Dissertations
Tuesday, 20 September, 2022
Sergei Mikhalishchev: Essays on the Implications of Bounded Rationality to Choice
Let us invite you to the dissertation defense of Sergei Mikhalishchev which is going to take place on Tuesday, September 20th, 2022 at 11:00 online.
Link for the online connection: https://call.lifesizecloud.com/15768772 Passcode: 3199
Title of Dissertation: Essays on the Implications of Bounded Rationality to Choice
Defense Committee:
Ole Jann (CERGE-EI, Chair)
Krešimir Žigić (CERGE-EI)
Michal Franta (Czech National Bank)
Dissertation Committee:
Filip Matějka (CERGE-EI, Chair)
Jan Zápal (CERGE-EI)
Avner Shaked (University of Bonn)
Referees:
Peter Zorn (Ludwig-Maxmilians-Universität München)
Chen Lian (University of California, Berkeley)
Abstract:
In the first chapter, we introduce a new role of quotas, e.g., labor market quotas: the attentional role. We study the effects of quota implementation on the attention allocation strategy of a rationally inattentive (RI) manager. We find that quotas induce attention: a RI manager who is forced to fulfill a quota, unlike an unrestricted RI manager, never rejects minority candidates without acquiring information about them. We also demonstrate that, in our model, quotas are behaviorally equivalent to subsidies. We further analyze different goals that the social planner can achieve by implementing quotas. First, quotas can eliminate statistical discrimination, i.e., make chances of being hired independent from group identity. Second, when the hiring manager has inaccurate beliefs about the distribution of candidates’ productivities, the social planner can make the manager behave as if she has correct beliefs. Finally, we show how our results can be used to set a quota level that increases the expected value of the chosen candidates.
In the second chapter, we study the information choice of exchange-traded funds (ETF) investors, and its impact on the price efficiency of underlying stocks. First, we show that the learning of stock-specific information happens at the ETF level. Further, our results suggest that ETF investors respond endogenously to changes in the fundamental value of underlying stocks, in line with the rational inattention theory. Second, we provide evidence that ETFs facilitate propagation of idiosyncratic shocks across its constituents.
In the third chapter, I study how an optimal menu chosen by a social planner depends on whether agents receive imperfect signals about her true taste (imperfect self-knowledge) or the properties of available alternatives (imperfect information). Under imperfect self-knowledge, it is not optimal to offer fewer alternatives than the number of different tastes present in the population, unless noise is infinite (agents have no clue about their true preferences). As noise increases, the social planner would offer menu items that are closer together (more similar), in the limit only offering one choice matching the mean preference in the population. However, under imperfect information, as noise increases, the social planner prefers to restrict the number of alternatives. Whether he makes them more or less similar is non-linear in noise.
Full Text: "Essays on the Implications of Bounded Rationality to Choice"
