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econ.TH2023
Wishful Thinking is Risky Thinking
Jarrod Burgh, Emerson Melo
We develop a model of wishful thinking that incorporates the costs and benefits of biased beliefs. We establish the connection between distorted beliefs and risk, revealing how wis…
econ.TH2023
A Distributionally Robust Random Utility Model
David Müller, Emerson Melo, Ruben Schlotter
This paper introduces the distributionally robust random utility model (DRO-RUM), which allows the preference shock (unobserved heterogeneity) distribution to be misspecified or un…