Working Papers
Distributional Approach to Risk Preferences [New Paper]
with N. Chemaya, C. Johnson, E. Yeung, G. Charness
Abstract. We propose a distributional framework for eliciting risk preferences that treats an individual's attitude towards risk as a complete probability distribution rather than a point estimate. By parameterizing preferences with the flexible beta family, our approach encompasses the entire spectrum from extreme risk aversion to risk neutrality and even risk-seeking behavior, while simultaneously allowing for heterogeneous stability of those attitudes across contexts. Our agent-based simulations show that (i) the true underlying preference distribution is recoverable with negligible bias, and (ii) the precision of recovery is a systematic function of the elicitation design richness, providing clear guidance for experimental design. Benchmarking on the comprehensive laboratory dataset of Holzmeister & Schmidt (2021) confirms two central results: (1) the out-of-sample predictive accuracy is at least on par with the canonical point estimation methods, and (2) our method delivers a second, policy-relevant moment, the subject-specific variance of risk taking, without sacrificing parsimony.
Two-Ball Ellsberg Paradox [New Update]
with S. Lazarus
[pre-print] [CESifo No. 10745]
Abstract. We introduce a novel experimental framework, the two-ball Ellsberg gamble, which allows us to explore a wider range of possible drivers of ambiguity attitudes than usually considered by the literature. In an incentivized experiment on a representative sample from the US with 708 participants, we find that 55 % of the subjects prefer avoiding ambiguity even when it means choosing dominated risky options -- what we call the Two-Ball Ellsberg Paradox. This aversion to mere exposure to ambiguity violates the monotonicity axiom of most current ambiguity models. In a series of treatments, we establish that the primary drivers of these behaviors are an aversion to complexity generated by the presence of ambiguity. Such a complexity aversion explains about 43% of the variations in the two-ball Ellsberg and 38% of the variations in the original Ellsberg paradox. We further explore the possible different cognitive foundations underlying such a result. Participants who are more likely to display the Two-Ball Ellsberg Paradox are also more likely to perceive the setting as complex.
Critical Thinking and Storytelling Contexts
with E. Sartori
[pre-print] [CESifo No. 11282]
Abstract. We argue that storytelling contexts – the way information is communicated through varying credibility sources, visual designs, writing styles, and content delivery – impact the effectiveness of surveys and elections in eliciting preferences formed through critical thinking (reasoned preferences). Through an artefactual field experiment with a US sample (N = 725), incentivized by an LLM, we find that intermediate storytelling contexts prompt critical thinking more effectively than basic or sophisticated ones. Sensitivity to these contexts is linked to individual cognitive traits, and participants with a high need for cognition are particularly responsive to intermediate contexts. In a conceptual framework, we explore how critical thinkers impact the efficiency of elections and polls in aggregating reasoned preferences. Storytelling contexts that effectively prompt critical thinking improve election efficiency. However, the indecisiveness of critical thinkers can have ambiguous effects on election bias, potentially posing challenges for principals who are required to act on these election outcomes.
Doctoral Theses
PhD Thesis in Economics, Paris School of Economics, 2023
Online Manuscript: [pre-print]
Citation APA: Jabarian, B. (2023). The Economics of Moral Uncertainty: Essays in Behavioral and Experimental Economics (Doctoral dissertation, Université Panthéon-Sorbonne-Paris I).
Title: The Economics of Moral Uncertainty
Committee: Jean-Marc Tallon (Supervisor), Roland Bénabou (Chair), Leeat Yariv, Mohammed Abdelaoui, Nicolas Jacquemet
Abstract: This thesis, rooted in experimental economics, political behavioral economics, and macroeconomic behavioral economics, tackles diverse topics concerning the decision-making processes of economic agents. In the first chapter, we conduct an incentivized experiment on a nationally representative US sample (N=708) to test whether people prefer to avoid ambiguity even when it means choosing dominated options. In contrast to the literature, we find that 55% of subjects prefer a risky act to an ambiguous act that always provides a larger probability of winning. Our experimental design shows that such a preference is not mainly due to a lack of understanding. We conclude that subjects avoid ambiguity per se rather than avoiding ambiguity because it may yield a worse outcome. Such behavior cannot be reconciled with existing models of ambiguity aversion straightforwardly. In the second chapter, in an incentivized online social media experiment (N = 706), we show that different digital storytelling formats – different visual designs and writing styles to present the same set of facts – affect the intensity at which individuals become critical thinkers. Intermediate-length designs (Facebook posts) are most effective at triggering individuals into critical thinking. Individuals with a high need for cognition mostly drive the differential effects of the treatments. We further explore the implications of such results for the welfare and political economy. Particularly, we establish that increasing the share of critical thinkers – individuals who are aware of the ambivalent nature of a certain issue – in the population increases the efficiency of surveys (elections) but might increase surveys’ bias. In the third chapter, we present a novel climate-macroeconomic model, Nested Inequalities Climate-Economy with Risk, and Inequality Uncertainty (NICERIU). We also introduce a social welfare function, the Worldview-Inclusive Welfare. This latter incorporates heterogeneous worldviews regarding welfare and uncertainty about inequality, proposing redistributive economic policies based on equality-distributed equivalence and a novel axiom of minimal comparability of worldviews. NICERIU has been calibrated using a representative sample from the US population (N=500), and the calibration outcomes reveal intriguing insights. With symmetrically weighted distinct world-views, the optimal taxation policy closely approximates conservatively the taxation policy based on a particular worldview but differs in specific ways. In summary, this thesis explores various often overlooked aspects within traditional approaches to economics. It challenges models of ambiguity aversion, highlights the impact of narrative formats on critical thinking, and proposes a climate-economic model that incorporates uncertainty about inequality. The obtained results call for profound reflection and underscore the importance of integrating diverse aspects of decision-making processes into economic analyses.
PhD Thesis in Philosophy, Department of Philosophy, University Panthéon-Sorbonne Paris 1, 2023
Online Manuscript: [pre-print]
Citation APA: Jabarian, B. (2023). Operationalizing moral uncertainty: a framework for critical thinking in an uncertain world (Doctoral dissertation, Université Panthéon-Sorbonne-Paris I).
Title: Operationalizing Moral Uncertainty
Committee: Laurent Jaffro (primary supervisor), Franz Dietrich (co-supervisor), Marc Fleurbaey (Chair), Pierre Livet, Richard Bradley, Katie Steele
Abstract: This Ph.D. in philosophy explores the normative uncertainty problem, i.e., the complex ethical problem of what we should do when uncertain about what we should do. We conduct our thesis in the tradition of the long-forgotten philosophy of science of operationalization. The latter is a thorough analytical approach that allows for applied investigations of a concept whose empirical implications are neither proven nor clear. In the case of an ethical evaluation or choice problem, operationalization includes two main dimensions: (1) providing a framework for reasoning, comparing the values of options, and decision-making by individuals or groups; (2) providing empirical evidence to demonstrate the concept’s relevance for applied research and further scientific investigations. We divide our thesis into two main parts based on these dimensions. A preceding introduction addresses normative uncertainty and its relations to other ethical and meta-ethical concepts. Part I provides a comprehensive framework for comparing the values of options, reasoning, and making individual decisions under normative uncertainty, depending on the types and amount of information available to the decision-maker. Part II demonstrates how we may employ the humanities in survey methods and establish normative uncertainty as an empirical fact by combining both disciplines. The conclusion summarizes our thesis’s main contributions.