ran spiegler - Academia.edu (original) (raw)

Papers by ran spiegler

European Economic Review, 2021

We study a two-action, two-state pure persuasion game in which the receiver has non-rational expe... more We study a two-action, two-state pure persuasion game in which the receiver has non-rational expectations. The sender can add ambiguity to his message by pooling it with other messages. This can be likened to selective redaction of the original message. The receiver knows the sender's message strategy but not his redaction strategy, and uses only the former to draw inferences from the redacted message. We characterize the highest probability of persuasion attainable by the sender under these conditions.

American Economic Review: Insights, 2021

Beliefs and decisions are often based on confronting models with data. What is the largest “fake”... more Beliefs and decisions are often based on confronting models with data. What is the largest “fake” correlation that a misspecified model can generate, even when it passes an elementary misspecification test? We study an “analyst” who fits a model, represented by a directed acyclic graph, to an objective (multivariate) Gaussian distribution. We characterize the maximal estimated pairwise correlation for generic Gaussian objective distributions, subject to the constraint that the estimated model preserves the marginal distribution of any individual variable. As the number of model variables grows, the estimated correlation can become arbitrarily close to one regardless of the objective correlation. (JEL D83, C13, C46, C51)

Political Methods: Quantitative Methods eJournal, 2022

We study a model in which a "statistician" takes an action on behalf of an agent, based... more We study a model in which a "statistician" takes an action on behalf of an agent, based on a random sample involving other people. The statistician follows a penalized regression procedure: the action that he takes is the dependent variable's estimated value given the agent's disclosed personal characteristics. We ask the following question: Is truth-telling an optimal disclosure strategy for the agent, given the statistician's procedure? We discuss possible implications of our exercise for the growing reliance on "machine learning" methods that involve explicit variable selection.

Games & Political Behavior eJournal, 2018

I enrich the typology of players in the standard model of games with incomplete information, by a... more I enrich the typology of players in the standard model of games with incomplete information, by allowing them to have incomplete "archival information" - namely, piecemeal knowledge of correlations among relevant variables. A player is characterized by the conventional Harsanyi type (a.k.a "news-information") as well as the novel "archive-information", formalized as a collection of subsets of variables. The player can only learn the marginal distributions over these subsets of variables. The player extrapolates a well-specified probabilistic belief according to the maximum-entropy criterion. This formalism expands our ability to capture strategic situations with "boundedly rational expectations." I demonstrate the expressive power and use of this formalism with some examples.

A decision maker (DM) tries to learn an objective joint probability distribution  over  variabl... more A decision maker (DM) tries to learn an objective joint probability distribution  over  variables. He gathers many independent observations with (randomly, independently generated) missing values. The DM wishes to extend his incomplete observations into a fully specified, "rectangular" dataset. He employs an iterative imputation procedure, whose individual rounds are akin to the "random regression" method in the literature on statistical inference with missing data. The frequencies in the completed dadaset constitute the DM’s subjective belief. When the support of the missing-values process satisfies the "running intersection property", the procedure produces a belief with a Bayesian-network representation, which factorizes  according to a perfect directed acyclic graph. The result provides a limitedfeedback foundation for various models of non-rational expectations. It is also related to the so-called MaxEnt problem. ∗This paper has benefitted from ...

American Economic Review, 2020

We formalize the argument that political disagreements can be traced to a “clash of narratives.” ... more We formalize the argument that political disagreements can be traced to a “clash of narratives.” Drawing on the “Bayesian Networks” literature, we represent a narrative by a causal model that maps actions into consequences, weaving a selection of other random variables into the story. Narratives generate beliefs by interpreting long-run correlations between these variables. An equilibrium is defined as a probability distribution over narrative-policy pairs that maximize a representative agent's anticipatory utility, capturing the idea that people are drawn to hopeful narratives. Our equilibrium analysis sheds light on the structure of prevailing narratives, the variables they involve, the policies they sustain, and their contribution to political polarization. (JEL D72, D83, D85, F52)

American Economic Journal: Microeconomics, 2019

Behavioral economics is widely perceived to be part of the profession’s shift away from a culture... more Behavioral economics is widely perceived to be part of the profession’s shift away from a culture that places abstract theory at its center. I present a critical discussion of the atheoretical style with which “behavioral” themes are often disseminated: a purely anecdotal cost-benefit modeling in pieces that target a wide audience of academic economists, and the practice of capturing psychological forces by distorting familiar functional forms. I argue that the subject of “ psychology and economics” is intrinsically foundational, and that a heavier dose of abstract theorizing is essential for it to realize its transformative potential. (JEL B40, D90)

We incorporate reference-dependent worker behavior into a search-matching model of the labor mark... more We incorporate reference-dependent worker behavior into a search-matching model of the labor market, in which firms have all the bargaining power and productivity follows a log-linear AR(1) process. Motivated by Akerlof (1982) and Bewley (1999), we assume that existing workers' output falls stochastically from its normal level when their wage falls below a "reference point", which (following Kőszegi and Rabin (2006)) is equal to their lagged-expected wage. We formulate the model game-theoretically and show that it has a unique subgame perfect equilibrium that exhibits the following properties: existing workers experience downward wage rigidity, as well as destruction of output following negative shocks due to layoffs or loss of morale; newly hired workers earn relatively flexible wages, but not as much as in the benchmark without reference dependence; market tightness is more volatile than under this benchmark. We relate these findings to the debate over the "Shimer puzzle" (Shimer (2005)).

When two parties have different prior beliefs about some future event, they can real- ize gains t... more When two parties have different prior beliefs about some future event, they can real- ize gains through speculative trade. Can these gains be realized when the parties' prior beliefs are not common knowledge? We examine a simple example in which two par- ties having heterogeneous prior beliefs, independently drawn from some distribution, bet on what future action one of them will choose. We define a notion of "constrained interim-efficient" best and ask whether they can be implemented in Bayesian equilib- rium by some mechanism. Our main result establishes that as the costs of unilaterally manipulating the bet's outcome become more symmetric across states, implementation becomes easier. In particular, when these costs are equal in both states, implementation is possible for any distribution.

This paper proposes a procedurally rational solution concept for two-person extensive-form games ... more This paper proposes a procedurally rational solution concept for two-person extensive-form games with complete information. The solution concept is based on the observation that the ex-post justifiability of choices is often a primary concern for decision-makers, especially in organizations. The essential departure from standard rationality lies in the assumption that players have to consider not only the optimality of their strategy, but also the reasonableness of the beliefs that support it. Specifically, they face ex-post criticism, which consists of a (deterministic) theory of the opponent's strategy as well as an alternative recommended strategy. The theory must be consistent with the history and there can be no consistent theory that is simpler. The alternative strategy must do better than the player's strategy against the theory.

I study a market model in which profit-maximizing firms compete in multi-dimensional pricing stra... more I study a market model in which profit-maximizing firms compete in multi-dimensional pricing strategies over a consumer, who is limited in his ability to grasp such complicated objects and therefore uses a sampling procedure to evaluate them. Firms respond to increased competition with an increased effort to obfuscate, rather than with more competitive pricing. As a result, consumer welfare is not enhanced and may even deteriorate. Specifically, when firms control both the price and the quality of each dimension, and there are diminishing returns to quality, increased competition implies an efficiency loss which is entirely borne by consumers.

Review of Economic Studies, 2006

The Review of Economic Studies, 2011

We study a market model in which competing …rms use costly marketing devices to in ‡uence the set... more We study a market model in which competing …rms use costly marketing devices to in ‡uence the set of alternatives that boundedly rational consumers perceive as relevant. Consumers in our model apply well-de…ned preferences to a "consideration set", which is a subset of the feasible set and subject to manipulation by …rms. We examine the implications of this behavioral model on otherwise competitive markets. In our model, the market equilibrium outcome is not competitive, yet …rms earn competitive payo¤s because the strategic use of costly marketing devices wears o¤ the collusive impact of consumers'bounded rationality. Equilibrium behavior satis…es an "e¤ective marketing property": if a consumer considers a …rm only because of a marketing device it employs, he ends up buying from that …rm.

The Review of Economic Studies, 2006

The Quarterly Journal of Economics, 2012

This paper studies market competition when firms can influence consumers' ability to compare mark... more This paper studies market competition when firms can influence consumers' ability to compare market alternatives, through their choice of price "formats". We introduce random graphs as a tool for modeling limited comparability of formats. Our main results concern the interaction between firms' equilibrium price and format decisions and its implications for industry profits and consumer switching rates. In particular, firms earn max-min payoffs in symmetric equilibria if and only if the graph that represents the comparability between formats satisfies a generalized regularity property, which we interpret as a form of "frame neutrality". The same property is necessary for equilibrium behavior to display statistical independence between price and format decisions. We also show that narrow regulatory interventions that aim to facilitate comparisons may have an anti-competitive effect.

The Economic Journal, 2011

We present a simple model of how a monopolistic search engine optimally determines the average re... more We present a simple model of how a monopolistic search engine optimally determines the average relevance of firms in its search pool. In our model, there is a continuum of consumers, who use the search engine's pool, and there is a continuum of firms, whose entry to the pool is restricted by a price-per-click set by the search engine. We show that a monopolistic search engine may have an incentive to set a relatively low price-per-click that encouarges low-relevance advertisers to enter the search pool. In general, the ratio between the marginal and average relevance in the search pool induced by the search engine's policy is equal to the ratio between the search engine's profit per consumer and the equilibrium product price. These conclusions do not change if the search engine charges fixed access fee rather than a price-per-click.

The Economic Journal, 2008

A simple model is presented, in which contradictory instructions are viewed as a type of contract... more A simple model is presented, in which contradictory instructions are viewed as a type of contract incompleteness. The model provides a complexity-based rationale for contradictory instructions. If there are complexity bounds on the contract, there may be an incentive to introduce contradictions, leaving for another agent the task of interpreting them. The optimal amount of contradictions depends on the complexity bound, the con ‡ict of interests with the interpreter, and the institutional constraints on his interpretations. In particular, a higher complexity bound may result in a larger amount of contradictions. We are grateful to an editor and a referee for useful comments.

Social Choice and Welfare, 2006

An axiomatic modeling approach to multi-issue debates is proposed. A debate is viewed as a decisi... more An axiomatic modeling approach to multi-issue debates is proposed. A debate is viewed as a decision procedure consisting of two stages: (1) an "argumentation rule" determines what arguments are admissible for each party, given the "raw data", depending on the issue or set of issues under discussion; (2) a "persuasion rule" determines the strength of the admissible arguments and selects the winning party. Persuasion rules are characterized for various alternative specifications of the argumentation rule. These characterizations capture rhetorical effects that we sometimes encounter in real-life multi-issue debates.