Research

An Axiomatic Model for Cognitive Dissonance

I propose an intrapersonal game to model decision-makers (DMs) who distort beliefs to alleviate cognitive dissonance from past choices. Two players make observable decisions sequentially, with another player optimally manipulating the belief in an interim stage between them. The subgame perfect Nash equilibria are characterized by both tractable closed-form solutions and a set of axioms governing decision-making. My model aligns with experimental and real-world evidence. As an application, I show how cognitive dissonance exacerbates decision distortions among the poor, creating a "cognitive tax" on poverty. In another application, a monopolist exploits dissonance by using an optimal upselling strategy that offers add-ons after the initial purchase. Allowing the monopolist to use this strategy increases profits while also improving consumer welfare. 

(Non)-Commutative Aggregation (R&R at Theoretical Economics)

Commutativity is a normative criterion of aggregation and updating stating that the aggregation of expert posteriors should be identical to the update of the aggregated priors. I propose a thought experiment that raises questions about the normative appeal of Commutativity. I propose a weakened version of Commutativity and show how that assumption plays central roles in the characterization of linear belief aggregation, multiple-weight aggregation, and an aggregation rule which can be viewed as the outcome of a game played by “dual-selves,” Pessimism and Optimism. Under suitable conditions, I establish equivalences between various relaxations of Commutativity and classic axioms for decision-making under uncertainty, including Independence, C-Independence, and Ambiguity Aversion.