My research focuses on economic theory, industrial organisation and experimental economics. Particularly, I am interested in decision-theories under risk, durable goods market, horizontal and vertical product differentiations, and externalities.
Working Paper
First-order stochastic dominance, framing effects and risk preferences (experiment)
Abstract: This paper experimentally investigates whether decision-makers’ violations of the first-order stochastic dominance (FSD) criterion of rational choice, as documented in previous studies, are correlated with their risk preferences. As argued in the literature, FSD violations require framing effects to affect individual’s decisions: the frame of the lotteries in an individual’s choice set must prevent the individual from the inferiority of choosing stochastically dominated lotteries. This paper moves a step ahead by investigating whether (consistent or erratic) risk averse or risk seeking attitudes towards uncertainty make individuals more or less receptive to the framing effects which can induce FSD violations. Our main finding is that consistent (and, to a minor extent, “erratic”) risk seeking individuals are statistically significantly more prone to violate the FSD criterion in their choices than individuals exhibiting different risk attitudes (i.e., consistent risk averse and systematically inconsistent risk taking individuals). We finally control for the role of the framing effects in our results. Consistently with the previous literature, we find that the framing effects play a crucial role. As we re-frame lotteries in such a way to make the FSD superior prospects more easily distinguishable, any participants hardly violates the FSD criterion, irrespective of their risk preferences, gender and exerted cognitive abilities.
Work-in Progress papers
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Strategic delay of product upgrades (with Dr Subir Bose and Piercarlo Zanchettin)
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Unbundling complementary products in absence of network externalities
