Cornell University

Joint Microeconomic Theory Workshop and Behavioral Economics Workshop: Shengwu Li

Wednesday, November 2, 2022 4:15pm to 5:15pm

Central Campus

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Shengwu Li, Harvard University

A Theory of Ex Post Rationalization (joint w/Erik Eyster & Sarah Ridout)

Abstract:  People rationalize their past choices, even those that were mistakes in hindsight. We propose a formal theory of this behavior. The theory predicts that sunk costs affect later choices. Its model primitives are identified by choice behavior and it yields tractable comparative statics.