Essays On Economic Decision Making
| dc.contributor.author | Ozbek, Mahmut Kemal | en_US |
| dc.contributor.chair | Blume, Lawrence Edward | en_US |
| dc.contributor.coChair | Mitra, Tapan | en_US |
| dc.contributor.committeeMember | Stoye, Joerg | en_US |
| dc.contributor.committeeMember | Bodoh-Creed, Aaron | en_US |
| dc.date.accessioned | 2014-02-25T18:40:32Z | |
| dc.date.available | 2019-01-28T07:00:43Z | |
| dc.date.issued | 2014-01-27 | en_US |
| dc.description.abstract | This dissertation consists of three chapters with the common ground of economic decision making, a subject which is at the heart of Economics. In the first chapter, entitled "Decision Making with Rational Inattention", I and Maximilian Mihm study an axiomatic model of decision making with costly information processing. In this regard, we first provide a set of intuitive axioms for a decision maker's preferences over menus of acts from which she eventually makes a choice of an act. We then show that these preferences can be represented by a novel information acquisition model where choices of acts can be improved by using costly information. Our focus on preferences over menus allows us to uniquely identify the parameter's of the model from choice data: a utility function, a prior belief and an information cost function. The cost function, in particular, is compatible with the Blackwell order. Moreover, the model establishes an axiomatic foundation for the models of rational inattention which are widely applied in the literature. In the second chapter, entitled "On Representation of Monotonic Preference Orders", I and Tapan Mitra investigate the relation between scalar continuity and representability of monotone preference orders in a sequence space. Scalar continuity is shown to be sufficient for representability of a monotone preference order and easy to verify in concrete examples. Generalizing this result, we show that a condition, which restricts the extent of scalar discontinuity of a monotone preference order, ensures representability. We also relate this condition to the well-known order dense property, which is both necessary and sufficient for representability. In the third chapter, entitled "Rational Inattention and Choice of Optimal Information", I study the choice problem of a rationally inattentive decision maker modeled according to the first chapter of this dissertation. In this work, I give a characterization for optimal information choices when the cost function is linear. In addition, the characterization result is applied on a simple buyer-seller model where the buyer is rationally inattentive to the riskiness of the seller. It is found that the optimal price should be non-monotonic in the degree of the buyer's attentiveness. | en_US |
| dc.identifier.other | bibid: 8442319 | |
| dc.identifier.uri | https://hdl.handle.net/1813/36131 | |
| dc.language.iso | en_US | en_US |
| dc.subject | rational inattention | en_US |
| dc.subject | scalar continuity | en_US |
| dc.subject | linear cost | en_US |
| dc.title | Essays On Economic Decision Making | en_US |
| dc.type | dissertation or thesis | en_US |
| thesis.degree.discipline | Economics | |
| thesis.degree.grantor | Cornell University | en_US |
| thesis.degree.level | Doctor of Philosophy | |
| thesis.degree.name | Ph. D., Economics |
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