Marciano, D., Sehtman-Shachar, S., Choshen-Hillel, S., & Perry, A. . (Forthcoming).
How agency shapes social preferences: Using mouse-tracking to reveal changes in cognitive conflict
. Retrieved from
Publisher's VersionInequity aversion is a fundamental social preference. Concern for others’ welfare is yet another fundamental social preference. What do people prefer when maximizing others’ welfare creates an inequality that disadvantages them? Prior research has shown that people’s preferences depend on their level of agency, that is, their control over the allocation. Behaviorally, agentic decision makers have been shown to be more likely to prefer allocations that give another person more than them, compared to non-agentic ones. However, the cognitive processes underlying this shift of preference remain unclear. Here, we used mouse-tracking and reaction times to investigate how agency shapes social preferences in such cases. We examined decision conflict, the level of conflict experienced in arriving at a given choice, as a way to uncover whether different underlying social preferences are at play when one has versus does not have agency. We predicted an interaction effect of agency and choice on conflict, where choosing the prosocial option would be associated with less conflict in the Agency condition compared to the No-Agency condition, and that the opposite would be true for the equitable option. In our task, on each of trial, participants were presented with two allocation options: an equitable option (eg, 50 cents for self, 50 cents for other) and an inequitable and prosocial option, favoring the other participant over oneself (eg, 50 cents for self, 70 cents for other). Agentic participants chose one option to be implemented, whereas non-agentic participants indicated their preference, knowing that the lab manager had already made the decision. In two studies (N= 586), including a preregistered one, an interaction effect emerged in both mouse trajectory and reaction time analyses. These results suggest that agency alters social preferences during the decision-making process, and challenge traditional inequity aversion models claiming that people inherently dislike inequitable outcomes. Granting agency may be a powerful tool for maximizing social welfare in situations where equity and prosocial behavior are at odds.
Babaioff, M., & Nisan, N. . (Forthcoming).
On the Optimality of EIP-1559 for Patient Bidders (Draft - Comments Welcome)
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Publisher's VersionThe “EIP-1599 algorithm” is used by the Ethereum blockchain to assemble transactions into blocks. While prior work has studied it under the assumption that bidders are “impatient”, we analyze it under the assumption that bidders are “patient”, which better corresponds to the fact that unscheduled transactions remain in the mempool and can be scheduled at a later time. We show that with “patient” bidders, this algorithm produces schedules of near-optimal welfare, provided it is given a mild resource augmentation (that does not increase with the time horizon). We prove some generalizations of the basic theorem, establish lower bounds that rule out several candidate improvements and extensions, and propose several questions for future work.
Foster, D. P., & Hart, S. . (Forthcoming).
Large Deviations Inequalities for Unequal Probability Sampling Without Replacement.
arXiv preprint. Retrieved from
Publisher's VersionWe provide bounds on the tail probabilities for simple procedures that generate random samples without replacement, when the probabilities of being selected need not be equal.
Branzei, S., Mehta, R., & Nisan, N. . (Forthcoming).
Tit-for-Tat Strategies Drive Growth and Inequality in Production Economies
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Proceedings of the Royal Society A: Mathematical, Physical, and Engineering Sciences. Retrieved from
Publisher's VersionIncreasing inequality in free-market economies worldwide undermines stability, fueling extremism and crime. We consider an abstract model of an expanding economy with connected agents, which captures the circularity and dynamism of real economies. The agents, acting as producers, continuously produce and trade goods, while adjusting their strategies for investing in these goods based on past performance. This adjustment process is based on tit-fortat responses to mirror the market behaviors of others. We show this model captures central phenomena observed in real-life markets such as growth, inequality, and free-riding. Specifically, we find that the economy grows whenever growth is feasible within the parameters of the model. However, growth is accompanied by rising inequality, with rich and poor agents emerging and the gaps between their fortunes expanding over time.
Manski, C. F., & Sheshinski, E. . (Forthcoming).
The Subtlety of Optimal Paternalism in a Population with Bounded Rationality
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arXiv preprint. Retrieved from
Publisher's VersionWe consider a utilitarian planner with the power to design a discrete choice set for a heterogeneous population with bounded rationality. We find that optimal paternalism is subtle. The policy that most effectively constrains or influences choices depends on the preference distribution of the population and on the choice probabilities conditional on preferences that measure the suboptimality of behavior. We first consider the planning problem in abstraction. We next examine policy choice when individuals measure utility with additive random error and maximize mismeasured rather than actual utility. We then analyze a class of problems of binary treatment choice under uncertainty. Here we suppose that a planner can mandate a treatment conditional on publicly observed personal covariates or can decentralize decision making, enabling persons to choose their own treatments. Bounded rationality may take the form of deviations between subjective personal beliefs and objective probabilities of uncertain outcomes. We apply our analysis to clinical decision making in medicine. Having documented that optimization of paternalism requires the planner to possess extensive knowledge that is rarely available, we address the difficult problem of paternalistic policy choice when the planner is boundedly rational.