Assistant Professor of Economics

Contact

Mailing Address

Campus Box 1133
1 Brookings Drive
St. Louis, MO  63130

Office Phone

+1-314-935-9542

Email

pnatenzon@wustl.edu

Research Interests:

Economic Theory
Decision Theory
Behavioral Economics

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Publications

Random Choice and Learning.
Journal of Political Economy, Vol. 127, No. 1, (February, 2019), 419–457.

Subjective Ambiguity and Preference for Flexibility, with Leandro Gorno.
Journal of Economic Behavior & Organization, Vol. 154, (October, 2018), 24–32.

Random Choice as Behavioral Optimization, with Faruk Gul and Wolfgang Pesendorfer.
Econometrica, Vol. 82, No. 5 (September, 2014), 1873–1912.

Working Papers

Random Evolving Lotteries and Intrinsic Preference for Information

With Faruk Gul and Wolfgang Pesendorfer. Revise and Resubmit, Econometrica.

We introduce random evolving lotteries to study preference for non-instrumental information and history-dependent attitudes to risk-consumption. We provide a representation theorem for non-separable risk-consumption preferences and analyze the trade off between smooth consumption paths and hedging path risk. We characterize information seeking and its opposite, information aversion. We show how our rich set of choice objects allows nuanced attitudes to information, including a preference for savoring the prospect of positive surprises, and the dreading of news that will arrive soon.

Moderate Expected Utility

With Junnan He.

The moderate utility model represents the probability of choosing an option in a pairwise comparison as an increasing function of utility difference divided by a dissimilarity  metric. Dissimilarity captures the difficulty of comparing the options and explains several choice phenomena that cannot be addressed by utility alone. We provide a single, directly testable property that characterizes the model: choices are moderately transitive. We show that the model allows the analyst to accommodate well-known failures of strong transitivity, while retaining significantly more empirical bite than weak transitivity, achieving a useful compromise. Extending the analysis to the domain of risky choice, we introduce and characterize the moderate expected utility model, and we show how the analyst can measure utility and dissimilarity from observed choice behavior.

Preference Reversal or Limited Sampling? Maybe túngara frogs are rational after all.

Lea and Ryan (Science, Reports, 28 August 2015, p. 964) interpret mate choice data collected from frogs in the laboratory as being incompatible with rational choice models currently used in sexual selection theory. A close look at their data supports the hypothesis that some options offered in the lab are easier to compare than others. If we take into account that some pairs of options are easier to compare, and that frogs operate under conditions of uncertainty, we can restore rationality to túngara frogs.

Work in Progress

Optimal Decoys

With Carl Sanders.

A rational decision maker with imperfect information about the value of options takes their varying degrees of comparability into account in order to maximize the expected value of her choice. From the point of view of the analyst, the resulting choice behavior is context-dependent and incompatible with standard discrete choice estimation tools. We use the Bayesian probit model to measure preferences, information precision, and comparability using the context-dependent choice data from Soltani, De Martino and Camerer (2012). We provide novel comparative statics for discrete choice analysis in multi-attribute settings by relating these measurements to the observable characteristics of the options. We analyze the data for 21 subjects at the aggregate and individual levels, and provide novel welfare statements that incorporate the decision maker’s operational risk at the individual level.

Media