We characterize the optimal dynamic price policy of a monopolist who faces “viscous” demand for its services. Demand is viscous if it adjusts relatively slowly to price changes. We show that with the optimal policy the monopolist stops short of achieving 100% market penetration, even when all of the consumers have the same long-run willingness to pay for the service. Furthermore, for certain pa...

We study the ordinal content of assuming supermodularity, including conditions under which a binary relation can be represented by a supermodular function. When applied to revealed-preference relations, our results imply that supermodularity is some times not refutable: A consumer’s choices can be rationalized with a supermodular utility function if they can be rationalized with a monotonic uti...

Single-plateaued preferences generalize single-peaked preferences by allowing for multiple best elements. These preferences have played an important role in areas such as voting, strategy-proofness and matching problems. We examine the notion of singleplateauedness in a choice-theoretic setting. Single-plateaued choice is characterized by means of a collinear interval continuity property in the...

We study the optimal trading strategy of mutual funds that face both position limits and differential illiquidity. We provide explicit characterization of the optimal trading strategy and conduct an extensive analytical and numerical analysis of the optimal trading strategy. We show that the optimal trading boundaries are increasing in both the lower and the upper position limits. We find that ...

We consider the ‘‘thermodynamic limit’’ of a d-dimensional lattice of hyperbolic dynamical systems on the 2-torus, interacting via weak and nearest neighbor coupling. We prove that the SRB measure is analytic in the strength of the coupling. The proof is based on symbolic dynamics techniques that allow us to map the SRB measure into a Gibbs measure for a spin system on a (d11)-dimensional latti...

We present a model of reference dependence, which assumes that reference points affect choice by directing the decision maker’s attention towards the particular goods in the reference bundle. This model makes no assumptions about the curvature of utility, and does not assume a built-in asymmetry in gains and losses. Nonetheless it is able to generate loss aversion and can explain a large number...

This paper studies a class of multi-self decision-making models proposed in economics, psychology, and marketing. In this class, choices arise from the set-dependent aggregation of a collection of utility functions, where the aggregation procedure satisfies some simple properties. We propose a method for characterizing the extent of irrationality in a choice behavior, and use this measure to pr...

In 1963, Graham [1] proved that all integers greater than 77 (but not 77 itself) can be partitioned into distinct positive integers whose reciprocals sum to 1. He further conjectured [2, Section D11] that for any sufficiently large integer, it can be partitioned into squares of distinct positive integers whose reciprocals sum to 1. In this study, we establish the exact bound for existence of su...

In the cross-section of households, the portfolio share rises in wealth and has a non-decreasing age profile. The standard life-cycle model with homothetic utility and non-tradable labor income has the counterfactual implication that the portfolio share falls in both wealth and age. We develop a life-cycle model in which households have nonhomothetic utility over two types of consumption goods,...

Does the Internet provide a failsafe against media consolidation in the wake of an easing of media ownership rules? This paper posits a model of news outlet selection on the Internet in which consumers experience cognitive costs that increase with the number of options faced. Consistent with psychological evidence, these costs may be reduced by constraining one’s choice set to “safe bets” famil...