Microeconomic Theory in Canada


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Canadian Economic Theory Conference
UBC Summer Workshop in Economic Theory
A website containing information about micro theory in Canada. This contains a working paper repository, linked to RePEc. Also links to the Canadian Economic Theory Conference.

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Recent Papers

  • Eliciting Risk Preferences Using Choice Lists
    Freeman, David, , david_freeman@sfu.ca
    Halevy, Yoram, , yoram.halevy@ubc.ca
    Kneeland, Terri, , t.kneeland@ucl.ac.uk
    We experimentally study the effect of embedding pairwise choices between lotteries within a choice list on measured risk attitude. Subjects choose the riskier lottery significantly more often when responding to a choice list. This failure of incentive compatibility can be rationalized by the interaction between non-expected utility and the random incentive system, as suggested by Karni and Safra (1987).
    Creation Date: 2015-06-08   Revision Date: 2015-06-08
  • Can Mechanism Designers Exploit Buyers' Market Information
    Peters, Michael, , peters@econ.ubc.ca
    It is known that mechanism designers can extract agents' information about competitors' mechanisms in a competing mechanism game. This makes it possible for sellers to punish each other for deviations even when they do not directly observe other sellers' mechanisms. This allows for very collusive equilibria. This paper is concerned with whether these collusive equilibria can be sustained in large markets when buyers either don't understand sellers mechanisms, or find it costly to convey their market information. We provide conditions under which collusive equilibria will persist in large markets and conditions under which all equilibria of the competing mechanism game will become competitive.
    Creation Date: 2015-02-24   Revision Date: 2015-02-24
  • Strotz meets Allais: Diminishing Impatience and the Certainty Effect: Reply and Corrigendum
    Chakraborty, Anujit, , anujit2006@gmail.com
    Halevy, Yoram, , yoram.halevy@ubc.ca
    Halevy (2008) establishes a relation between non-standard behaviors in the domains of risk and time. A decision maker who believes that only present consumption is certain while any future consumption is uncertain exhibits diminishing impatience if and only if her preferences on the risk domain are represented by a non-expected utility function. Contrary to previous claims (Halevy, 2008; Saito, 2011) we demonstrate that diminishing impatience does not necessarily imply the certainty effect. If diminishing impatience is invariant to the scale in which time is measured, then the severed connection between time and risk preferences can be re-established.
    Creation Date: 2015-02-07   Revision Date: 2015-02-07
  • External and Internal Consistency of Choices made in Convex Time Budgets
    Calford, Evan, , ecalford@interchange.ubc.ca
    Chakraborty, Anujit, , anujit2006@gmail.com
    Fenig, Guidon, , gfenig@mail.ubc.ca
    Halevy, Yoram, , yoram.halevy@ubc.ca
    We evaluate Andreoni and Sprenger's (2012) data on choices made from Convex Time Budgets (CTB) for external consistency with the Weak Axiom of Revealed Preference (WARP) relative to the pairwise choice benchmark, and for internal consistency with respect to demand, wealth and impatience monotonicity. We find that choices very frequently violate WARP; violations of all three internal measures of monotonicity are concentrated in subjects who take advantage of the novel feature of CTB by making interior choices. Wealth monotonicity violations are more prevalent and pronounced than either demand or impatience monotonicity violations. We believe that the frequency and magnitude of WARP and monotonicity violations found in Andreoni and Sprenger's (2012) data pose a serious challenge for interpreting choice patterns or estimated parameters through CTB as reflecting deep parameters of complete preferences.
    Creation Date: 2014-08-07   Revision Date: 2015-03-15
  • Experimental Elicitation of Ambiguity Attitude using the Random Incentive System
    Baillon, Aurélien, , baillon@ese.eur.nl
    Halevy, Yoram, , yoram.halevy@ubc.ca
    Li, Chen, , c.li@ese.eur.nl
    We demonstrate how the standard usage of the random incentive system in ambiguity experiments is not incentive compatible if the decision maker is ambiguity averse. We propose a slight modification of the procedure in which the randomization takes place before decisions are made and the state is realized and prove that if subjects evaluate the experimental environment in that way (first - risk, second - uncertainty), incentive compatibility may be restored.
    Creation Date: 2014-06-15   Revision Date: 2015-02-09