supports a nuanced version of the Too-
Big-To-Fail story, whereby participants continued to lend to riskier banks at favorable
rates, not because of explicit support to the riskier banks provided by governmental
authorities, but rather due to the collective self-interest of these banks.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/j14wp-jz259When does aggregation reduce risk aversion?
https://resolver.caltech.edu/CaltechAUTHORS:20130214-101049767
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2012
DOI: 10.1016/j.geb.2012.07.015
We study the problem of risk sharing within a household or syndicate. A household
shares risky prospects using a social welfare functional. We characterize the social welfare
functionals such that the household is collectively less risk averse than each member,
and satisfies the Pareto principle and an invariance axiom. We single out the sum of
certainty equivalents as the unique member of this family which is quasiconcave over
riskless allocations.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/xr49q-r9t94Partial Identification in Two-sided Matching Models
https://resolver.caltech.edu/CaltechAUTHORS:20160330-121540651
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'Sangmok'}}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2013
DOI: 10.1108/S0731-9053(2013)0000032004
We propose a methodology for estimating preference parameters in matching models. Our estimator applies to repeated observations of matchings among a fixed group of individuals. Our estimator is based on the stability conditions in matching models; we consider both transferable (TU) and nontransferable utility (NTU) models. In both cases, the stability conditions yield moment inequalities which can be taken to the data. The preference parameters are partially identified. We consider simple illustrative examples, and also an empirical application to aggregate marriage markets.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/19qxt-me041A test for monotone comparative statistics
https://resolver.caltech.edu/CaltechAUTHORS:20171129-134154134
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Komunjer-I', 'name': {'family': 'Komunjer', 'given': 'Ivana'}}]}
Year: 2013
DOI: 10.1108/S0731-9053%282013%290000032007
In this article we design an econometric test for monotone comparative statics (MCS) often found in models with multiple equilibria. Our test exploits the observable implications of the MCS prediction: that the extreme (high and low) conditiona l quantiles of the dependent variable increase monotonically with the explanatory variable. The main contribution of the article is to derive a likelihood-ratio test, which to the best of our knowledge is the first econometric test of MCS proposed in the literature. The test is an asymptotic "chi-bar squared" test for order restrictions on intermediate conditional quantiles. The key features of our approach are: (1) we do not need to estimate the underlying nonparametric model relating the dependent and explanatory variables to the latent disturbances; (2) we make few assumptions on the cardinality, location, or probabilities over equilibria. In particular, one can implement our test without assuming an equilibrium selection rule.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/1pkzh-j0b37The Revealed Preference Theory of Stable and Extremal Stable Matchings
https://resolver.caltech.edu/CaltechAUTHORS:20130225-081304317
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'Sangmok'}}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}, {'id': 'Yenmez-M-B', 'name': {'family': 'Yenmez', 'given': 'M. Bumin'}}]}
Year: 2013
DOI: 10.3982/ECTA10011
We investigate the testable implications of the theory of stable matchings. We provide a characterization of the matchings that are rationalizable as stable matchings when agents' preferences are unobserved. The characterization is a simple nonparametric test for stability, in the tradition of revealed preference tests. We also characterize the observed stable matchings when monetary transfers are allowed and the stable matchings that are best for one side of the market: extremal stable matchings. We find that the theory of extremal stable matchings is observationally equivalent to requiring that there be a unique stable matching or that the matching be consistent with unrestricted monetary transfers.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/kn0e7-1ze54The Empirical Implications of Rank in Bimatrix Games
https://resolver.caltech.edu/CaltechAUTHORS:20131008-155108539
Authors: {'items': [{'id': 'Barman-S', 'name': {'family': 'Barman', 'given': 'Siddharth'}}, {'id': 'Bhaskar-U', 'name': {'family': 'Bhaskar', 'given': 'Umang'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2013
DOI: 10.1145/2492002.2482589
We study the structural complexity of bimatrix games, formalized via rank, from an empirical perspective. We consider a setting where we have data on player behavior in diverse strategic situations, but where we do not observe the relevant payoff functions. We prove that high complexity (high rank) has empirical consequences when arbitrary data is considered. Additionally, we prove that, in more restrictive classes of data (termed laminar), any observation is rationalizable using a low-rank game: specifically a zero-sum game. Hence complexity as a structural property of a game is not always testable. Finally, we prove a general result connecting the structure of the feasible data sets with the highest rank that may be needed to rationalize a set of observations.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/nd3cv-16n60On the Existence of Low-Rank Explanations for Mixed Strategy Behavior
https://resolver.caltech.edu/CaltechAUTHORS:20150615-083251191
Authors: {'items': [{'id': 'Barman-S', 'name': {'family': 'Barman', 'given': 'Siddharth'}}, {'id': 'Bhaskar-U', 'name': {'family': 'Bhaskar', 'given': 'Umang'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2014
DOI: 10.1007/978-3-319-13129-0_38
Nash equilibrium is used as a model to explain the observed behavior of players in strategic settings. For example, in many empirical applications we observe player behavior, and the problem is to determine if there exist payoffs for the players for which the equilibrium corresponds to observed player behavior. Computational complexity of Nash equilibria is important in this framework. If the payoffs that explain observed player behavior requires players to have solved a computationally hard problem, then the explanation provided is questionable. In this paper we provide conditions under which observed behavior of players can be explained by games in which Nash equilibria are easy to compute. We identify three structural conditions and show that if the data set of observed behavior satisfies any of these conditions, then it can be explained by payoff matrices for which Nash equilibria are efficiently computable.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/40ykk-qy211On the consistency of data with bargaining theories
https://resolver.caltech.edu/CaltechAUTHORS:20140307-082628059
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2014
DOI: 10.3982/TE1095
We develop observable restrictions of well known theories of bargaining over money. We suppose that we observe a finite data set of bargaining outcomes, including data on allocations and disagreement points, but no information on utility functions. We ask when a given theory could generate the data. We show that if the disagreement point is fixed and symmetric, the Nash, utilitarian, and egalitarian max-min bargaining solutions are all observationally equivalent. Data compatible with these theories are, in turn, characterized by the property of co-monotonicity of bargaining outcomes.
We establish different tests for each of the theories under consideration in the case in which the disagreement point can be variable. Our results are readily applicable, outside of the bargaining framework, to testing the tax code for compliance with the principle of equal loss.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/7vfak-wgw02The empirical implications of privacy-aware choice
https://resolver.caltech.edu/CaltechAUTHORS:20161005-162239588
Authors: {'items': [{'id': 'Cummings-R', 'name': {'family': 'Cummings', 'given': 'Rachel'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2014
DOI: 10.1145/2600057.2602830
This paper initiates the study of the testable implications of choice data in settings where agents have privacy preferences. We adapt the standard conceptualization of consumer choice theory to a situation where the consumer is aware of, and has preferences over, the information revealed by her choices. The main message of the paper is that little can be inferred about consumers' preferences once we introduce the possibility that the consumer has concerns about privacy. This holds even when consumers' privacy preferences are assumed to be monotonic and separable. This motivates the consideration of stronger assumptions and, to that
end, we introduce an additive model for privacy preferences that does have testable implications.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/g0vaa-01664The Axiomatic Structure of Empirical Content
https://resolver.caltech.edu/CaltechAUTHORS:20141007-100805737
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2014
DOI: 10.1257/aer.104.8.2303
We define the empirical content of an economic theory as the least restrictive observationally equivalent theory. We show that the empirical content of a theory is captured by a certain kind of axiomatization, with axioms that are universal negations of conjunctions of atomic formulae.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/jtazk-9aj54The Core Matchings of Markets with Transfers
https://resolver.caltech.edu/CaltechAUTHORS:20101008-104911510
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2015
DOI: 10.1257/mic.20130089
We characterize the structure of the set of core matchings of an assignment game (a two-sided market with transfers). Such a set satisfies a property we call consistency. Consistency of a set of matchings states that, for any matching v, if, for each agent i there exists a matching μ in the set for which μ(i) = v(i), then v is in the set. A set of matchings satisfies consistency if and only if there is an assignment game for which all elements of the set maximize the surplus.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/8mrns-30p13Savage in the Market
https://resolver.caltech.edu/CaltechAUTHORS:20150828-084210399
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2015
DOI: 10.3982/ECTA12273
We develop a behavioral axiomatic characterization of subjective expected utility (SEU) under risk aversion. Given is an individual agent's behavior in the market: assume a finite collection of asset purchases with corresponding prices. We show that such behavior satisfies a "revealed preference axiom" if and only if there exists a SEU model (a subjective probability over states and a concave utility function over money) that accounts for the given asset purchases.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/54sfk-nxr44How to Control Controlled School Choice
https://resolver.caltech.edu/CaltechAUTHORS:20150828-083614475
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Yenmez-M-B', 'name': {'family': 'Yenmez', 'given': 'M. Bumin'}}]}
Year: 2015
DOI: 10.1257/aer.20130929
We characterize choice rules for schools that regard students as substitutes while expressing preferences for a diverse student body. The stable (or fair) assignment of students to schools requires the latter to regard the former as substitutes. Such a requirement is in conflict with the reality of schools' preferences for diversity. We show that the conflict can be useful, in the sense that certain unique rules emerge from imposing both considerations. We also provide welfare comparisons for students when different choice rules are employed.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/jdgy3-xa449Average Choice
https://resolver.caltech.edu/CaltechAUTHORS:20160321-140851688
Authors: {'items': [{'id': 'Ahn-David', 'name': {'family': 'Ahn', 'given': 'David'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2015
DOI: 10.7907/gnvny-ekt49
This is an investigation of stochastic choice when only the average of the choices is observable. For example when one observes aggregate sales numbers from a store, but not the frequency with which each item was purchased. The focus of our work is on the Luce model, also known as the Logit model. We show that a simple path independence property of average choice uniquely characterizes the Luce model. We also characterize the linear Luce mode, using similar tools. A linear version of the Luce model is used most frequently in empirical work by applied economists.
Our characterization is based on the property of path independence, which runs counter to early impossibility results on path independent choice. From an empirical perspective, our results provide a small-sample advantage over the tests of Luce's model that rely on estimating choice frequencies.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/gnvny-ekt49The Empirical Implications of Privacy-Aware Choice
https://resolver.caltech.edu/CaltechAUTHORS:20160602-090011567
Authors: {'items': [{'id': 'Cummings-R', 'name': {'family': 'Cummings', 'given': 'Rachel'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2016
DOI: 10.1287/opre.2015.1458
This paper initiates the study of the testable implications of choice data in settings where agents have privacy preferences. We adapt the standard conceptualization of consumer choice theory to a situation where the consumer is aware of, and has preferences over, the information revealed by her choices. The main message of the paper is that little can be inferred about consumers' preferences once we introduce the possibility that the consumer has concerns about privacy. This holds even when consumers' privacy preferences are assumed to be monotonic and separable. This motivates the consideration of stronger assumptions and, to that end, we introduce an additive model for privacy preferences that has testable implications.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/60xaz-bkz11Strategic complementarities and unraveling in matching markets
https://resolver.caltech.edu/CaltechAUTHORS:20160225-150950399
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Pereyra-J-S', 'name': {'family': 'Pereyra', 'given': 'Juan Sebastián'}}]}
Year: 2016
DOI: 10.3982/TE1831
We present a theoretical explanation of inefficient early matching in matching markets. Our explanation is based on strategic complementarities and strategic unraveling. We identify a negative externality imposed on the rest of the market by agents who make early offers. As a consequence, an agent may make an early offer because she is concerned that others are making early offers. Yet other agents make early offers because they are concerned that others worry about early offers, and so on and so forth. The end result is that any given agent is more likely to make an early offer than a late offer.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/3v2p7-jyk07Testable Implications of Translation Invariance and Homotheticity: Variational, Maxmin, CARA and CRRA preferences
https://resolver.caltech.edu/CaltechAUTHORS:20160308-151531257
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2016
DOI: 10.7907/wfa41-5z837
We provide revealed preference axioms that characterize models of translation invariant preferences. In particular, we characterize the models of variational, maxmin, CARA and CRRA utilities. In each case we present a revealed preference axiom that is satisfied by a dataset if and only if the dataset is consistent from the corresponding utility representation. Our results complement traditional exercises in decision theory that take preferences as primitive.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/wfa41-5z837The Perception-Adjusted Luce Model
https://resolver.caltech.edu/CaltechAUTHORS:20160321-134531088
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}, {'id': 'Tserenjigmid-G', 'name': {'family': 'Tserenjigmid', 'given': 'Gerelt'}, 'orcid': '0000-0003-1412-9692'}]}
Year: 2016
DOI: 10.7907/spc2v-qkd82
We develop an axiomatic model that builds on Luce's (1959) model to incorporate a role for perception. We identify agents' "perception priorities" from their violations of Luce's axiom of independence from irrelevant alternatives. Using such perception priorities, we adjust choice probabilities to account for the effects of perception. Our axiomatization requires that the agents' adjusted random choice conforms to Luce's model. Our model can explain the attraction, compromise, and similarity effects, which are very well-documented behavioral phenomena in individual choice.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/spc2v-qkd82The Core Matchings of Markets with Transfers
https://resolver.caltech.edu/CaltechAUTHORS:20160321-141503758
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2016
DOI: 10.7907/mzhde-p8e50
We characterize the structure of the set of core matchings of an assignment game (a two-sided market with transfers). Such a set satisfies a property we call consistency. Consistency of a set of matchings states that, for any matching v, if, for each agent i there exists a matching μ in the set for which μ(i) = v(i), then v is in the set. A set of matchings satisfies consistency if and only if there is an assignment game for which all elements of the set maximize the surplus. We also identify conditions under which we can assume the assignment game has nonnegative values.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/mzhde-p8e50Testable Implications of Exponential Discounting
https://resolver.caltech.edu/CaltechAUTHORS:20160321-132448266
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2016
DOI: 10.7907/4jx8b-zxb60
We develop a behavioral axiomatic characterization of exponentially discounted utility (EDU) over consumption streams. Given is an individual agent's behavior in the market: assume a finite collection of purchases across periods. We show that such behavior satisfies a "revealed preference axiom" if and only if there exists a EDU model (a discount rate per period and a concave utility function over money) that accounts for the given intertemporal consumption.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/4jx8b-zxb60Testable Implications of Bargaining Theories
https://resolver.caltech.edu/CaltechAUTHORS:20160322-142103902
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2016
DOI: 10.7907/emff8-xea35
We develop the testable implications of well-known theories of bargaining over money. Given a finite data set of bargaining outcomes, where utility functions are unknown, we ask if a given theory could have generated the observations. When the data come with a fixed disagreement point, we show that the Nash, utilitarian, and the egalitarian max-min bargaining solutions are all observationally equivalent. These theories are in turn characterized by a simple test of comonotonicity of bargaining outcomes.
When the disagreement point is allowed to vary, we characterize the testable implications of the equal gain/loss egalitarian solution. The main application of our result is to testing the tax code for compliance with the principle of equal loss. For other theories, we introduce a general method based on the study of real solutions to systems of polynomial inequalities.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/emff8-xea35Strategic Uncertainty and Unraveling in Matching Markets
https://resolver.caltech.edu/CaltechAUTHORS:20160321-134856275
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Pereyra-J-S', 'name': {'family': 'Pereyra', 'given': 'Juan Sebastián'}}]}
Year: 2016
DOI: 10.7907/qmt4b-v3n68
We present a theoretical explanation of inefficient early matching in matching markets. Our explanation is based on strategic uncertainty and strategic unraveling. We identify a negative externality imposed on the rest of the market by agents who make early offers. As a consequence, an agent may make an early offer because she is concerned that others are making early offers. Yet other agents make early offers because they are concerned that others worry about early offers; and so on and so forth. The end result is that any given agent is more likely to make an early offer than a later offer.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/qmt4b-v3n68Ordinal and cardinal solution concepts for two-sided matching
https://resolver.caltech.edu/CaltechAUTHORS:20160321-134222786
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Galichon-A', 'name': {'family': 'Galichon', 'given': 'Alfred'}}]}
Year: 2016
We characterize solutions for two-sided matching, both in the transferable- and in the nontransferable-utility frameworks, using a cardinal formulation. Our approach makes
the comparison of the matching models with and without transfers particularly transparent. We introduce the concept of a no-trade matching to study the role of transfers in matching. A no-trade matching is one in which the availability of transfers do not affect the outcome.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/p88b3-07536An Experimental Study of Decentralized Matching
https://resolver.caltech.edu/CaltechAUTHORS:20160321-133051578
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Yariv-L', 'name': {'family': 'Yariv', 'given': 'Leeat'}}]}
Year: 2016
We present an experimental study of complex decentralized one-to-one matching markets, such as labor or marriage markets. In our experiments, subjects are informed of everyone's preferences and can make arbitrary non-binding match offers that are realized only when a certain period of market inactivity has elapsed. We find three main results. First, stable matches are the prevalent outcome. Second, in markets with multiple stable matches, the median stable match is selected most frequently. Third, the cardinal representation of ordinal preferences substantially impacts which stable match gets selected. Furthermore, the endogenous dynamic paths that lead to stability exhibit several persistent features.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/h8dnw-q3751The Complexity of Nash Equilibria as Revealed by Data
https://resolver.caltech.edu/CaltechAUTHORS:20160321-140122265
Authors: {'items': [{'id': 'Barman-S', 'name': {'family': 'Barman', 'given': 'Siddharth'}}, {'id': 'Bhaskar-U', 'name': {'family': 'Bhaskar', 'given': 'Umang'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2016
DOI: 10.48550/arXiv.1311.2655
In this paper we initiate the study of the computational complexity of Nash equilibria in bimatrix games that are specified via data. This direction is motivated by an attempt to connect the emerging work on the computational complexity of Nash equilibria with the perspective of revealed preference theory, where inputs are data about observed behavior, rather than explicit payoffs. Our results draw such connections for large classes of data sets, and provide a formal basis for studying these connections more generally. In particular, we derive three structural conditions that are sufficient to ensure that a data set is both consistent with Nash equilibria and that the observed equilibria could have been computed effciently: (i) small dimensionality of the observed strategies, (ii) small support size of the observed strategies, and (iii) small chromatic number of the data set. Key to these results is a connection between data sets and the player rank of a game, defined to be the minimum rank of the payoff matrices of the players. We complement our results by constructing data sets that require rationalizing games to have high player rank, which suggests that computational constraints may be important empirically as well.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/3v666-48k86Response Time and Utility
https://resolver.caltech.edu/CaltechAUTHORS:20160321-135336141
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2016
DOI: 10.7907/fbmth-qyz68
Response time is the time an agent needs to make a decision. One fundamental finding in psychology and neuroscience is that, in a binary choice, the response time is shorter as the difference between the utilities of the two options becomes larger. We consider situations in which utilities are not observed, but rather inferred from revealed preferences: meaning they are inferred from subjects' choices. Given data on subjects' choices, and the time to make those choices, we give conditions on the data that characterize the property that response time is decreasing in utility differences.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/fbmth-qyz68Measurability Is Not About Information
https://resolver.caltech.edu/CaltechAUTHORS:20160321-140546406
Authors: {'items': [{'id': 'Dubra-J', 'name': {'family': 'Dubra', 'given': 'Juan'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2016
We comment on the relation between models of information based on signals/partitions, and those based on σ-algebras. We show that more informative signals need not generate finer σ-algebras, hence that Blackwell's theorem fails if information is modeled as σ-algebras. The reason is that the σ-algebra generated by a partition does not contain all the events that can be known from the information provided by the signal. We also show that there is a non-conventional σ-algebra that can be associated to a signal which does preserve its information content. Further, expectations and conditional expectations may depend on the choice of σ-algebra that is associated to a signal. We provide a simple characterization of when the model is robust to changes in the σ-algebras.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/m9qba-qpp69General Luce Model
https://resolver.caltech.edu/CaltechAUTHORS:20160323-155625592
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2016
DOI: 10.7907/s6fev-wn796
We extend the Luce model of discrete choice theory to satisfactorily handle zero-probability choices. The Luce model (or the Logit model) is the most widely applied and used model in stochastic choice, but it struggles to explain choices that are never made. The Luce model requires that if an alternative y is never chosen when x is available, then there is no set of alternatives from which y is chosen with positive probability: y cannot be chose, if from sets of alternatives that exclude x. We relax this assumption. In our model, if an alternative y is never chosen when x is available, then we infer that y is dominated by x. While dominated by x, y may still be chosen with positive probability - even with high probability - when grouped with a comparable set of alternatives.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/s6fev-wn796Testing theories of financial decision making
https://resolver.caltech.edu/CaltechAUTHORS:20160329-072655949
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2016
DOI: 10.1073/pnas.1517760113
PMCID: PMC4839416
We describe the observable content of some of the most widely used models of decision under uncertainty: models of translation invariant preferences. In particular, we characterize the models of variational, maxmin, constant absolute risk aversion, and constant relative risk aversion utilities. In each case we present a revealed preference axiom that is satisfied by a dataset if and only if the dataset is consistent with the corresponding utility representation. We test our axioms using data from an experiment on financial decisions.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/rgkh0-c6377Efficiency and Bargaining Power in the Interbank Loan Market
https://resolver.caltech.edu/CaltechAUTHORS:20160527-090941607
Authors: {'items': [{'id': 'Allen-J', 'name': {'family': 'Allen', 'given': 'Jason'}}, {'id': 'Chapman-J', 'name': {'family': 'Chapman', 'given': 'James'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2016
DOI: 10.1111/iere.12173
Using detailed transactions-level data on interbank loans, we examine the efficiency of an overnight interbank lending market and the bargaining power of its participants. Our analysis relies on the equilibrium concept of the core, which imposes a set of no-arbitrage conditions on trades in the market. For Canada's Large Value Transfer System, we show that although the market is fairly efficient, systemic inefficiency persists throughout our sample. The level of inefficiency matches distinct phases of both the Bank of Canada's operations as well as phases of the 2007–8 financial crisis. We find that bargaining power tilted sharply toward borrowers as the financial crisis progressed and (surprisingly) toward riskier borrowers.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/q63p1-g8168Clearinghouses for two-sided matching: An experimental study
https://resolver.caltech.edu/CaltechAUTHORS:20170105-162456663
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wilson-A-J', 'name': {'family': 'Wilson', 'given': 'Alistair J.'}}, {'id': 'Yariv-L', 'name': {'family': 'Yariv', 'given': 'Leeat'}}]}
Year: 2016
DOI: 10.3982/QE496
We experimentally study the Gale and Shapley, 1962 mechanism, which is utilized in a wide set of applications, most prominently the National Resident Matching Program (NRMP). Several insights come out of our analysis. First, only 48% of our observed outcomes are stable, and among those a large majority culminate at the receiver-optimal stable matching. Second, receivers rarely truncate their true preferences: it is the proposers who do not make offers in order of their preference, frequently skipping potential partners. Third, market characteristics affect behavior: both the cardinal representation and core size influence whether laboratory outcomes are stable. We conclude by using our controlled results and a behavioral model to shed light on a number of stylized facts we derive from new NRMP survey and outcome data, and to explain the small cores previously documented for the NRMP.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/e0q3b-4d409Efficiency and Bargaining Power in the Interbank Loan market
https://resolver.caltech.edu/CaltechAUTHORS:20160321-133724625
Authors: {'items': [{'id': 'Allen-Jason', 'name': {'family': 'Allen', 'given': 'Jason'}}, {'id': 'Chapman-James', 'name': {'family': 'Chapman', 'given': 'James'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}]}
Year: 2016
We use data on interbank loans and a core equilibrium concept to examine the sufficiency of the interbank market in Canada and the bargaining power of its participants. We show that while the market is fairly sufficient, systemic inefficiency persists throughout our sample. The exact level of inefficiency matches distinct phases of both the Bank of Canada operating procedures as well as phases of the 2007-2008 financial crisis, where more intervention implies more inefficiency. We also find that bargaining power tilted sharply towards borrowers as the the financial crisis progressed. This supports a "weak" version of the Too-Big-To-Fail hypothesis, whereby market participants continued to lend to risky borrowers at favorable rates without the explicit involvement of governmental authorities.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/jyfbq-3pm78Ordinal and cardinal solution concepts for two-sided matching
https://resolver.caltech.edu/CaltechAUTHORS:20170417-152127453
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Galichon-Alfred', 'name': {'family': 'Galichon', 'given': 'Alfred'}}]}
Year: 2017
DOI: 10.1016/j.geb.2015.10.002
We characterize solutions for two-sided matching, both in the transferable- and in the nontransferable-utility frameworks, using a cardinal formulation. Our approach makes the comparison of the matching models with and without transfers particularly transparent. We introduce the concept of a no-trade stable matching to study the role of transfers in matching. A no-trade stable matching is one in which the availability of transfers does not affect the outcome.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/6tnk7-prh16General revealed preference theory
https://resolver.caltech.edu/CaltechAUTHORS:20170622-074223418
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2017
DOI: 10.3982/TE1924
We generalize the standard revealed preference exercise in economics, and prove a sufficient condition under which the revealed preference formulation of an economic theory has universal implications and when these implications can be recursively enumerated. We apply our theorem to two theories of group behavior: the theory of group preference and the theory of Nash equilibrium.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/z7yf4-q0p60Response time and utility
https://resolver.caltech.edu/CaltechAUTHORS:20170628-110121372
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2017
DOI: 10.1016/j.jebo.2017.04.008
Response time is the time an agent needs to make a decision. One fundamental finding in psychology and neuroscience is that, in a binary choice, there is a monotonic relationship between the response time and the difference between the utilities of the two options. We consider situations in which utilities are not observed, but rather inferred from revealed preferences: meaning they are inferred from subjects' choices. Given data on subjects' choices, and the time to make those choices, we give conditions on the data that characterize the property that response time is a monotonic function of utility differences.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/g1ktf-cwk77Preference Identification
https://resolver.caltech.edu/CaltechAUTHORS:20170707-095244159
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lambert-N-S', 'name': {'family': 'Lambert', 'given': 'Nicolas S.'}}]}
Year: 2017
DOI: 10.48550/arXiv.1807.11585
An experimenter seeks to learn a subject's preference relation. The experimenter produces pairs of alternatives. For each pair, the subject is asked to choose. We argue that, in general, large but finite data do not give close approximations of the subject's preference, even when countably infinite many data points are enough to infer the preference perfectly. We then provide sufficient conditions on the set of alternatives, preferences, and sequences of pairs so that the observation of finitely many choices allows the experimenter to learn the subject's preference with arbitrary precision. The sufficient conditions are strong, but encompass many situations of interest. And while preferences are approximated, we show that it is harder to identify utility functions. We illustrate our results with several examples, including expected utility, and preferences in the Anscombe-Aumann model.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/9fe8n-f3z83What Matchings Can Be Stable? The Refutability of Matching Theory
https://resolver.caltech.edu/CaltechAUTHORS:20170801-105611460
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2017
DOI: 10.7907/pwgkb-16d48
When can a collection of matchings be stable, if preferences are unknown? This question lies behind the refutability of matching theory. A preference profile rationalizes a collection of matchings if the matchings are stable under the profile. Matching theory is refutable if there are observations of matchings that cannot be rationalized. I show that the theory is refutable, and provide a characterization of the matchings that can be rationalized.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/pwgkb-16d48Sequential Entry in Many-to-one Matching Markets
https://resolver.caltech.edu/CaltechAUTHORS:20170728-162757118
Authors: {'items': [{'id': 'Boyle-E-C', 'name': {'family': 'Boyle', 'given': 'Elette'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2017
DOI: 10.7907/bwpm5-t6p55
We study sequential bargaining in many-to-one matching markets. We show that there is an advantage to entering late in the market, and that the last agent to enter the market will receive his or her best partner in a stable matching, extending the results of Blum and Rothblum (2002) and Cechlárová (2002) for the marriage model. We also discuss the relation between sequential bargaining and a possible alternative formulation based on the NTU Shapley value.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/bwpm5-t6p55On behavioral complementarity and its implications
https://resolver.caltech.edu/CaltechAUTHORS:20170728-161413630
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shmaya-E', 'name': {'family': 'Shmaya', 'given': 'Eran'}}]}
Year: 2017
DOI: 10.7907/zxcag-rzk39
We study the behavioral definition of complementary goods: if the price of one good increases, demand for a complementary good must decrease. We obtain its full implications for observable demand behavior (its testable implications), and for the consumer's underlying preferences. We characterize those data sets which can be generated by rational preferences exhibiting complementarities. In a model in which income results from selling an endowment (as in general equilibrium models of exchange economies), the notion is surprisingly strong and is essentially equivalent to Leontief preferences. In the model of nominal income, the notion describes a class of preferences whose extreme cases are Leontief and Cobb-Douglas respectively.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/zxcag-rzk39Counting Combinatorial Choice Rules
https://resolver.caltech.edu/CaltechAUTHORS:20170731-131625843
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2017
DOI: 10.7907/5zgfd-ahq27
I count the number of combinatorial choice rules that satisfy certain properties: Kelso-Crawford substitutability, and independence of irrelevant alternatives. The results are important for two-sided matching theory, where agents are modeled by combinatorial choice rules with these properties. The rules are a small, and asymtotically vanishing, fraction of all choice rules. But they are still exponentially more than the preference relations over individual agents—which has positive implications for the Gale-Shapley algorithm of matching theory.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/5zgfd-ahq27Comparative Statics, English Auctions, and the Stolper-Samuelson Theorem
https://resolver.caltech.edu/CaltechAUTHORS:20170731-162537566
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Manelli-A-M', 'name': {'family': 'Manelli', 'given': 'Alejandro M.'}}]}
Year: 2017
DOI: 10.7907/14ndq-cem43
Changes in the parameters of an n-dimensional system of equations induce changes in its solutions. For a class of such systems, we determine the qualitative change in solutions given certain qualitative changes in parameters. Our methods and results are elementary yet useful. They highlight the existence of a common thread, our "own effect" assumption, in formally diverse areas of economics. We discuss several applications; among them, we establish the existence of efficient equilibria in English auctions with interdependent valuations, and a version of the Stolper-Samuelson Theorem for an nxn trade model.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/14ndq-cem43A Theory of Stability in Many-to-many Matching Markets
https://resolver.caltech.edu/CaltechAUTHORS:20170731-153916899
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Oviedo-J', 'name': {'family': 'Oviedo', 'given': 'Jorge'}}]}
Year: 2017
DOI: 10.7907/c57yy-fm360
We develop a theory of stability in many-to-many matching markets. We give conditions under which the setwise-stable set, a core-like concept, is nonempty and can be approached through an algorithm. The setwise-stable set coincides with the pairwise-stable set, and with the predictions of a non-cooperative bargaining model. The set-wise stable set possesses the canonical conflict/coincidence of interest properties from many-to-one, and one-to-one models. The theory parallels the standard theory of stability for many-to-one, and one-to-one, models. We provide results for a number of core-like
solutions, besides the setwise-stable set.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/c57yy-fm360Testing Models with Multiple Equilibria by Quantile Methods
https://resolver.caltech.edu/CaltechAUTHORS:20170802-110804051
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Komunjer-I', 'name': {'family': 'Komunjer', 'given': 'Ivana'}}]}
Year: 2017
DOI: 10.7907/acyxk-m6t07
We derive an econometric test for the presence of monotone comparative statics in models with multiple equilibria. The test applies to many economic models, such as single-person decision, industrial organization, macroeconomic and game-theory models. These models have complementarities between exogenous and endogenous variables. We show that, as a result, extreme (large and small) conditional quantiles of the endogenous variable are increasing in the exogenous variable. We develop a likelihood-ratio test based on estimates for the conditional quantiles of the endogenous variable, which is an asymptotic extension of Bartholomew's (1959a,b) "chi-bar squared" test. Our assumptions are weak; we remain agnostic about the cardinality, location and probabilities of the equilibrium set, and make no restrictions on the equilibrium-selection procedure.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/acyxk-m6t07Supermodularizability
https://resolver.caltech.edu/CaltechAUTHORS:20170802-103018989
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2017
DOI: 10.7907/fhtsk-6aa08
We study the ordinal content of assuming supermodularity, including conditions under which a binary relation can be represented by a supermodular function. When applied to revealed-preference relations, our results imply that supermodularity is some times not refutable: A consumer's choices can be rationalized with a supermodular utility function if they can be rationalized with a monotonic utility function. Hence, supermodularity is not empirically distinguishable from monotonicity. We present applications to assortative matching, decision under uncertainty, and to testing production technologies.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/fhtsk-6aa08Finding a Walrasian equilibrium is easy for a fixed number of agents
https://resolver.caltech.edu/CaltechAUTHORS:20170727-110237088
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}]}
Year: 2017
DOI: 10.7907/wwxc6-hbb24
In this work, we study the complexity of finding a Walrasian equilibrium. Our main result gives an algorithm which can compute an approximate Walrasian equilibrium in an exchange economy with general, but well-behaved utility functions, in time that is polynomial in the number of goods when the number of agents is held constant. This result has applications to macroeconomics and finance, where applications of Walrasian equilibrium theory tend to deal with many goods but a fixed number of agents.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/wwxc6-hbb24Core Many-to-one Matchings by Fixed-Point Methods
https://resolver.caltech.edu/CaltechAUTHORS:20170802-154832632
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Oviedo-J', 'name': {'family': 'Oviedo', 'given': 'Jorge'}}]}
Year: 2017
DOI: 10.7907/8mv8v-a7476
We characterize the core many-to-one matchings as fixed points of a map. Our characterization gives an algorithm for finding core allocations; the algorithm is efficient and simple to implement. Our characterization does not require substitutable preferences, so it is separate from the structure needed for the non-emptiness of the core. When preferences are substitutable, our characterization gives a simple proof of the lattice structure of core matchings, and it gives a method for computing the join and meet of two core matchings.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/8mv8v-a7476A Characterization of Strategic Complementarities
https://resolver.caltech.edu/CaltechAUTHORS:20170802-152808493
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2017
DOI: 10.7907/waxp1-j6f13
I characterize games for which there is an order on strategies such that the game has strategic complementarities. I prove that, with some qualifications, games with a unique equilibrium have complementarities if and only if Cournot best-response dynamics has no cycles; and that all games with multiple equilibria have complementarities.
As applications of my results, I show: 1. That generic 2X2 games either have no pure-strategy equilibria, or have complementarities. 2. That generic two-player infinite ordinal potential games have complementarities.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/waxp1-j6f13Testable Implications of Quasi-Hyperbolic and Exponential Time Discounting
https://resolver.caltech.edu/CaltechAUTHORS:20170726-142753192
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Imai-Taisuke', 'name': {'family': 'Imai', 'given': 'Taisuke'}, 'orcid': '0000-0002-0610-8093'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2017
DOI: 10.7907/je1j3-any80
We present the first revealed-preference characterizations of the models of exponential time discounting, quasi-hyperbolic time discounting, and other time-separable models of consumers' intertemporal decisions. The characterizations provide non-parametric revealed-preference tests, which we take to data using the results of a recent experiment conducted by Andreoni and Sprenger (2012). For such data, we find that less than half the subjects are consistent with exponential discounting, and only a few more are consistent with quasi-hyperbolic discounting.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/je1j3-any80Savage in the Market
https://resolver.caltech.edu/CaltechAUTHORS:20170726-151722235
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2017
DOI: 10.7907/wx589-46888
We develop a behavioral axiomatic characterization of Subjective Expected Utility (SEU) under risk aversion. Given is an individual agent's behavior in the market: assume a finite collection of asset purchases with corresponding prices. We show that such behavior satisfies a "revealed preference axiom" if and only if there exists a SEU model (a subjective probability over states and a concave utility function over money) that accounts for the given asset purchases.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/wx589-46888On multiple discount rates
https://resolver.caltech.edu/CaltechAUTHORS:20170726-084059845
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2017
DOI: 10.7907/v6dnf-qtv34
We propose a theory of intertemporal choice that is robust to specific assumptions on the discount rate. One class of models requires that one utility stream be chosen over another if and only if its discounted value is higher for all discount factors in a set. Another model focuses on an average discount factor. Yet another model is pessimistic, and evaluates a flow by the lowest available discounted value.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/v6dnf-qtv34How to control controlled school choice
https://resolver.caltech.edu/CaltechAUTHORS:20170727-090931100
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Yenmez-M-B', 'name': {'family': 'Yenmez', 'given': 'M. Bumin'}}]}
Year: 2017
DOI: 10.7907/982gm-51w96
We characterize choice rules for schools that regard students as substitutes, while at the same time expressing preferences for the diversity composition of the student body. The stable (or fair) assignment of students to schools requires the latter to regard the former as substitutes. Such a requirement is in conflict with the reality of schools' preferences for a diverse student body. We show that the conflict can be useful, in the sense that certain unique rules emerge from imposing both considerations.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/982gm-51w96Existence and Testable Implications of Extreme Stable Matchings
https://resolver.caltech.edu/CaltechAUTHORS:20170726-142324889
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'Sangmok'}}, {'id': 'Yenmez-M-B', 'name': {'family': 'Yenmez', 'given': 'M. Bumin'}}]}
Year: 2017
DOI: 10.7907/4mcm3-0zj41
We investigate the testable implications of the theory that markets produce matchings that are optimal for one side of the market; i.e. stable extremal matchings. A leading justification for the theory is that markets proceed as if the deferred acceptance algorithm were in place. We find that the theory of stable extremal matching is observationally equivalent to requiring that there be a unique matching, or that the matching be consistent with unrestricted monetary transfers. We also present results on rationalizing a matching as the median stable matching.
We work with a general model of matching, which encompasses aggregate and random matchings as special cases. As a consequence, we need to work with a notion of strong stability, and extend the standard theory on the existence and structure of extremal matchings.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/4mcm3-0zj41A characterization of combinatorial demand
https://resolver.caltech.edu/CaltechAUTHORS:20170725-153042529
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2017
DOI: 10.7907/qrejc-dsd67
We prove that combinatorial demand functions are characterized by two properties: continuity and the law of demand.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/qrejc-dsd67An Explanation of Inefficient Redistribution: Transfers Insure Cohesive groups
https://resolver.caltech.edu/CaltechAUTHORS:20170808-141549284
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Eguia-Jon-X', 'name': {'family': 'Eguia', 'given': 'Jon X.'}}]}
Year: 2017
DOI: 10.7907/px2t2-tw114
Redistributive policies often sustain inefficient economic sectors. Economists routinely argue that governments should let the sectors collapse, and compensate the affected agents. We explain why governments may instead prefer the inefficient redistribution. If income shocks in a given sector are more correlated than in the rest of the economy, and redistribution is related to individuals' income, then by sustaining a sector, the government is also providing its agents with insurance. The agents would lose this insurance if they relocate to another sector. Government transfers to sectors with correlated in- comes are therefore worth more than their monetary value. A preliminary analysis of the publicly-available data suggests that indeed agents in sectors that receive transfers are subject to more correlated income shocks. Our results imply that buying out inefficient sectors may not be the second-best policy when agents cannot fully insure themselves (markets are incomplete).https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/px2t2-tw114A Solution to Matching with Preferences over Colleagues
https://resolver.caltech.edu/CaltechAUTHORS:20170808-153108432
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Yenmez-M-B', 'name': {'family': 'Yenmez', 'given': 'M. Bumin'}}]}
Year: 2017
DOI: 10.7907/vtc5z-bnj02
We study many-to-one matchings, such as the assignment of students to colleges, where the students have preferences over the other students who would attend the same college. It is well known that the core of this model may be empty, without strong assumptions on agents' preferences. We introduce a method that finds all core matchings, if any exist. The method requires no assumptions on preferences. Our method also finds certain partial solutions that may be useful when the core is empty.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/vtc5z-bnj02On path independent stochastic choice
https://resolver.caltech.edu/CaltechAUTHORS:20180215-100647346
Authors: {'items': [{'id': 'Ahn-D-S', 'name': {'family': 'Ahn', 'given': 'David S.'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2018
DOI: 10.3982/TE2653
We investigate stochastic choice when only the average and not the entire distribution of choices is observable, focusing attention on the popular Luce model. Choice is path independent if it is recursive, in the sense that choosing from a menu can be broken up into choosing from smaller submenus. While an important property, path independence is known to be incompatible with continuous choice. The main result of our paper is that a natural modification of path independence, which we call partial path independence, is not only compatible with continuity, but ends up characterizing the ubiquitous Luce (or logit) rule.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/ghmyn-3w557A Characterization of Combinatorial Demand
https://resolver.caltech.edu/CaltechAUTHORS:20180329-161710055
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2018
DOI: 10.1287/moor.2017.0859
We prove that combinatorial demand functions are characterized by two properties: continuity and the law of demand.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/4aad6-whr37The perception-adjusted Luce model
https://resolver.caltech.edu/CaltechAUTHORS:20180228-092329391
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}, {'id': 'Tserenjigmid-G', 'name': {'family': 'Tserenjigmid', 'given': 'Gerelt'}, 'orcid': '0000-0003-1412-9692'}]}
Year: 2018
DOI: 10.1016/j.mathsocsci.2018.02.004
We develop an axiomatic theory of random choice that builds on Luce's (1959) model to incorporate a role for perception. We capture the role of perception through perception priorities; priorities that determine whether an object or alternative is perceived sooner or later than other alternatives. We identify agents' perception priorities from their violations of Luce's axiom of independence from irrelevant alternatives (IIA). The direction of the violation of IIA implies an orientation of agents' priority rankings. We adjust choice probabilities to account for the effects of perception, and impose that adjusted choice probabilities satisfy IIA. So all violations of IIA are accounted for by the perception order. The theory can explain some very well-documented behavioral phenomena in individual choice.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/6z9wj-yap11Learnability and Models of Decision Making under Uncertainty
https://resolver.caltech.edu/CaltechAUTHORS:20180828-142049232
Authors: {'items': [{'id': 'Basu-P', 'name': {'family': 'Basu', 'given': 'Pathikrit'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2018
DOI: 10.1145/3219166.3219223
We study whether some of the most important models of decision-making under uncertainty are uniformly learnable, in the sense of PAC (probably approximately correct) learnability. Many studies in economics rely on Savage's model of (subjective) expected utility. The expected utility model is known to predict behavior that runs counter to how many agents actually make decisions (the contradiction usually takes the form of agents' choices in the Ellsberg paradox). As a consequence, economists have developed models of choice under uncertainty that seek to generalize the basic expected utility model. The resulting models are more general and therefore more flexible, and more prone to overfitting. The purpose of our paper is to understand this added flexibility better. We focus on the classical expected utility (EU) model, and its two most important generalizations: Choquet expected utility (CEU) and Max-min Expected Utility (MEU).
Our setting involves an analyst whose task is to estimate or learn an agent's preference based on data available on the agent's choices. A model of preferences is PAC learnable if the analyst can construct a learning rule to precisely learn the agent's preference with enough data. When a model is not learnable we interpret it as the model being susceptible to overfitting. PAC learnability is known to be characterized by the model's VC dimension: thus our paper takes the form of a study of the VC dimension of economic models of choice under uncertainty. We show that EU and CEU have finite VC dimension, and are consequently learnable. Morever, the sample complexity of the former is linear, and of the latter is exponential, in the number of states of uncertainty. The MEU model is learnable when there are two states but is not learnable when there are at least three states, in which case the VC dimension is infinite. Our results also exhibit a close relationship between learnability and the underlying axioms which characterise the model.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/spd80-1db49On Multiple Discount Rates
https://resolver.caltech.edu/CaltechAUTHORS:20180817-125113975
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2018
DOI: 10.3982/ECTA14866
We study the problem of resolving conflicting discount rates via a social choice approach. We introduce several axioms, seeking to capture the tension between allowing for intergenerational comparisons of utility, and imposing intergenerational fairness. Depending on which axioms are judged appropriate, we are led to one of several conclusions: a utilitarian, maxmin, or a multi‐utilitarian rule, whereby a utility stream is judged by the worst in a set of utilitarian weighting schemes across discount rates.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/x639h-m6h84Testing for separability is hard
https://resolver.caltech.edu/CaltechAUTHORS:20190702-095556303
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2019
DOI: 10.48550/arXiv.1401.4499
This paper shows that it is computationally hard to decide (or test) if a consumption data set is consistent with separable preferences.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/ar6kc-xpr48A Characterization of "Phelpsian" Statistical Discrimination
https://resolver.caltech.edu/CaltechAUTHORS:20191017-160253683
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2019
DOI: 10.48550/arXiv.1808.01351
We establish that statistical discrimination is possible if and only if it is impossible to uniquely identify the signal structure observed by an employer from a realized empirical distribution of skills. The impossibility of statistical discrimination is shown to be equivalent to the existence of a fair, skill-dependent remuneration for every set of tasks every signal-dependent optimal assignment of workers to tasks. Finally, we connect this literature to Bayesian persuasion, establishing that if the possibility of discrimination is absent, then the optimal signalling problem results in a linear payoff function (as well as a kind of converse).https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/jt3cs-mya07Statistical Discrimination and Affirmative Action in the Lab
https://resolver.caltech.edu/CaltechAUTHORS:20191018-165505376
Authors: {'items': [{'id': 'Dianat-Ahrash', 'name': {'family': 'Dianat', 'given': 'Ahrash'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Yariv-L', 'name': {'family': 'Yariv', 'given': 'Leeat'}}]}
Year: 2019
DOI: 10.7907/7aq8f-sfk28
We present results from laboratory experiments studying the impacts of affirmative-action policies. We induce statistical discrimination in simple labor-market interactions between rms and workers. We then introduce affirmative-action policies that vary in the size and duration of a subsidy firms receive for hiring discriminated-against workers. These different affirmative-action policies have nearly the same effect and practically eliminate discriminatory hiring practices. However, once lifted, few positive effects remain and discrimination reverts to its initial levels. One exception is lengthy affirmative-action policies, which exhibit somewhat longer-lived effects. Stickiness of beliefs, which we elicit, helps explain the evolution of these outcomes.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/7aq8f-sfk28Fairness and efficiency for probabilistic allocations with endowments
https://resolver.caltech.edu/CaltechAUTHORS:20191018-122601583
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Zhang-Jun', 'name': {'family': 'Zhang', 'given': 'Jun'}, 'orcid': '0000-0003-4154-3741'}, {'id': 'Miralles-Antonio', 'name': {'family': 'Miralles', 'given': 'Antonio'}, 'orcid': '0000-0001-8146-2140'}]}
Year: 2019
DOI: 10.7907/qfrht-74t85
We propose to use endowments as a policy instrument in market design. Endowments give agents the right to enjoy certain resources. For example in school choice, one can ensure that low-income families have a shot at high-quality schools by endowing them with a chance of admission.
We introduce two new criteria in resource allocation problems with endowments. The first adapts the notion of justified envy to a model with endowments, while the second is based on market equilibrium. Using either criteria, we show that fairness (understood as the absence of justified envy, or as a market outcome) can be obtained together with efficiency and individual rationality.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/qfrht-74t85Approximate Expected Utility Rationalization
https://resolver.caltech.edu/CaltechAUTHORS:20191018-101812371
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Imai-Taisuke', 'name': {'family': 'Imai', 'given': 'Taisuke'}, 'orcid': '0000-0002-0610-8093'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2019
DOI: 10.7907/9ch8a-m6d21
We propose a new measure of deviations from expected utility, given data on economic choices under risk and uncertainty. In a revealed preference setup, and given a positive number e, we provide a characterization of the datasets whose deviation (in beliefs, utility, or perceived prices) is within e of expected utility theory. The number e can then be used as a distance to the theory.
We apply our methodology to three recent large-scale experiments. Many subjects in those experiments are consistent with utility aximization, but not expected utility maximization. The correlation of our measure with demographics is also interesting, and provides new and intuitive findings on expected utility.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/9ch8a-m6d21General Luce model
https://resolver.caltech.edu/CaltechAUTHORS:20191114-143959789
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2019
DOI: 10.1007/s00199-018-1145-5
We extend the Luce model of discrete choice theory to satisfactorily handle zero-probability choices. The Luce mode struggles to explain choices that are not made. The model requires that if an alternative y is never chosen when x is available, then there is no set of alternatives from which y is chosen with positive probability. In our model, if an alternative y is never chosen when x is available, then we infer that y is dominated by x. While dominated by x, y may still be chosen with positive probability, when grouped with a comparable set of alternatives.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/tc3d5-etn39Third-Party Data Providers Ruin Simple Mechanisms
https://resolver.caltech.edu/CaltechAUTHORS:20190626-155536214
Authors: {'items': [{'id': 'Cai-Yang', 'name': {'family': 'Cai', 'given': 'Yang'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Fu-Hu', 'name': {'family': 'Fu', 'given': 'Hu'}}, {'id': 'Ligett-K', 'name': {'family': 'Ligett', 'given': 'Katrina'}, 'orcid': '0000-0003-2780-6656'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}, {'id': 'Ziani-Juba', 'name': {'family': 'Ziani', 'given': 'Juba'}, 'orcid': '0000-0002-3324-4349'}]}
Year: 2020
DOI: 10.1145/3379478
Motivated by the growing prominence of third-party data providers in online marketplaces, this paper studies the impact of the presence of third-party data providers on mechanism design. When no data provider is present, it has been shown that simple mechanisms are "good enough'' -- they can achieve a constant fraction of the revenue of optimal mechanisms. The results in this paper demonstrate that this is no longer true in the presence of a third-party data provider who can provide the bidder with a signal that is correlated with the item type. Specifically, even with a single seller, a single bidder, and a single item of uncertain type for sale, the strategies of pricing each item-type separately (the analog of item pricing for multi-item auctions) and bundling all item-types under a single price (the analog of grand bundling) can both simultaneously be a logarithmic factor worse than the optimal revenue. Further, in the presence of a data provider, item-type partitioning mechanisms---a more general class of mechanisms which divide item-types into disjoint groups and offer prices for each group---still cannot achieve within a $łog łog$ factor of the optimal revenue. Thus, our results highlight that the presence of a data-provider forces the use of more complicated mechanisms in order to achieve a constant fraction of the optimal revenue.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/r67cj-d4544The Pareto Comparisons of a Group of Exponential Discounters
https://resolver.caltech.edu/CaltechAUTHORS:20200521-105245076
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2020
DOI: 10.1287/moor.2019.1004
Agents with different discount factors disagree about some intertemporal trade-offs, but they will also agree sometimes. We seek to understand precisely the nature of their agreements and disagreements. A group of agents is identified with a set of discount factors. We characterize the comparisons that a given interval of discount factors will agree on, including what all discount factors in the interval [0, 1] will agree on. Our result is analogous to how all risk-averse and monotone agents agree on mean-preserving spreads. Motivated by a maxmin representation, we also characterize the comparisons that are consistent with some set of discount factors, when the set is not known or exogenously given. In other words, we describe the Pareto comparisons that are consistent with a society, or group, of exponentially discounting agents.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/zsxwb-wv027Third-Party Data Providers Ruin Simple Mechanisms
https://resolver.caltech.edu/CaltechAUTHORS:20200709-084932341
Authors: {'items': [{'id': 'Cai-Yang', 'name': {'family': 'Cai', 'given': 'Yang'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Fu-Hu', 'name': {'family': 'Fu', 'given': 'Hu'}}, {'id': 'Ligett-K', 'name': {'family': 'Ligett', 'given': 'Katrina'}, 'orcid': '0000-0003-2780-6656'}, {'id': 'Wierman-A', 'name': {'family': 'Wierman', 'given': 'Adam'}}, {'id': 'Ziani-Juba', 'name': {'family': 'Ziani', 'given': 'Juba'}, 'orcid': '0000-0002-3324-4349'}]}
Year: 2020
DOI: 10.1145/3410048.3410108
Motivated by the growing prominence of third-party data providers in online marketplaces, this paper studies the impact of the presence of third-party data providers on mechanism design. When no data provider is present, it has been shown that simple mechanisms are "good enough" -they can achieve a constant fraction of the revenue of optimal mechanisms. The results in this paper demonstrate that this is no longer true in the presence of a third-party data provider who can provide the bidder with a signal that is correlated with the item type. Specifically, even with a single seller, a single bidder, and a single item of uncertain type for sale, the strategies of pricing each item-type separately (the analog of item pricing for multiitem auctions) and bundling all item-types under a single price (the analog of grand bundling) can both simultaneously be a logarithmic factor worse than the optimal revenue. Further, in the presence of a data provider, item-type partitioning mechanisms-a more general class of mechanisms which divide item-types into disjoint groups and offer prices for each group-still cannot achieve within a log log factor of the optimal revenue. Thus, our results highlight that the presence of a data-provider forces the use of more complicated mechanisms in order to achieve a constant fraction of the optimal revenue.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/hdp6f-c2s32The Edgeworth Conjecture with Small Coalitions and Approximate Equilibria in Large Economies
https://resolver.caltech.edu/CaltechAUTHORS:20190626-090938938
Authors: {'items': [{'id': 'Barman-Siddharth', 'name': {'family': 'Barman', 'given': 'Siddharth'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2020
DOI: 10.1145/3391403.3399481
We revisit the connection between bargaining and equilibrium in exchange economies, and study its algorithmic implications. We consider bargaining outcomes to be allocations that cannot be blocked (i.e., profitably re-traded) by coalitions of small size and show that these allocations must be approximate Walrasian equilibria. Our results imply that deciding whether an allocation is approximately Walrasian can be done in polynomial time, even in economies for which finding an equilibrium is known to be computationally hard.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/55cr6-a9a31New Developments in Revealed Preference Theory: Decisions Under Risk, Uncertainty, and Intertemporal Choice
https://resolver.caltech.edu/CaltechAUTHORS:20201210-152928419
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2020
DOI: 10.1146/annurev-economics-082019-110800
This article reviews recent developments in revealed preference theory. It discusses the testable implications of theories of choice that are germane to specific economic environments. The focus is on expected utility in risky environments, subjected expected utility and maxmin expected utility in the presence of uncertainty, and exponentially discounted utility for intertemporal choice. The testable implications of these theories for data on choice from classical linear budget sets are described and shown to follow a common thread. The theories all imply an inverse relation between prices and quantities, with different qualifications depending on the functional forms in the theory under consideration.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/3qswx-ncj53Spherical Preferences
https://resolver.caltech.edu/CaltechAUTHORS:20190626-145326274
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2020
DOI: 10.1016/j.jet.2020.105086
We introduce and study the property of orthogonal independence, a restricted additivity axiom applying when alternatives are orthogonal. The axiom requires that the preference for one marginal change over another should be maintained after each marginal change has been shifted in a direction that is orthogonal to both.
We show that continuous preferences satisfy orthogonal independence if and only if they are spherical: their indifference curves are spheres with the same center, with preference being "monotone" either away or towards the center. Spherical preferences include linear preferences as a special (limiting) case. We discuss different applications to economic and political environments. Our result delivers Euclidean preferences in models of spatial voting, quadratic welfare aggregation in social choice, and expected utility in models of choice under uncertainty.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/xw0dr-dfr92Testable Implications of Models of Intertemporal Choice: Exponential Discounting and Its Generalizations
https://resolver.caltech.edu/CaltechAUTHORS:20201214-070708764
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Imai-Taisuke', 'name': {'family': 'Imai', 'given': 'Taisuke'}, 'orcid': '0000-0002-0610-8093'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2020
DOI: 10.1257/mic.20180028
We present revealed-preference characterizations of the most common models of intertemporal choice: the model of exponentially discounted concave utility, and some of its generalizations. Our characterizations take consumption data as primitives, and provide nonparametric revealed-preference tests. We apply our tests to data from two recent experiments and find that our axiomatization delivers new insights and perspectives on datasets that had been analyzed by traditional parametric methods.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/y5yt1-aq411On the falsifiability and learnability of decision theories
https://resolver.caltech.edu/CaltechAUTHORS:20210209-152718234
Authors: {'items': [{'id': 'Basu-Pathikrit', 'name': {'family': 'Basu', 'given': 'Pathikrit'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2020
DOI: 10.3982/te3438
We study the degree of falsifiability of theories of choice. A theory is easy to falsify if relatively small datasets are enough to guarantee that the theory can be falsified: the VC dimension of a theory is the largest sample size for which the theory is "never falsifiable." VC dimension is motivated strategically. We consider a model with a strategic proponent of a theory, and a skeptical consumer, or user, of theories. The former presents experimental evidence in favor of the theory, and the latter may doubt whether the experiment could ever have falsified the theory. We focus on decision-making under uncertainty, considering the central models of Expected Utility, Choquet Expected Utility and Max-min Expected Utility models. We show that Expected Utility has VC dimension that grows linearly with the number of states while that of Choquet Expected Utility grows exponentially. The Max-min Expected Utility model has infinite VC dimension when there are at least three states of the world. In consequence, Expected Utility is easily falsified, while the more flexible Choquet and Max-min Expected Utility are hard to falsify. Finally, as VC dimension and statistical estimation are related, we study the implications of our results for machine learning approaches to preference recovery.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/6w7a1-b5g77Approximate Expected Utility Rationalization
https://resolver.caltech.edu/CaltechAUTHORS:20210303-132639472
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Imai-Taisuke', 'name': {'family': 'Imai', 'given': 'Taisuke'}, 'orcid': '0000-0002-0610-8093'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2021
DOI: 10.48550/arXiv.2102.06331
We propose a new measure of deviations from expected utility theory. For any positive number e, we give a characterization of the datasets with a rationalization that is within e (in beliefs, utility, or perceived prices) of expected utility theory. The number e can then be used as a measure of how far the data is to expected utility theory. We apply our methodology to data from three large-scale experiments. Many subjects in those experiments are consistent with utility maximization, but not with expected utility maximization. Our measure of distance to expected utility is correlated with subjects' demographic characteristics.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/5xqrp-hsz23Incentive Compatible Active Learning
https://resolver.caltech.edu/CaltechAUTHORS:20210304-085754936
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Prasad-Siddharth', 'name': {'family': 'Prasad', 'given': 'Siddharth'}}]}
Year: 2021
DOI: 10.48550/arXiv.1911.05171
We consider active learning under incentive compatibility constraints. The main application of our results is to economic experiments, in which a learner seeks to infer the parameters of a subject's preferences: for example their attitudes towards risk, or their beliefs over uncertain events. By cleverly adapting the experimental design, one can save on the time spent by subjects in the laboratory, or maximize the information obtained from each subject in a given laboratory session; but the resulting adaptive design raises complications due to incentive compatibility. A subject in the lab may answer questions strategically, and not truthfully, so as to steer subsequent questions in a profitable direction.
We analyze two standard economic problems: inference of preferences over risk from multiple price lists, and belief elicitation in experiments on choice over uncertainty. In the first setting, we tune a simple and fast learning algorithm to retain certain incentive compatibility properties. In the second setting, we provide an incentive compatible learning algorithm based on scoring rules with query complexity that differs from obvious methods of achieving fast learning rates only by subpolynomial factors. Thus, for these areas of application, incentive compatibility may be achieved without paying a large sample complexity price.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/9wfsp-yff60Decision Making under Uncertainty: An Experimental Study in Market Settings
https://resolver.caltech.edu/CaltechAUTHORS:20210303-155349183
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Imai-Taisuke', 'name': {'family': 'Imai', 'given': 'Taisuke'}, 'orcid': '0000-0002-0610-8093'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2021
We design and implement a novel experimental test of subjective expected utility theory and its generalizations. Our experiments are implemented in the laboratory with a student population and pushed out through a large-scale panel to a general sample of the U.S. population. We find that a majority of subjects' choices are consistent with the maximization of some utility function, but not with subjective utility theory. The theory is tested by gauging how subjects respond to price changes. A majority of subjects respond to price changes in the direction predicted by the theory, but not to a degree that makes them fully consistent with subjective expected utility. Surprisingly, maxmin expected utility adds no explanatory power to subjective expected utility.
Our findings remain the same regardless of whether we look at laboratory data or the panel survey, even though the two subject populations are very different. The degree of violations of subjective expected utility theory is not affected by age nor cognitive ability, but it is correlated with financial literacy.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/dhmkk-yq437Stability and Median Rationalizability for Aggregate Matchings
https://resolver.caltech.edu/CaltechAUTHORS:20210503-143303932
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'SangMok'}}, {'id': 'Shum-M', 'name': {'family': 'Shum', 'given': 'Matthew'}, 'orcid': '0000-0002-6262-915X'}, {'id': 'Yenmez-M-Bumin', 'name': {'family': 'Yenmez', 'given': 'M. Bumin'}}]}
Year: 2021
DOI: 10.3390/g12020033
We develop the theory of stability for aggregate matchings used in empirical studies and establish fundamental properties of stable matchings including the result that the set of stable matchings is a non-empty, complete, and distributive lattice. Aggregate matchings are relevant as matching data in revealed preference theory. We present a result on rationalizing a matching data as the median stable matching.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/h9f3c-yvq12Recovering Preferences from Finite Data
https://resolver.caltech.edu/CaltechAUTHORS:20210303-151215927
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Lambert-Nicolas-S', 'name': {'family': 'Lambert', 'given': 'Nicolas S.'}}]}
Year: 2021
DOI: 10.3982/ECTA17845
We study preferences estimated from finite choice experiments and provide sufficient conditions for convergence to a unique underlying "true" preference. Our conditions are weak and, therefore, valid in a wide range of economic environments. We develop applications to expected utility theory, choice over consumption bundles, and menu choice. Our framework unifies the revealed preference tradition with models that allow for errors.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/4k0z7-27z87Fairness and efficiency for allocations with participation constraints
https://resolver.caltech.edu/CaltechAUTHORS:20210303-151951189
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Miralles-Antonio', 'name': {'family': 'Miralles', 'given': 'Antonio'}, 'orcid': '0000-0001-8146-2140'}, {'id': 'Zhang-Jun', 'name': {'family': 'Zhang', 'given': 'Jun'}, 'orcid': '0000-0003-4154-3741'}]}
Year: 2021
DOI: 10.1016/j.jet.2021.105274
We propose a notion of fairness for allocation problems in which different agents may have different reservation utilities, stemming from different outside options, or property rights. Fairness is usually understood as the absence of envy, but this can be incompatible with reservation utilities. It is possible that Alice's envy of Bob's assignment cannot be remedied without violating Bob's participation constraint. Instead, we seek to rule out justified envy, defined as envy for which a remedy would not violate any agent's participation constraint. We show that fairness, meaning the absence of justified envy, can be achieved together with efficiency and individual rationality. We introduce a competitive equilibrium approach with price-dependent incomes obtaining the desired properties.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/qm8s9-qwk56A Characterisation of 'Phelpsian' Statistical Discrimination
https://resolver.caltech.edu/CaltechAUTHORS:20210729-212407084
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2021
DOI: 10.1093/ej/ueaa107
We establish that a type of statistical discrimination—that based on informativeness of signals about workers' skills and the ability appropriately to match workers to tasks—is possible if and only if it is impossible uniquely to identify the signal structure observed by an employer from a realised empirical distribution of skills. The impossibility of statistical discrimination is shown to be equivalent to the existence of a fair, skill-dependent, remuneration for workers. Finally, we connect the statistical discrimination literature to Bayesian persuasion, establishing that if discrimination is absent, then the optimal signalling problem results in a linear pay-off function (as well as a kind of converse).https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/495mn-t0b69Constrained Pseudo-Market Equilibrium
https://resolver.caltech.edu/CaltechAUTHORS:20210304-093802203
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Miralles-Antonio', 'name': {'family': 'Miralles', 'given': 'Antonio'}, 'orcid': '0000-0001-8146-2140'}, {'id': 'Zhang-Jun', 'name': {'family': 'Zhang', 'given': 'Jun'}, 'orcid': '0000-0003-4154-3741'}]}
Year: 2021
DOI: 10.1257/aer.20201769
We propose a pseudo-market solution to resource allocation problems subject to constraints. Our treatment of constraints is general: including bihierarchical constraints due to considerations of diversity in school choice, or scheduling in course allocation; and other forms of constraints needed to model, for example, the market for roommates, combinatorial assignment problems, and knapsack constraints. Constraints give rise to pecuniary externalities, which are internalized via prices. Agents pay to the extent that their purchases affect the value the of relevant constraints at equilibrium prices. The result is a constrained-efficient market-equilibrium outcome. The outcome is fair to the extent that constraints treat agents symmetrically.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/8qe9x-d3e47Statistical discrimination and affirmative action in the lab
https://resolver.caltech.edu/CaltechAUTHORS:20211208-558195000
Authors: {'items': [{'id': 'Dianat-Ahrash', 'name': {'family': 'Dianat', 'given': 'Ahrash'}}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Yariv-L', 'name': {'family': 'Yariv', 'given': 'Leeat'}}]}
Year: 2022
DOI: 10.1016/j.geb.2021.11.013
We present results from laboratory experiments studying statistical discrimination and affirmative action. We induce statistical discrimination in simple labor-market interactions between firms and workers. We then introduce affirmative-action policies that vary in the size and duration of a subsidy that firms receive for hiring discriminated-against workers. These different affirmative-action policies have nearly the same effect, and practically eliminate discriminatory hiring practices. However, once lifted, few positive effects remain and discrimination reverts to its initial levels. One exception is lengthy affirmative-action policies, which exhibit somewhat longer-lived effects. Stickiness of beliefs, which we elicit, helps explain the observed outcomes.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/t33t8-1v215Twofold multiprior preferences and failures of contingent reasoning
https://resolver.caltech.edu/CaltechAUTHORS:20210303-133740093
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Miyashita-Masaki', 'name': {'family': 'Miyashita', 'given': 'Masaki'}, 'orcid': '0000-0002-9812-4225'}, {'id': 'Nakamura-Yuta', 'name': {'family': 'Nakamura', 'given': 'Yuta'}, 'orcid': '0000-0001-9725-3159'}, {'id': 'Pomatto-L', 'name': {'family': 'Pomatto', 'given': 'Luciano'}, 'orcid': '0000-0002-4331-8436'}, {'id': 'Vinson-Jamie', 'name': {'family': 'Vinson', 'given': 'Jamie'}, 'orcid': '0000-0002-0267-0396'}]}
Year: 2022
DOI: 10.1016/j.jet.2022.105448
We propose a model of incomplete twofold multiprior preferences, in which an act f is ranked above an act g only when f provides higher utility in a worst-case scenario than what g provides in a best-case scenario. The model explains failures of contingent reasoning, captured through a weakening of the state-by-state monotonicity (or dominance) axiom. Our model gives rise to rich comparative statics results, as well as extension exercises, and connections to choice theory. We present an application to second-price auctions.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/e641v-w8t25Top of the Batch: Interviews and the Match
https://resolver.caltech.edu/CaltechAUTHORS:20210304-084112774
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'González-Ruy', 'name': {'family': 'González', 'given': 'Ruy'}}, {'id': 'Wilson-Alistair-J', 'name': {'family': 'Wilson', 'given': 'Alistair J.'}, 'orcid': '0000-0001-8118-2376'}, {'id': 'Yariv-L', 'name': {'family': 'Yariv', 'given': 'Leeat'}}]}
Year: 2022
DOI: 10.1257/aeri.20200800
Most doctors in the National Resident Matching Program (NRMP) match with one of their most preferred internship programs. However, surveys indicate doctors' preferences are similar, suggesting a puzzle: how can so many doctors match with their top choices when positions are scarce? We provide one possible explanation. We show that the patterns in the NRMP data may be an artifact of the interview process that precedes the match. Our study highlights the importance of understanding market interactions occurring before and after a matching clearinghouse. It casts doubts on analyses of clearinghouses that take reported preferences at face value.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/h2es0-7yb25Screening p-Hackers: Dissemination Noise as Bait
https://resolver.caltech.edu/CaltechAUTHORS:20220707-170534070
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'He-Kevin', 'name': {'family': 'He', 'given': 'Kevin'}, 'orcid': '0000-0001-5806-0370'}]}
Year: 2022
DOI: 10.1145/3490486.3538358
We show that adding noise to data before making data public is effective at screening p-hacked findings: spurious explanations of the outcome variable produced by attempting multiple econometric specifications. Noise creates "baits'' that affect two types of researchers differently. Uninformed p-hackers who engage in data mining with no prior information about the true causal mechanism often fall for baits and report verifiably wrong results when evaluated with the original data. But informed researchers who start with an ex-ante hypothesis about the causal mechanism before seeing any data are minimally affected by noise. We characterize the optimal level of dissemination noise and highlight the relevant trade-offs in a simple theoretical model. Dissemination noise is a tool that statistical agencies (e.g., the US Census Bureau) currently use to protect privacy, and we show this existing practice can be repurposed to improve research credibility.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/y3ejs-7mr36Closure Operators: Complexity and Applications to Classification and Decision-making
https://resolver.caltech.edu/CaltechAUTHORS:20220707-170604478
Authors: {'items': [{'id': 'Hamze-Bajgiran-Hamed', 'name': {'family': 'Hamze Bajgiran', 'given': 'Hamed'}, 'orcid': '0000-0002-6246-2783'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2022
DOI: 10.1145/3490486.3538253
We study the complexity of closure operators, with applications to machine learning and decision theory. In machine learning, closure operators emerge naturally in data classification and clustering. In decision theory, they can model equivalence of choice menus, and therefore situations with a preference for flexibility. Our contribution is to formulate a notion of complexity of closure operators, which translate into the complexity of a classifier in ML, or of a utility function in decision theory.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/7mcts-v5g27On the meaning of the Critical Cost Efficiency Index
https://resolver.caltech.edu/CaltechAUTHORS:20220707-170544191
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2022
DOI: 10.48550/arXiv.2109.06354
This note provides a critical discussion of the Critical Cost-Efficiency Index} (CCEI) as used to assess deviations from utility-maximizing behavior. I argue that the CCEI is hard to interpret, and that it can disagree with other plausible measures of "irrational" behavior. The common interpretation of CCEI as wasted income is questionable. Moreover, I show that one agent may have more unstable preferences than another, but seem more rational according to the CCEI. This calls into question the (now common) use of CCEI as an ordinal and cardinal measure of degrees of rationality.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/eh06f-bnr74Empirical Welfare Economics
https://resolver.caltech.edu/CaltechAUTHORS:20220707-170540821
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2022
DOI: 10.48550/arXiv.2108.03277
Welfare economics relies on access to agents' utility functions: we revisit classical questions in welfare economics, assuming access to data on agents' past choices instead of their utilities. Our main result considers the existence of utilities that render a given allocation Pareto optimal. We show that a candidate allocation is efficient for some utilities consistent with the choice data if and only if it is efficient for an incomplete relation derived from the revealed preference relations and convexity. Similar ideas are used to make counterfactual choices for a single consumer, policy comparisons by the Kaldor criterion, and determining which allocations, and which prices, may be part of a Walrasian equilibrium.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/jbqsq-4p489Decreasing Impatience
https://resolver.caltech.edu/CaltechAUTHORS:20220707-170530700
Authors: {'items': [{'id': 'Chambers-C-P', 'name': {'family': 'Chambers', 'given': 'Christopher P.'}, 'orcid': '0000-0001-8253-0328'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Miller-Alan-D', 'name': {'family': 'Miller', 'given': 'Alan D.'}}]}
Year: 2022
DOI: 10.48550/arXiv.2103.03290
We characterize decreasing impatience, a common behavioral phenomenon in intertemporal choice, and a property with certain normative support in the literature on project evaluation. Discount factors that display decreasing impatience are characterized through a convexity axiom for investments at fixed interest rates. Then we show that they are equivalent to a geometric average of generalized quasi-hyperbolic discount rates. Finally, they emerge through parimutuel preference aggregation of exponential discount factors.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/f3ttw-y8m76Stable allocations in discrete economies
https://resolver.caltech.edu/CaltechAUTHORS:20220707-170601103
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Goel-Sumit', 'name': {'family': 'Goel', 'given': 'Sumit'}}, {'id': 'Lee-Sangmok', 'name': {'family': 'Lee', 'given': 'Sangmok'}}]}
Year: 2022
DOI: 10.48550/arXiv.arXiv.2202.04706
We study discrete allocation problems, as in the textbook notion of an exchange economy, but with indivisible goods. The problem is well-known to be difficult. The model is rich enough to encode some of the most pathological bargaining configurations in game theory, like the roommate problem. Our contribution is to show the existence of stable allocations (outcomes in the weak core, or in the bargaining set) under different sets of assumptions. Specifically, we consider dichotomous preferences, categorical economies, and discrete TU markets. The paper uses varied techniques, from Scarf's balanced games to a generalization of the TTC algorithm by means of Tarski fixed points.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/gqsgb-9fe36Efficiency in Random Resource Allocation and Social Choice
https://resolver.caltech.edu/CaltechAUTHORS:20220707-170628097
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Root-Joseph', 'name': {'family': 'Root', 'given': 'Joseph'}}, {'id': 'Sandomirskiy-Fedor', 'name': {'family': 'Sandomirskiy', 'given': 'Fedor'}, 'orcid': '0000-0001-9886-3688'}]}
Year: 2022
DOI: 10.48550/arXiv.arXiv.2203.06353
We study efficiency in general collective choice problems when agents have ordinal preferences and randomization is allowed. We establish the equivalence between welfare maximization and ex-ante efficiency for general domains. We relate ex-ante efficiency with ex-post efficiency, characterizing when the two notions coincide. Our results have implications for well-studied mechanisms including random serial dictatorship and a number of specific environments, including the dichotomous, single-peaked, and social choice domains.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/99sma-7ry89The Edgeworth Conjecture with Small Coalitions and Approximate Equilibria in Large Economies
https://resolver.caltech.edu/CaltechAUTHORS:20220810-253911000
Authors: {'items': [{'id': 'Barman-Siddharth', 'name': {'family': 'Barman', 'given': 'Siddharth'}, 'orcid': '0000-0001-9276-2181'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}]}
Year: 2022
DOI: 10.1287/moor.2022.1263
We revisit the connection between bargaining and equilibrium in exchange economies and study its algorithmic implications. We consider bargaining outcomes to be allocations that cannot be blocked (i.e., profitably retraded) by coalitions of small size, and show that these allocations must be approximate Walrasian equilibria. Our results imply that deciding whether an allocation is approximately Walrasian can be done in polynomial time, even in economies for which finding an equilibrium is known to be computationally hard.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/y5zxk-4ty86Cite-seeing and reviewing: A study on citation bias in peer review
https://authors.library.caltech.edu/records/e9s5x-n1e83
Authors: {'items': [{'id': 'Stelmakh-Ivan', 'name': {'family': 'Stelmakh', 'given': 'Ivan'}, 'orcid': '0000-0002-9237-7379'}, {'id': 'Rastogi-Charvi', 'name': {'family': 'Rastogi', 'given': 'Charvi'}, 'orcid': '0000-0003-0820-4115'}, {'id': 'Liu-Ryan', 'name': {'family': 'Liu', 'given': 'Ryan'}, 'orcid': '0009-0003-8755-649X'}, {'id': 'Chawla-Shuchi', 'name': {'family': 'Chawla', 'given': 'Shuchi'}, 'orcid': '0000-0001-5583-2320'}, {'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Shah-Nihar-B', 'name': {'family': 'Shah', 'given': 'Nihar B.'}, 'orcid': '0000-0001-5158-9677'}]}
Year: 2023
DOI: 10.1371/journal.pone.0283980
PMCID: PMC10328240
<p>Citations play an important role in researchers' careers as a key factor in evaluation of scientific impact. Many anecdotes advice authors to exploit this fact and cite prospective reviewers to try obtaining a more positive evaluation for their submission. In this work, we investigate if such a <i>citation bias</i> actually exists: Does the citation of a reviewer's own work in a submission cause them to be positively biased towards the submission? In conjunction with the review process of two flagship conferences in machine learning and algorithmic economics, we execute an observational study to test for citation bias in peer review. In our analysis, we carefully account for various confounding factors such as paper quality and reviewer expertise, and apply different modeling techniques to alleviate concerns regarding the model mismatch. Overall, our analysis involves 1,314 papers and 1,717 reviewers and detects citation bias in both venues we consider. In terms of the effect size, by citing a reviewer's work, a submission has a non-trivial chance of getting a higher score from the reviewer: an expected increase in the score is approximately 0.23 on a 5-point Likert item. For reference, a one-point increase of a score by a single reviewer improves the position of a submission by 11% on average.</p>https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/e9s5x-n1e83Approximate Expected Utility Rationalization
https://resolver.caltech.edu/CaltechAUTHORS:20230717-55915200.35
Authors: {'items': [{'id': 'Echenique-F', 'name': {'family': 'Echenique', 'given': 'Federico'}, 'orcid': '0000-0002-1567-6770'}, {'id': 'Imai-Taisuke', 'name': {'family': 'Imai', 'given': 'Taisuke'}, 'orcid': '0000-0002-0610-8093'}, {'id': 'Saito-Kota', 'name': {'family': 'Saito', 'given': 'Kota'}, 'orcid': '0000-0003-1189-8912'}]}
Year: 2023
DOI: 10.1093/jeea/jvad028
We propose a new measure of deviations from expected utility theory. For any positive number e, we give a characterization of the datasets with a rationalization that is within e (in beliefs, utility, or perceived prices) of expected utility (EU) theory, under the assumption of risk aversion. The number e can then be used as a measure of how far the data is to EU theory. We apply our methodology to data from three large-scale experiments. Many subjects in these experiments are consistent with utility maximization, but not with EU maximization. Our measure of distance to expected utility is correlated with the subjects' demographic characteristics.https://authors.library.caltech.eduhttps://authors.library.caltech.edu/records/ekcgk-93m11