About Me

Welcome! I am a Postdoctoral Scholar in the Department of Economics at the University of California, Berkeley. I have broad interests in microeconomic theory and methodological questions in economics. My research combines theoretical and experimental work, using a blend of rational and boundedly rational modeling, to understand individual decision and strategic interactions.

My email is cugarte@berkeley.edu

Working Papers

Preference Recoverability from Inconsistent Choices

We study the analysis of choices imperfectly aligned with the preference relation that drives them. First, we develop a measure of decision-making quality that, unlike the existing ones, ensures to asymptotically measure the distance between the subject's choices and her underlying preference (instead of some preference). We then use such a measure to propose a statistically consistent preference estimator. Empirical results suggest consistency is a relevant property when recovering preferences, especially for complex choice environments, compared to estimators based on intuitive motivations.

Smooth Rationalization

Economic models usually endow agents with (well-behaved) differentiable utilities. However, the behavioral implications of such an assumption are unclear. We study conditions under which choices can be rationalized by a differentiable utility, i.e., smoothly rationalized. Differentiability implies that indifferent choices have the same marginal rate of substitution. Starting from this observation, we develop an exact test for smooth rationalization. We also show that the existence of higher-order derivatives, commonly used for comparative statics, is empirically costless. We test smooth rationalization into several experimental data sets and find that, in most cases, choices are consistent with a differentiable utility.

The generality of the Strong Axiom

Economic research usually endows consumers with a single-valued demand function. When choices are rationalizable, this assumption can be tested by the Strong Axiom of Revealed Preferences, SARP, as if they fail such a test, the demand is set-valued. We extend this test to non-rationalizable choices using partial efficiency, the most popular method to recover preferences. Under partial efficiency, a single-valued demand cannot be tested; furthermore, it can always be chosen to be infinitely differentiable. Hence, the existence of a single-valued, infinitely differentiable demand is falsified if, and only if, choices are rationalizable but fail SARP, which we do not observe in laboratory data. From an empirical standpoint, our results suggest that assuming a differentiable demand does not carry a cost.

Work in Progress

Ultimatum Games on Budget Sets

(with Yu-Ting Ho and
Shachar Kariv

We develop an experimental study of the ultimatum game and analyze the result through the logit quantal response equilibrium (QRE). The decision problems are presented using a novel graphical experimental interface, generating a rich individual-level data set, which allows us to understand what strategies this equilibrium concept identifies as more rational. It also sheds light on the equilibrium selection problem for the logit QRE model.

A geometric proof of Afriat Theorem

Using a geometric argument, I present a non-constructive proof of Afriat Theorem. The proof intuitively explains what Paul Samuelson described as the “eternal darkness” of decision theory: that a rationalizing utility can always be chosen to be convex. The proof also sheds light on why concavity might be loss as the number of observations goes to infinity, but quasiconcavity (concavity of the upper contour sets) is preserved.


You can download my CV here.