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Russ Yoon

Publications and source records attributed to Russ Yoon.

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Social learning drives underprioritization of collective challenges

Societies often struggle to prioritize important challenges in a timely manner, with substantial costs from delayed action on issues like climate change and pandemic mitigation. A persistent puzzle is that broad concern on issues often fails to translate into collective priority. We argue that a key driver lies in how concern is formed across competing issue domains. Some issues depend heavily on social learning, where individuals infer importance from others, often because direct experience is limited. Others depend more on individual learning from firsthand experience. We develop a dynamic model in which two subgroups form issue-specific concerns through individual and social learning, and these concerns are aggregated into collective priority. The model yields three insights. First, with two issues of equal objective severity, the one that depends more on social learning tends to be underprioritized when both issues are severe. Second, gradual increases in severity delay reprioritization of the issue, with the delay growing as reliance on social learning increases. Third, this bias can be reduced by reducing social learning or by increasing intergroup learning beyond a critical threshold. These results offer a general mechanism for why severe problems can remain neglected in collective action despite widespread concern, and why intergroup interaction or experiential simulations may help align collective priorities with objective risks.

physics.soc-ph

An Empirical Analysis of Optimal Nonlinear Pricing in Business-to-Business Markets

In continuous-choice settings, consumers decide not only on whether to purchase a product, but also on how much to purchase. Thus, firms optimize a full price schedule rather than a single price point. This paper provides a methodology to empirically estimate the optimal schedule under multi-dimensional consumer heterogeneity with a focus on B2B applications. We apply our method to novel data from an educational-services firm that contains purchase-size information not only for deals that materialized, but also for potential deals that eventually failed. We show that this data, combined with identifying assumptions, helps infer how price sensitivity varies with "customer size". Using our estimated model, we show that the optimal second-degree price discrimination (i.e., optimal nonlinear tariff) improves the firm's profit upon linear pricing by at least 8.2%. That said, this second-degree price discrimination scheme only recovers 7.1% of the gap between the profitability of linear pricing and that of infeasible first degree price discrimination. We also conduct several further simulation analyses (i) empirically quantifying the magnitude by which incentive-compatibility constraints impact the optimal pricing and profits, (ii) comparing the role of demand- v.s. cost-side factors in shaping the optimal price schedule, and (iii) studying the implications of fixed fees for the optimal contract and profitability.

econ.GN