Essays on behavioural economic theory

PhDThe chapters of this work lie at the intersection between classical choice theory and experimental data on decision making. In chapter 21 study necessary and sufficient conditions for a choice function to be rationalized in the following sense: there exists a complete asymmetric relation T (a tournament) such that, for each feasible (finite) set, the choice set coincides with the uncovered set of T restricted to that feasible set. This notion of 'maximization' may offer testable restrictions on observable choice behavior. In chapter 3 Mariotti and I give a group revealed preference interpretation to the concept of uncovered set, and we provide a characterization of uncovered bargaining solutions of a Pareto-consistent tournament. In chapter 41 study the rationalizability of reason-based choice correspondences axiomatically. A reason-based choice correspondence rationalizes choice behaviour in terms of a two stage choice procedure. Given a feasible set S, the individual eliminates in the first step all of the dominated alternatives according to her fixed (not necessarily complete) strict preference relation. In the second step, she first constructs for each maximal alternative identified in the first step its lower contour set, and then she eliminates from the maximal set all of those alternatives so that the following justification holds: there exists another maximal alternative whose lower contour set strictly contains that of another maximal alternative. This procedural model captures the basic idea behind the experimental finding known as "attraction effect". Finally, in chapter 51 build a connection between the behavioral property expressed by the weak axiom of revealed non-inferiority and a new weak notion of rationality. This notion is weaker than that characterized by the weak axiom of revealed preference (WARP)

Axiomatic Analysis of Legal/Institutional Issues

Abstract of Introductory Essay An essay defines and explores the strengths and limits of the Axiomatic Analysis of Legal/Institutional Issues, and then derives guidelines for the use of axiomatic work in papers prescribing policies. Abstract of Chapter I Given certain fundamental assumptions, it is possible to engage in economic analysis of costly interactions between the government and individuals. Such an analysis must necessarily focus upon a potential rule's effect on governmental behavior. Various models of governmental behavior are either borrowed or developed, and these models are then independently analyzed, Economic efficiency suggests that a particular immunity rule should be adopted with regard to certain models. In the case of other models, however, rigorous economic analysis is impossible; in such cases, suability is chosen over immunity on the basis of fairness and comparative utility. Based upon this analysis, three potential governmental immunity rules are formulated, and, based largely on considerations of administrative costs and fairness, the indicated rule is that the government should be suable in tort for monetary damages. Abstract of Chapter II The limitations of Multicriteria Choice Processes are analyzed by examining the Federal Communications Commission's initial broadcast license comparative hearings. A possibility theorem, developed especially for comparative hearings, shows that the FCC must use an illegal process. This fundamental problem helps to explain previous criticisms of the comparative hearings' practical defects and to separate sufficiently effective reform suggestions from ineffective proposals.</p

Vers des modes de scrutin moins manipulables

We study coalitional manipulation of voting systems: can a subset of voters, by voting strategically, elect a candidate they all prefer to the candidate who would have won if all voters had voted truthfully? From a theoretical point of view, we develop a formalism which makes it possible to study all voting systems, whether the ballots are orders of preference on the candidates (ordinal systems), ratings or approval values (cardinal systems), or even more general objects. We show that for almost all classical voting systems, their manipulability can be strictly reduced by adding a preliminary test aiming to elect the Condorcet winner if there is one. For the other voting systems, we define the generalized Condorcification which leads to similar results. Then we define the notion of decomposable culture, an assumption of which the probabilistic independence of voters is a special case. Under this assumption, we prove that, for each voting system, there exists a voting system which is ordinal, shares certain properties with the original voting system, and is at most as manipulable. Thus, the search for a voting system of minimal manipulability (in a class of reasonable systems) can be restricted to those which are ordinal and satisfy the Condorcet criterion. In order to allow everyone to examine these phenomena in practice, we present SVVAMP, a Python package of our own dedicated to the study of voting systems and their manipulability. Then we use it to compare the coalitional manipulability of various voting systems in several types of cultures, i.e. probabilistic models that generate populations of voters equipped with random preferences. We then complete the analysis with elections from real experiments. Finally, we determine the voting systems with minimal manipulability for very low values of the number of voters and of the number of candidates, and we compare them with the classical voting systems of the literature. In general, we establish that Borda's method, Range voting, and Approval voting are particularly manipulable. Conversely, we show the excellent resistance to manipulation of the system called IRV, also known as STV, and of its variant Condorcet-IRV.Nous étudions la manipulation par coalition des modes de scrutin: est-ce qu'un sous-ensemble des électeurs, en votant de façon stratégique, peut faire élire un candidat qu'ils préfèrent tous au candidat qui aurait été vainqueur si tous les électeurs avaient voté sincèrement? D'un point de vue théorique, nous développons un formalisme qui permet d'étudier tous les modes de scrutin, que les bulletins soient des ordres de préférences sur les candidats (systèmes ordinaux), des notes ou des valeurs d'approbation (systèmes cardinaux) ou des objets encore plus généraux. Nous montrons que pour la quasi-totalité des modes de scrutin classiques, on peut réduire strictement leur manipulabilité en ajoutant un test préliminaire visant à élire le vainqueur de Condorcet s'il en existe un. Pour les autres modes de scrutin, nous définissons la condorcification généralisée qui permet d'obtenir des résultats similaires. Puis nous définissons la notion de culture décomposable, une hypothèse dont l'indépendance probabiliste des électeurs est un cas particulier. Sous cette hypothèse, nous prouvons que, pour tout mode de scrutin, il existe un mode de scrutin qui est ordinal, qui partage certaines propriétés avec le mode de scrutin original et qui est au plus aussi manipulable. Ainsi, la recherche d'un mode de scrutin de manipulabilité minimale (dans une classe de systèmes raisonnables) peut être restreinte à ceux qui sont ordinaux et vérifient le critère de Condorcet. Afin de permettre à tous d'examiner ces phénomènes en pratique, nous présentons SVVAMP, un package Python de notre cru dédié à l'étude des modes de scrutin et de leur manipulabilité. Puis nous l'utilisons pour comparer la manipulabilité par coalition de divers modes de scrutin dans plusieurs types de cultures, c'est-à-dire des modèles probabilistes permettant de générer des populations d'électeurs munis de préférences aléatoires. Nous complétons ensuite l'analyse avec des élections issues d'expériences réelles. Enfin, nous déterminons les modes de scrutin de manipulabilité minimale pour de très faibles valeurs du nombre d'électeurs et du nombre de candidats et nous les comparons avec les modes de scrutin classiques. De manière générale, nous établissons que la méthode de Borda, le vote par notation et le vote par assentiment sont particulièrement manipulables. À l'inverse, nous montrons l'excellente résistance à la manipulation du système appelé VTI, également connu par son acronyme anglophone STV ou IRV, et de sa variante Condorcet-VTI

Monte Carlo experiments of market demand theory

This study investigated the present theory for market demand and discussed the limitations and restrictions of theory from an empirical perspective. The objective of the study was to set up a Monte Carlo model to analyze the relationship between consumer demand and market demand and investigate the market approximation characteristics in light of aggregation conditions. Assuming that income and prices follow lognormal distributions individual optimal allocations were computed and aggregated to market data. Then various market demand systems were applied and approximation characteristics were studied in terms of bias and variance of elasticities. The analyses were carried in several experiments based on different individual demand systems under various assumptions of distributions of income and prices;The results indicated that bias in elasticities may be considerable. The numerical exercises also indicated that rejection rate of Slutsky restrictions increased as the assumption of constant variance of distribution of income and prices was relaxed;Quadratic response surfaces for bias as percent of true elasticities and variance of Slutsky restrictions were also fitted based on experiments following a Central Composite design;The design factors included some of the individual demand coefficients and variance of income and price distributions. The fitted quadratic response surfaces for bias in elasticities indicated that the design factors were not important. On the other hand, the response surfaces fitted for variance of Slutsky restrictions indicated that the design factors were important