题    目：A Theory  of Choice Bracketing under Risk

嘉   宾：Mu Zhang, Assistant Professor, University of Michigan

主持人：Xi Zhi Lim, 助理教授，上海交通大学安泰经济与管理学院

时   间：2022年11月2日（周三）10:00-11:30

地   点：Zoom会议（校内师生如需会议号和密码，请发邮件至yueqiwang@sjtu.edu.cn获取）

内容简介：

In this  paper, we study two heuristics, narrow bracketing and correlation neglect,  that decision makers adopt to simplify the evaluation of risk from multiple  sources and axiomatize them as behavioral deviations from the expected utility  benchmark by relaxing the independence axiom. Our axiomatization reveals  decision rules that (i) allow for narrow bracketing or correlation neglect or  both and (ii) allow for different levels of narrow bracketing. We interpret  the different sources as different streams of income to explain experimental  evidence on violations of first order stochastic dominance. We propose a  rationality ranking of decision makers based on their tendency to violate  first order stochastic dominance and rank our models accordingly. Then, we  interpret one source as background risk and show that narrow bracketing can  explain risk aversion over small gambles. Finally, we interpret the different  sources as consumption in different periods to explore the implications of  narrow bracketing and correlation neglect on the optimal saving behavior. We  also show that an Epstein-Zin type utility function can emerge because of  narrow bracketing. This new utility function achieves separation between time  and risk preferences without inducing an implausibly high early resolution  premium as observed by Epstein, Farhi, and Strzalecki (2014).

演讲人简介：

Mu Zhang is  an assistant professor of economics in University of Michigan. He received his  BA in Economics and B.Sc. in Mathematics from Tsinghua University in 2016, and  his PhD in Economics from Princeton University in 2022. He is a microeconomic  theorist. His research focuses on decision theory and behavioral economics.

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