How to Make an Action Attractive

Marilyn Pease; Mark Whitmeyer

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arXiv · 2408.09294

How to Make an Action Attractive

Marilyn Pease·Mark Whitmeyer

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Abstract

A policymaker often wants to steer a decision-maker toward one of two actions, but lacks reliable knowledge of how the decision-maker perceives uncertainty or evaluates risk. We formalize a notion of robust paternalism: a modification a' of a desired action a is robustly more attractive than a relative to b if, for every belief over states and every increasing concave utility function, whenever the decision-maker prefers a to b, she also prefers a' to b. We characterize all such modifications directly in terms of state-dependent payoffs and discuss applications to political competition, bilateral trade, insurance, and information acquisition.

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Marilyn Pease, Mark Whitmeyer. 2024-08-17. How to Make an Action Attractive. https://arxiv.org/abs/2408.09294

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