Description: Job Market Talk: Eseul Choi
Location: 368A Heady Hall
Title: "Dynamic Production Decisions under Reference Dependent Preference"
Abstract: (*Provisional) This paper studies agricultural production behavior of a reference-dependent loss averse agent in contrast to the behavior of risk neutral and averse agent. I propose a recursive model for sequential input choices under uncertainty. Some inputs are chosen before realization of a shock and others are decided after observing the shock. Such a sequence of choices and shock is in favor of uncertainty, predicting over-use of inputs than a standard single-stage decision model does. In comparison of three preferences, loss averse agent responses to the moderate shock in opposite direction to ones of agents with other preferences. He employs more inputs against the negative shock while risk neutral or averse agent reduces input use. These predictions are tested by using the Nigerian Household Survey 2012-13 and 2015-16.
Contact person: Otavio Bartalotti