Alexander Clyde
Hi!
I am a PhD student in Economics at University College London
You can find my CV [here]
Research Fields:
Microeconomic Theory, Bounded Rationality, Behavioural Economics
Email:
alexander.clyde.econ@gmail.com
Working Papers
Proxy Variables and Feedback Effects in Decision Making [Draft]
Abstract
When using data, often an analyst only has access to proxies or measurements of the true variables of interest. I propose a framework that models economic decision makers as ‘flawed statisticians’ who assume potentially noisy proxy variables are perfectly measured. Due to feedback from the choices into data, a notion of equilibrium is required to close the model. I illustrate the concept with applications to policing/crime and market entry. In these examples, we see that very small imperfections in the proxy variable can lead to large distortions in beliefs. I characterize all strategies that can arise as equilibria when measurement is arbitrarily close to perfect.