Papers

"Goal-Setting and Self-Control" Journal of Economic Theory, 2013, 148(2): 601-626.

Previous version with social comparison here.

Abstract.  This paper addresses the role of non-binding goals to attenuate time inconsistency. Present-biased agents
have linear reference-dependent preferences and endogenously set a goal that is the reference point. They face
an infinite horizon, optimal stopping problem in continuous time, where there exists an option value of waiting due to
uncertainty. When there is sufficient commitment to expectation-based goals, goal-setting attenuates the time-inconsistent
agent's tendency to stop too early, and may even lead an agent to wait longer than the first-best. In particular, reference
dependence is strictly worse for a time-consistent agent. Notably, none of the effects of goal-setting require any form of
loss aversion.

"Goal Setting and Energy Conservation," (with Matthew Harding), Journal of Economic Behavior & Organization, 2014, 107(0): 209-227.

Abstract.  This paper develops a theoretical model of consumer demand for an energy conservation program that involves
non-binding, self-set goals. We present evidence from a Northern Illinois goal-setting program, aimed at reducing residential
electricity consumption, that is difficult to reconcile with standard preferences and is broadly consistent with a model of
present-biased consumers with reference-dependent preferences. We find that the need for commitment is correlated with
program adoption, higher pre-adoption consumption, and lower responsiveness to goals. Consumers choosing realistic goals persistently
save substantially more, achieving savings of nearly 11%, than those choosing very low or unrealistically high goals.

"Learning Tastes Through Social Interaction," Journal of Economic Behavior & Organization, 2014, 107(0): 64-85.

Abstract.  This paper offers an information-based model of social interaction, and analyzes optimal investment
and pricing of services that facilitate interaction in a duopoly. Agents have uncertainty over their preferences but are aware
that they are correlated with others', so there exists an incentive to communicate with others in the population. When a firm's good
can be bundled with a coordination mechanism for its customers, its value is endogenously determined due to a consumption externality.
Although this mechanism increases total surplus, it is underprovided and consumer surplus decreases.

 

"Goal Bracketing and Self-Control" (February 2017, Games and Economic Behavior, conditionally accepted)

Abstract.  This paper studies the role of goal bracketing to attenuate time inconsistency. When setting non-binding goals for
a multi-stage project, an agent must also decide how and when to evaluate himself against such goals. In particular, he can
bracket narrowly by setting incremental goals for individual stages, or broadly by setting an aggregate goal for the entire project.
Narrow goal bracketing can be used as an instrument to counteract the self-control problem, while broad goal bracketing can itself
generate apparently erroneous reactions to news. In the presence of loss aversion and ex-ante outcome uncertainty, the optimal
bracketing choice involves a trade-off between motivation and risk pooling. Given the sequential nature of decision-making, time
discounting interacts non-trivially with this trade-off and generates responses to the timing of uncertainty that do not arise in a
simultaneous setting.

 

Working Papers

"Distrust in Experts and the Origins of Disagreement," (with Ing-Haw Cheng) (June 2017)

Abstract.  Disagreements about substance and expert credibility often go hand-in-hand and are hard to resolve on several issues
including economics, climate science, and medicine. We argue that disagreement arises because individuals overinterpret how
much they can learn when both substance and expert credibility are uncertain. Our proposed learning process predicts that:
1) Disagreement about credibility drives disagreement about substance, 2) First impressions of credibility drive long-lasting
disagreement, 3) Under-trust is difficult to unravel, 4) Encountering experts in different order generates disagreement, and
5) Confirmation bias and/or its opposite arise endogenously. These effects provide a theory for the origins of disagreement.

 

Work in Progress

"Persuasion in Advertising through Meaningless Claims"

"The Optimal Market Design for Green Energy Tags: A Large Scale Analysis," joint with Matthew Burda (University of Toronto)
and Matthew Harding (Duke University).