Noncompensatory Consideration and Compensatory Choice : an Application to Stackelberg Competition

I would like to thank Ran Spiegler for his helpful suggestions. I am also grateful to Miguel Angel Ballester, Johannes Hoerner, Philippe Jehiel, Erika Magnago, Paola Manzini, Marco Mariotti, William Neilson, an anonymous referee, the editor Nicholas C. Yannelis, and the seminar audience at Aberdeen and UCL for their comments. Any error is my own responsibility.Peer reviewedPreprin

Satisficing and maximizing consumers in a monopolistic screening model

This paper is based on a chapter of my Ph.D. dissertation. I would like to thank Jose Apesteguia, Daniel Danau, Seong-Hoon Kim, Paola Manzini, Ricardo Alberto Marques Pereira, and my supervisors, Marco Mariotti and Luigi Mittone, for their helpful comments. I am also grateful to the editor, the associated editor, and two referees. Any error is my own responsibility.Peer reviewedPostprin

Price competition with satisficing consumers

∗This version: August 2017. I would like to thank the Editor of this journal, two anonymous referees, Ed Hopkins, Hans Hvide, Kohei Kawamura, Ran Spiegler, the seminar audience at universities of Aberdeen, East Anglia, and Trento, and the participants to the 2015 OLIGO workshop (Madrid) and the 2015 Econometric Society World Congress (Montreal) for their comments. Financial support from the Aberdeen Principal’s Excellence Fund and the Scottish Institute for Research in Economics is gratefully acknowledged. Any error is my own responsibilityPeer reviewedPostprin

‘What is Important is Seldom Urgent and What is Urgent is Seldom Important’ : A Study of the Strategic Implications of the Urgency Effect in a Competitive Setting

Acknowledgments. The quote included in the title of the paper is due to Dwight D. Eisenhower, 34th president of the USA. I am grateful to an anonymous referee, Ramses Abul Naga, Álvaro Delgado Vega, Frans de Vries, and Raghul Venkatesh for their detailed comments. I would also like to thank the seminar audience at the University of Málaga and the participants to the 2021 OLIGO workshop (Maastricht). Financial support from the University of Aberdeen Business School is gratefully acknowledged. Any error is my own responsibility.Peer reviewedPublisher PD

Does inducing choice procedures make individuals better off? An experimental study

Open access via Springer Compact Agreement We would like to thank Marco Tecilla for excellent computer programming. We are extremely grateful to an anonymous referee for her/his support to our paper, the many insightful comments, and the valuable suggestions on the research program. We also thank Miguel Costa-Gomes, Paola Manzini, Ariel Rubinstein, the participants to the 2016 International Meeting on Experimental and Behavioral Social Sciences (Rome), the seminar audiences at the universities of Aberdeen, St Andrews and Trento and the editor of this journal. Financial support from the University of Trento’s core funding is gratefully acknowledged. Any error is our own responsibility.Peer reviewedPublisher PD

Inducing Alternative-Based and Characteristic-Based Search Procedures in Risky Choice

We would like to thank an Editor of this journal, two referees, Ramses H. Abul Naga, Santiago Sanchez-Pages, and Martin Wersing for helpful suggestions. We are grateful to the seminar audiences at the universities of Aberdeen, East Anglia, and Trento, and the participants to the Workshop on Economics of Competition, Regulation, and Consumer Protection (Glasgow), the 43rd Symposium of the Spanish Economic Association (Madrid), the 2018 ESA World Meeting (Berlin), the 2017 IAREP Conference on ‘Leveraging Behavioral Insights’ (Tel Aviv) and the 11th IMPRS Workshop on ‘Adapting Behavior in a Fundamentally Uncertain World’ (Trento) for their comments. We also thank Marco Tecilla for great computer programming and Erika Magnago for superb research assistance. Financial support from Aberdeen and Trento’s core funding is gratefully acknowledged. An earlier version of this paper was circulated under the title: ‘You Dislike Risk? Then Do Not Search By Characteristic: A Lottery-Choice Experiment’. Any error is our own responsibility. http://journal.sjdm.org/copyright.htmPeer reviewedPublisher PD

Do Losses Matter? The Effect of Information-Search Technologies on Risky Choices

Despite its importance, relatively little attention has been devoted to studying the effects of exposing individuals to digital choice interfaces. In two pre-registered lottery-choice experiments, we administer three information-search technologies that are based on well-known heuristics: in the ABS (alternative-based search) treatment, subjects explore outcomes and corresponding probabilities within lotteries; in the CBS (characteristic-based search) treatment, subjects explore outcomes and corresponding probabilities across lotteries; in the Baseline treatment, subjects view outcomes and corresponding probabilities all at once. We find that (i) when lottery outcomes comprise gains and losses (experiment 1), exposing subjects to the CBS technology systematically makes them choose safer lotteries, compared to the subjects that are exposed to the other technologies, and (ii) when lottery outcomes comprise gains only (experiment 2), the above results are reversed: exposing subjects to the CBS technology systematically makes them choose riskier lotteries. By combining the information-search and choice analysis, we offer an interpretation of our results that is based on prospect theory, whereby the information-search technology subjects are exposed to contributes to determine the level of attention that the lottery attributes receive, which in turn has an effect on the reference point

Duopolistic competition with choice-overloaded consumers

We thank Luke Froeb, Paola Manzini, Patrick Rey, Ariel Rubinstein, Yuval Salant, Rann Smorodinsky, Hugo Sonnenschein, David Ulph, Nikolaos Vettas, Rakesh Vohra, audiences at Bounded Rationality in Choice (2016, Northwestern), Bounded Rationality & Mechanism Design (2016, Glasgow), St Andrews, Technion, Athens University of Economics & Business and especially two referees of this journal for helpful comments. Any errors are our own.Peer reviewedPostprin

Oligopolistic Competition with Choice-Overloaded Consumers

A large body of empirical work has suggested the existence of a "choice overload" effect in consumer decision making: When faced with large menus of alternatives, decision makers often avoid/indefinitely defer choice. A suggested reason for the occurrence of this effect is that the agents try to escape the higher cognitive effort that is associated with making an active choice in large menus. Building on this explanation, we propose and analyse a model of duopolistic competition where firms compete in menu design in the presence of a consumer population with heterogeneous preferences and overload menu-size thresholds. The firms' strategic trade-off is between offering a large menu in order to match the preferences of as many consumers as possible, and offering a small menu in order to avoid losing choice-overloaded consumers to their rival, or driving them out of the market altogether. We study the equilibrium outcomes in this market under a variety of assumptions. We also propose a measure of consumer welfare that applies to this environment and use it alongside our model to provide a critical perspective on regulations that cap the number of products that firms can offer

Uncertainty Quantification of the Effects of Blade Damage on the Actual Energy Production of Modern Wind Turbines

Wind turbine blade deterioration issues have come to the attention of researchers and manufacturers due to the relevant impact they can have on the actual annual energy production (AEP). Research has shown how after prolonged exposure to hail, rain, insects or other abrasive particles, the outer surface of wind turbine blades deteriorates. This leads to increased surface roughness and material loss. The trailing edge (TE) of the blade is also often damaged during assembly and transportation according to industry veterans. This study aims at investigating the loss of AEP and efficiency of modern multi-MW wind turbines due to such issues using uncertainty quantification. Such an approach is justified by the stochastic and widely different environmental conditions in which wind turbines are installed. These cause uncertainties regarding the blade's conditions. To this end, the test case selected for the study is the DTU 10 MW reference wind turbine (RWT), a modern reference turbine with a rated power of 10 MW. Blade damage is modelled through shape modification of the turbine's airfoils. This is done with a purposely developed numerical tool. Lift and drag coefficients for the damaged airfoils are calculated using computational fluid dynamics. The resulting lift and drag coefficients are used in an aero-servo-elastic model of the wind turbine using NREL's code OpenFAST. An arbitrary polynomial chaos expansion method is used to estimate the probability distributions of AEP and power output of the model when blade damage is present. Average AEP losses of around 1% are predicted mainly due to leading-edge blade damage. Results show that the proposed method is able to account for the uncertainties and to give more meaningful information with respect to the simulation of a single test case