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Lukas Bolte
Job Market Candidate
Stanford University
Department of Economics
579 Jane Stanford Way
Stanford, CA 94305
lbolte@stanford.edu
I will be on the job market during the 2022-2023 academic year.
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Job Market Paper
Emotional Inattention
(with Collin B. Raymond)
We propose a framework where a decision-maker allocates attention across payoff-dimensions which can be different dimensions of consumption, realizations of an unknown state, or time periods. Attention has two features: (1) it is instrumentally valuable by allowing the decision-maker to take actions, and (2) it leads to an emotional response, which is proportional to the attention devoted to a dimension and the associated payoff. The framework provides a unifying explanation for a number of behavioral phenomena. We discuss implications for policy interventions designed to increase overall utility or improve decisions.
Working Papers
Robust contracting under double moral hazard
(with Gabriel D. Carroll)
Accepted at Theoretical Economics
We study contracting when both principal and agent have to exert noncontractible effort for production to take place. An analyst is uncertain about what actions are available and evaluates a contract by the expected payoffs it guarantees to each party in spite of the surrounding uncertainty. Both parties are risk-neutral; there is no limited liability. Linear contracts, which leave the agent with a constant share of output in exchange for a fixed fee, are optimal. This result holds both in a preliminary version of the model, where the principal only chooses to supply or not supply an input, and in several variants of a more general version, where the principal may have multiple choices of input. The model thus generates nontrivial linear sharing rules without relying on either limited liability or risk aversion.
Motivated Mislearning: The Case of Correlation Neglect
(with Tony Q. Fan)
Revise & Resubmit at the Journal of Economic Behavior and Organization
We design an experiment to study the role of motivated reasoning in correlation neglect. Participants receive potentially redundant signals about an ego-relevant state---their IQ test performance. We elicit their belief that the signals came from the same source (and thus contain redundant information). Participants generally underappreciate the extent to which identical signals are more likely to come from the same source, but the bias is significantly stronger for good (ego-favorable) signals than for bad (ego-unfavorable) signals. This asymmetric effect disappears in a control treatment where the state is ego-irrelevant. These results suggest that individuals may neglect the correlation between desirable signals to sustain motivated beliefs. However, the estimated effect is not quantitatively large enough to generate significant asymmetric updating about own IQ test performance.
The Role of Referrals in Immobility, Inequality, and Inefficiency in Labor Markets
(with Nicole Immorlica and Matthew O. Jackson)
We study the consequences of job markets' heavy reliance on referrals. Referrals screen candidates and lead to better matches and increased productivity, but disadvantage job-seekers who have few or no connections to employed workers, leading to increased inequality. Coupled with homophily, referrals also lead to immobility: a demographic group's low current employment rate leads that group to have relatively low future employment as well. We identify conditions under which distributing referrals more evenly across a population not only reduces inequality, but also improves future productivity and economic mobility. We use the model to examine optimal policies, showing that one-time affirmative action policies involve short-run production losses, but lead to long-term improvements in equality, mobility, and productivity due to induced changes in future referrals. We also examine how macroeconomic conditions as well as the possibility of firing workers changes the effects of referrals.
Interactions across multiple games: cooperation, corruption, and organizational design
(with Jonathan B. Bendor, Nicole Immorlica and Matthew O. Jackson)
Teams face a variety of strategic circumstances, and it is socially beneficial for teams to cooperate in productive but not in corrupt ones. Understanding the behavior and social impact of teams requires understanding how cooperation in one situation depends on expectations of cooperation in others. We examine how the assignment of people to teams, and teams to tasks, affects cooperation among team members. We characterize the interdependency of cooperation across situations and show that in some settings, it may be impossible to get desirable types of cooperation without also getting undesirable cooperation. We show how cooperation in such interdependent settings is affected in nuanced ways by changes in the payoffs to cooperation and the temptations to deviate. This has novel implications for performance bonuses, occupational safety, and whistle-blowing rewards. The optimal organizational design involves minimizing corruption by some reshuffling of team members and specializing of the tasks to which different teams are assigned. We also analyze how technological advances change optimal team structure. Throughout, we discuss the implications for organizing bureaucracies, such as police forces and militaries, as well as private enterprises.
Work In-Progress
The Role of Memory in Beliefs Formation
(with Markus M. Mobius, Tanya S. Rosenblat and Pierre-Luc Vautrey)
Red or Blue Pill? A Positive Welfare Analysis
(with Gonzalo R. Arrieta)
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