Tigran Melkonyan

Tigran Melkonyan
University of Alabama | UA · Department of Economics, Finance and Legal Studies

PhD

About

70
Publications
8,189
Reads
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435
Citations
Additional affiliations
April 2013 - present
The University of Warwick
Position
  • Professor

Publications

Publications (70)
Article
We develop a model that explains the stylized facts of food scares: an immediate and sharp decline in consumption of the product followed by a slow and frequently partial recovery of demand after the scare passes. The model is used in conjunction with the natural experiment afforded by the ‘mad-cow’ crisis to elicit empirical information on decisio...
Article
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Many social interactions require humans to coordinate their behavior across a range of scales. However, aspects of intentional coordination remain puzzling from within several approaches in cognitive science. Sketching a new perspective, we propose that the complex behavioral patterns – or ‘unwritten rules’ – governing such coordination emerge from...
Article
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The paper analyzes choice behavior that is frequently observed in real life and experimental settings and that seems to exhibit intransitivity of the underlying preferences. We examine the random preference model, which can explain inherent variability of preferences in managerial and individual decision-making and provide axiomatizations for the u...
Article
How do firms manage to collude without communicating? Why do we find more collusion in price competition than in quantity competition? Why is collusion so hard to detect? We examine strategic behavior in competitive interactions by developing and applying the concept of virtual bargaining. When decision makers virtually bargain, they mentally simul...
Article
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The paper uses information on actual and hypothetical charitable contributions to cancer research in the United Kingdom to elicit information on justice principles endorsed by donors. They face a choice between fund-raising contributions for several hereditary and lifestyle-related cancers. Donors’ choices of how much to donate to different cancers...
Article
People often make, and are held to account for, purely tacit commitments in interactions with other people: commitments that have never been explicitly articulated or agreed. Moreover, unspoken, tacit commitments are often perceived as binding: people often stick to, and are expected to stick to, these commitments, even where it might seem against...
Article
Social interaction is both ubiquitous and central to understanding human behavior. Such interactions depend, we argue, on shared intentionality: the parties must form a common understanding of an ambiguous interaction (e.g., one person giving a present to another requires that both parties appreciate that a voluntary transfer of ownership is intend...
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We derive representations of incomplete preferences in terms of willingness-to-pay measures. The paper demonstrates how these representations can be used to determine whether preferences are incomplete. We also study local approximations to incomplete preference structures and how attitudes to ambiguity affect willingness-to-pay measures.
Preprint
Full-text available
Bayesian updating is the dominant theory of learning. However, the theory is silent about how individuals react to events that were previously unforeseeable or unforeseen. We test if subjects update their beliefs according to `reverse Bayesianism', under which the relative likelihoods of prior beliefs remain unchanged after an unforeseen event mate...
Article
May provides a compelling case that reasoning is central to moral psychology. In practice, many morally significant decisions involve several moral agents whose actions are interdependent – and agents embedded in society. We suggest that social life and the rich patterns of reasoning that underpin it are ethical through and through.
Preprint
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Decision-makers often lack sufficient information to construct unique probabilities over potential quality levels for many of the goods they consume. In this study, we model an individual with maximin expected utility preferences to examine how ambiguity about quality and information communicated by a second party affect willingness to pay (WTP) fo...
Article
Full-text available
People often make, and are held to account for, purely tacit commitments in interactions with other people: commitments which have never been explicitly articulated or agreed. Moreover, unspoken, tacit commitments are often perceived as binding: people often stick to, and are expected to stick to, these commitments, even where it might seem against...
Article
Full-text available
The article examines how the perception of others' irresponsible behavior and ambiguity regarding probabilities affect allocation among potential beneficiaries. To elicit these views, we conducted a survey where the participants were first asked to make an allocation of a fixed sum of money between a hereditary cancer, where chance plays a central...
Article
This paper shows that betting or speculative trading between agents with incomplete preferences is likely to occur if agents have access to convex choice sets. This contrasts sharply with endowment economy models where preference incompleteness often hinders betting, speculative trading or mutually beneficial insurance arrangements. Our results imp...
Research
Full-text available
People often psychologically commit to a course of action in strategic interactions, even where it might seem irrational to do so. For example, such psychological commitments may lead people to punish counterparts who violate an unenforceable agreement (at a cost to themselves), or to cooperate in the Centipede game and the finitely repeated Prison...
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The paper examines contests where players perceive ambiguity about their opponents' strategies and determines how perceptions of ambiguity and attitudes to ambiguity affect equilibrium choice. Behaviour in our contest is affected by pessimistic and optimistic traits. Which of these traits dominates determines the relationship between the equilibriu...
Preprint
Full-text available
This paper shows that betting or speculative trading between agents with incomplete preferences is likely to occur if agents have access to convex choice sets. This contrasts sharply with endowment-economy models where preference incompleteness often hinders either betting, speculative trading, or mutually beneficial insurance arrangements. Our res...
Preprint
Full-text available
The paper studies the moral and ethical facets of risk analysis. We developed theoretical and empirical models to examine choice egalitarian fairness principle, which holds people responsible for their choices but not for their bad luck, vis-à-vis non-choice egalitarianism, which doesn't punish or reward people for their behavior. To elicit attitud...
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Governments face pressure to act when coordination and learning externalities block development of otherwise-profitable industries that would produce merit goods for the domestic market. A short-term subsidy that offsets these externalities could potentially jump-start a multi-firm industry, if the subsidy induces a pioneer firm to enter and then t...
Article
This paper examines climate-change benefit-cost analysis in the presence of scientific uncertainty in the form of ambiguity. The specific issue addressed is the robustness of benefit-cost analyses of climate-change policy alternatives to relaxation of Savage's original axioms. Two alternatives to subjective expected utility (SEU) are considered: ma...
Article
The paper examines the effect of ambiguity on contests where multiple parties expend resources to win a prize. We develop a model where contenders perceive ambiguity about their opponents' strategies and determine how perceptions of ambiguity and attitudes to ambiguity affect equilibrium choice. The paper also investigates how equilibrium under amb...
Article
This paper examines hybrid contests where participants commit two types of resources to improve their probability of winning the prize. The first type is forfeited ex ante, before the prize is allocated, by winners and losers alike, while the second is committed ex ante by all contenders but expended ex post, after the prize is allocated, and only...
Article
A model endogenizing authority over decisions and incentive contracts is developed. In addition to motivating the agent to exert effort, the principal is concerned about some non-contractible decision that is chosen simultaneously with the agent's effort. The choice of this decision affects both the performance measure and the principal's objective...
Article
The article develops a framework to examine the interaction between the migrant and the remittance-receiving relative(s) under non-cooperative and cooperative scenarios. The model has an overlapping generations' structure where both parties have altruistic behavioural traits. We derive the relationships between the remittances, consumption, labour...
Article
Empirical studies that use self-reported data on remittances to measure the latter's impact on microeconomic incentives mostly ignore the potential errors associated with reporting/measurement issues. An econometric procedure to control for these errors is developed and applied to household level data from Armenia. We find evidence of systematic un...
Article
Full-text available
We model a game between two players taking biosecurity actions and characterize the Nash equilibria and their properties for the cases of strategic complements and substitutes. Implications of the theoretical model are investigated using data for biosecurity behavior among producers participating in a livestock exhibition. Biosecurity actions with...
Article
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Decision makers are frequently confronted with ambiguous risk information about activities with potential hazards. This may be a result of conflicting risk estimates from multiple sources or ambiguous risk information from a single source. The paper considers processing ambiguous risk information and its effect on the behavior of a decision maker w...
Article
The paper uses data from Armenia to test the implications of remittance flows on behavior of receiving households. We find that remittance-receiving households work fewer hours and spend less on the education of their children. While saving more, these households are not leveraging their savings to borrow from the banking system to expand their bus...
Article
The paper examines principal–agent relationships in uncertain environments where beliefs of the contracting parties (the regulator and the firm) are represented by sets of probabilities. In addition to fully characterizing the first-best and the second-best solutions, we examine optimality of zero-risk, fixed-payment schemes and the relationship be...
Article
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Using a subclass of the α-maximin expected-utility preference model, in which the decision maker’s degree of ambiguity and degree of pessimism are each parameterized, we present a theory of religious choice in the Pascalian decision theory tradition, one that can resolve dilemmas, address the “many Gods objection,” and address the ambiguity inheren...
Article
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This paper develops a model to analyze regulatory design for agroecosystem management on public rangeland. We define and compare the efficiency of the most prominent regulatory instruments on public rangeland—input regulation, cost-sharing/taxation, and performance regulation. We show that given informational asymmetries between ranchers and regula...
Article
Full-text available
Using basic decision-theory, we construct a theory of agnosticism, where agnosticism is defined as choosing not to choose a religion. The theory indicates agnosticism can be supported as a rational choice if (a) adopting agnosticism provides in-life benefits relative to any religion, (b) the perceived payoff for agnosticism after death is not too m...
Article
The food safety regulations carried out by the United States Department of Agriculture (USDA) have ambiguity about them. Food-borne illness is recognized as a significant public health problem in the US. A number of regulatory mechanisms have been introduced over the years due to potential market failures associated with the provision of adequate l...
Article
This paper considers the simple neoclassical economics of price gaps in the absence of income effects. Our guiding principle is that price gaps reflect a fundamental economic principle: buy low and sell high. It is demonstrated that neoclassical theory makes clear and economically testable predictions about these price gaps.
Article
We identify conditions under which receipt of information in the form of a (potentially) ambiguous signal leads to a smoother maximin expected utility (MEU) preference structure which translates behaviorally into a smaller no-trade price zone. Narrowing of the no-trade price zone depends critically on the rectangularity of the belief structure, whi...
Article
Full-text available
We study regulatory design for a pollution-generating firm who is better informed than the regulator regarding pollution mitigation possibilities, and who chooses an unobservable action when employing a particular mitigation plan. We distinguish among performance, process, and design standards, and study the relative merit of each type of regulator...
Article
Full-text available
Empirical studies that use self-reported data on remittances to measure the latter's impact on microeconomic incentives mostly ignore the potential errors associated with reporting/measurement issues. An econometric procedure to control for these errors is developed and applied to household-level data from Armenia. We find evidence of systematic un...
Article
Full-text available
Using a relatively mild restriction on the beliefs of the MMEU-apreference functional, in which the decision maker’s degree of ambiguity and degree of pessimism are each parameterized, we present a rather general theory of religious choice in the decision theory tradition, one that can resolve dilemmas, address the many Gods objection, and address...
Article
Full-text available
We examine the implications of decision theory for religious choice and evangelism, under the assumption that people choose their religion. The application of decision theory leads us to a broad definition of religion and a particular definition of faith, each related to the uncertainty associated with what happens to a person after death. We exami...
Article
Full-text available
The paper explicitly models the dynamic strategic aspects of the interaction between the migrant and the remittance-receiving relative(s), with the migrant behaving as a Stackelberg leader. It is also different from other formalizations of remittance behavior in its treatment of the two parties' interaction to realize potential gains from exchange....
Article
Full-text available
We develop an algorithm that can be used to approximate a decisionmaker’s beliefs for a class of preference structures that includes, among others, α-maximin expected utility preferences, Choquet expected utility preferences, and, more generally, constant additive preferences. For both exact and statistical approximation, we demonstrate convergence...
Article
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This study explores the ways in which information about other individual's action affects one's own behavior in a dictator game. The experimental design discriminates behaviorally between three possible effects of recipient's within-game reputation on the dictator's decision: Reputation causing indirect reciprocity, social influence, and identifica...
Article
We use standard results from convex geometry to obtain representations of the prior and posterior degrees of imprecision in terms of width functions and difference bodies. These representations are used to construct algorithms for the calculation of the prior and the posterior degree of imprecision.
Article
Optimal trade policy in an uncertain world is examined. Decision-maker attitudes toward uncertainty are represented in terms of the Gilboa-Schmeidler (1989) maximin expected-utility (MMEU) model. The central result is that in a two-country, general-equilibrium setting with both trading partners possessing an MMEU preference structure, Pareto optima...
Article
Full-text available
The material contained herein is supplementary to the article named in the title and published in the American Journal of Agricultural Economics, May 2007, Volume 89, Issue 2.
Article
We extend the basic chain-store game to the two-incumbent case. A highly stylized model is developed to analyze incentives of incumbent firms to maintain reputation for toughness. Entry deterrence has a public good property. Since maintaining reputation is costly, each incumbent has an incentive to free ride on the entry deterring activities of its...
Article
Full-text available
We study the optimal allocation of land and physical asset ownership between a farmer who works with land and assets directly, and an intermediary who sells the farmer’s output in some downstream market. The farmer can either work as an \employee" of the intermediary (intermediary owns the land and assets), or as an \independent producer" (farmer o...
Article
This paper examines contracts used in the North American sugarbeet industry. Though quite similar in many respects, the contracts we study vary across processing firms in the set of quality measures used to condition contract payments to growers. This is somewhat surprising, given the homogeneous nature of the processors' finished product (refined...
Article
The paper utilizes duality theory to derive an exact representation of the core of a supermodular capacity for finite-state-space Choquet expected utility preferences. Using the dual representation we develop an algorithm that uses information on willingness to pay and willingness to sell to elicit a supermodular capacity in a finite number of iter...
Article
We consider optimal trade policy for a large country with private information. We show that the optimal tariff leads to a signaling equilibrium with higher tariffs and lower welfare than under complete information, whereas the optimal import quota replicates the complete information equilibrium and thus is superior to the tariff. We also show that,...
Article
This paper examines contracts used in the North American sugarbeet industry. Though quite similar in many respects, the contracts we study vary across processing firms in the set of quality measures used to condition contract payments to growers. This is somewhat surprising, given the homogeneous nature of the processors' finished product (refined...
Article
We develop a model explaining the consolidation patterns in the agricultural biotechnology industry. Among different consolidation and cooperation mechanisms, we consider collaborative and licensing agreements, joint ventures, acquisitions, and exchanges of ownership and spin-offs. The key results derive from the benefits of coordinated actions, di...
Article
Full-text available
Why do countries� greenhouse gas (GHG) intensities differ? How much of a country�s GHG intensity is set by inflexible national circumstances, and how much may be altered by policy? These questions are common in climate change policy discourse and may influence emission reduction allocations. Despite the policy relevance of the discussion, little qu...
Article
Full-text available
We consider optimal trade policy for a large country with private information. We show that the optimal tariff leads to a signaling equilibrium with higher tariffs and lower welfare than under complete information, whereas the optimal import quota replicates the complete information equilibrium and thus is superior to the tariff. We also show that,...
Article
We examine the choice of efficient decision rules in a budget-balanced organization. The organization awards a scarce ``project'' to the organization member who values it most, and redistributes some surplus from the project among all remaining members. An auction-based allocation rule tends to generate majority support when the number of members i...
Article
This paper is about the strategy of retaining unobservably heterogeneous firms attracted by unobservably valued outside alternatives. We prove that differentiating taxation and public good fiscal packages within one's own locale dominates offering the same packages to all firms. We rationalize the full range of observed practice by considering more...
Article
Full-text available
We examine agricultural contracting parties' incentives to employ quality measurement. Quality measurement will be used if on-farm production of ``quality'' is sufficiently cheap, and quality measurement sufficiently informative. We qualitatively test these predictions with empirical observation across fresh and processed commodities, and across re...

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