Igor Kopylov

Perfectionism and Choice

Empirical evidence suggests that perfectionism can affect choice behavior. When striving for perfection, a person can desire to keep normatively appealing options feasible even if she persistently fails to use these options later. For instance, she can “pay not to go to the gym,” as in DellaVigna and Malmendier (2006). By contrast, some perfectionists may avoid normatively important tasks for fear of negative self-evaluation of their performance. This paper models perfectionist behaviors in Gul and Pesendorfers (2001) menu framework where agents may be tempted to deviate from their long-term normative objectives. In addition to self-control costs, I identify a utility component that reflects emotional costs and benefits of perfectionism. My model is derived from axioms imposed on preferences over menus in an essentially unique way.

Subjective probabilities on "small" domains

The classic choice-theoretic construction of subjective probability (Savage, 1954) does not apply to preferences, like those in the Ellsberg Paradox, that reflect a distinction between risk and ambiguity. We formulate two representation results – one for expected utility, the other for probabilistic sophistication – that derive subjective probabilities but only on a “small” domain of risky events. Risky events can be either specified exogenously or in terms of choice behavior; in the latter case, both the values and the domain of probability are subjective. The analysis identifies a mathematical structure – called a mosaic – that is intuitive for both exogenous and behavioral specifications of risky events. This structure is weaker than an algebra or even a lambda-system.

Finite additive utility representations for preferences over menus

I characterize a finite additive utility representation for preferences over menus. The numbers of both positive and negative components in this representation are expressed explicitly in terms of preference. These expressions can be used to characterize models of temptation, perfectionism, context effects, and other phenomena.

Temptations in General Settings

I generalize Gul and Pesendorfers (2001) model of temptation to a multi-period framework where preferences are defined over menus of menus rather than over menus of terminal consumptions. This extension can be applied to model preemptive temptations, self-deception, and biased perceptions of subjective uncertainty.

Unbounded probabilistic sophistication

I extend Machina and Schmeidlers (1992) model of probabilistic sophistication to unbounded uncertain prospects (acts) and derive risk preferences over the induced probability distributions (lotteries) with unbounded support. For example, risk preferences can be derived over normal, exponential, and Poisson families of probability distributions. My extension uses a version of Arrows (1970) Monotone Continuity, which implies countable additivity for subjective beliefs and a novel property of tail-continuity for the revealed risk preferences. On the other hand, I do not assume P6 (Small Event Continuity) that is used both by Savage (1954) and Machina-Schmeidler.