arXiv subjects

Aldo Rustichini

Publications and source records attributed to Aldo Rustichini.

6 recordsLinked to original sources

arXiv2026

Effects of Genetic Propensity for Education on Labor Market and Health Trajectories across the Working Life

Education is a major source of inequality in income and health. Polygenic indices for educational attainment (EA-PGI) capture both direct and indirect genetic influences on education, but their effects on income and health remain unclear. Using Finnish registry data on 51,056 graduates followed annually since graduation for up to 25 years, we report three findings. First, higher EA-PGI strongly predicts income growth, but only among higher educated people: tertiary-educated graduates at the 90th percentile earn EUR 45,392 (13.1 percent) higher discounted lifetime income than those at the 10th percentile. This effect is not mediated by overall health and is entirely absent for the secondary (high school)-educated workers, who do not benefit from higher EA-PGI levels. Second, EA-PGI does not predict income differences at labor market entry or the quality of the first employer, but rather higher job-to-job mobility toward higher-quality firms that drives the long-run income divergence. Third, controlling for parental EA-PGI in 12,871 parent-offspring trios reduces the discounted lifetime income gap by 71 percent, and the effect of paternal (but not maternal) EA-PGI on offspring income exceeds that of the offspring's own EA-PGI. These findings suggest that genetic factors associated with educational attainment predict income trajectories primarily through faster and more frequent changes to higher-paying employers. However, much of this association reflects indirect paternal genetic effects, consistent with enduring paternal patterns of intergenerational job and income transmission.

econ.GN↗

arXiv2025

Equalizer or amplifier? How AI may reshape human cognitive differences

Machines have at times equalized physical strength by substituting for human effort, and at other times amplified these differences. Artificial intelligence (AI) may likewise narrow or widen disparities in cognitive ability. Recent evidence from the Information and Communication Technology (ICT) revolution suggests that computers increased inequality by education but reduced it by cognitive ability. Early research on generative AI shows larger productivity gains for less-skilled than for high-skilled workers. Whether AI ultimately acts as an equalizer or an amplifier of human cognitive differences is especially crucial for education systems, which must decide whether -- and how -- to allow students to use AI in coursework and exams. This decision is urgent because employers value workers who can leverage AI effectively rather than operate independently of it.

econ.GN↗

arXiv2020

A Canon of Probabilistic Rationality

We prove that a random choice rule satisfies Luce's Choice Axiom if and only if its support is a choice correspondence that satisfies the Weak Axiom of Revealed Preference, thus it consists of alternatives that are optimal according to some preference, and random choice then occurs according to a tie breaking among such alternatives that satisfies Renyi's Conditioning Axiom. Our result shows that the Choice Axiom is, in a precise formal sense, a probabilistic version of the Weak Axiom. It thus supports Luce's view of his own axiom as a "canon of probabilistic rationality."

econ.TH↗

arXiv2020

Axiomatic Tests for the Boltzmann Distribution

The Boltzmann distribution describes a single parameter (temperature) family of probability distributions over a state space; at any given temperature, the ratio of probabilities of two states depends on their difference in energy. The same family is known in other disciplines (economics, psychology, computer science) with different names and interpretations. Such widespread use in very diverse fields suggests a common conceptual structure. We identify it on the basis of few natural axioms. Checking whether observables satisfy these axioms is easy, so our characterization provides a simple empirical test of the Boltzmannian modeling theories.

math.PR↗

arXiv2020

Multinomial logit processes and preference discovery: inside and outside the black box

We provide two characterizations, one axiomatic and the other neuro-computational, of the dependence of choice probabilities on deadlines, within the widely used softmax representation \[ p_{t}\left( a,A\right) =\dfrac{e^{\frac{u\left( a\right) }{\lambda \left( t\right) }+\alpha \left( a\right) }}{\sum_{b\in A}e^{\frac{u\left( b\right) }{\lambda \left( t\right) }+\alpha \left( b\right) }}% \] where $p_{t}\left( a,A\right) $ is the probability that alternative $a$ is selected from the set $A$ of feasible alternatives if $t$ is the time available to decide, $\lambda$ is a time dependent noise parameter measuring the unit cost of information, $u$ is a time independent utility function, and $\alpha$ is an alternative-specific bias that determines the initial choice probabilities reflecting prior information and memory anchoring. Our axiomatic analysis provides a behavioral foundation of softmax (also known as Multinomial Logit Model when $\alpha$ is constant). Our neuro-computational derivation provides a biologically inspired algorithm that may explain the emergence of softmax in choice behavior. Jointly, the two approaches provide a thorough understanding of soft-maximization in terms of internal causes (neurophysiological mechanisms) and external effects (testable implications).

econ.TH↗

arXiv2001

Statistical mechanics of asset markets with private information

Traders in a market typically have widely different, private information on the return of an asset. The equilibrium price of the asset may reflect this information more accurately if the number of traders is large enough compared to the number of the states of the world that determine the return of the asset. We study the transition from markets where prices do not reflect the information accurately into markets where it does. In competitive markets, this transition takes place suddenly, at a critical value of the ratio between number of states and number of traders. The Nash equilibrium market behaves quite differently from a competitive market even in the limit of large economies.

cond-mat.stat-mech↗