Yuval
Salant Associate Professor of Managerial Economics and Decision Sciences Kellogg School of Management 

CV  
Google Scholar Profile  
Research Interests  
Foundations of Behavioral Economics, Bounded Rationality, Choice Theory 

How to contact me 

Mailing address: 

MEDS Department Kellogg School of Management Northwestern University 2001 Sheridan Rd Evanston, IL 602082001 USA 

Email: ysalant@northwestern.edu  
Phone: 18474915149  
Published and forthcoming papers 
1. “On the Causes and Consequences of Ballot OrderEffects”, with Marc Meredith, Political Behavior, 35 (2013), No. 1, 175197 
Featured in the Wall Street Journal (online and print), Chicago Tribune (online and print), Postmedia News 
We investigate the effect of ballot order on the outcomes of California city council and school board elections. Candidates listed first win office between four and five percentage points more often than expected absent order effects. This first candidate advantage is larger in races with more candidates and for higher quality candidates. The first candidate advantage is similar across contexts: the magnitude of the effect is not statistically distinguishable in city council and in school board elections, in races with and without an open seat, and in races consolidated and not consolidated with statewide general elections. Standard satisficing models cannot fully explain ballot order effects in our dataset of multiwinner elections.

2. “Eliciting Welfare Preferences from Behavioral Datasets”, with Ariel Rubinstein, Review of Economic Studies, 79 (2012), No. 1, 375387 An individual displays various preference orderings in different payoffirrelevant circumstances. It is assumed that the variation in the observed preference orderings is the outcome of some cognitive process that distorts the underlying preferences of the individual. We introduce a framework for eliciting the individual's underlying preferences in such cases, and then demonstrate it for two cognitive processes  satisficing and small assessment errors.

3. “Procedural Analysis of Choice Rules with Applications to Bounded Rationality”, American Economic Review, 101 (2011), No. 2, 724748 I study how limited abilities to process information affect choice behavior. I model the decision making process by an automaton, and measure the complexity of a specific choice rule by the minimal number of states an automaton implementing the rule uses to process information. I establish that any choice rule that is less complicated than utility maximization displays framing effects. I then prove that choice rules that result from an optimal tradeoff between maximizing utility and minimizing complexity are historydependent satisficing procedures that display primacy and recency effects.

4. “( A , f ): Choice with Frames”, with Ariel Rubinstein, Review of Economic Studies, 75 (2008), No. 4, 12871296 We develop a framework for modeling choice in the presence of framing effects. An extended choice function assigns a chosen element to every pair (A , f ) where A is a set of alternatives and f is a frame. A frame includes observable information that is irrelevant in the rational assessment of the alternatives, but nonetheless affects choice. We relate the new framework to the classical model of choice correspondence. Conditions are identified under which there exists either a transitive or a transitive and complete binary relation R such that an alternative x is chosen in some (A , f ) iff x is Rmaximal in the set A. We then demonstrate that the framework of choice correspondence misses information, which is essential to economic modeling and which is incorporated in the extended choice function.

5. “Some Thoughts on the Principle of Revealed Preference”, with Ariel Rubinstein, In Handbooks of Economic Methodologies (Andrew Caplin and Andrew Schotter, eds.), New York: Oxford University Press, 2008, 115124 The Principle of Revealed Preference is a methodological paradigm whereby observed choices of an individual are used only to reveal her mental preferences. We make three statements about the way that economists view this principle as a modeling guide. First, we argue that there is no escape from including mental entities such as mental preferences in addition to observed choices in economic models. Second, we assert that economists should be looking at models in which an observed choice leads to conclusions other than that the chosen element is always mentally preferred to the other elements in the choice problem. Finally, we claim that there is room for models of choice in which the observable information about a choice situation is richer than just the set of available alternatives and the alternative chosen.

6. “On the Learnability of Majority Rule”, Journal of Economic Theory, 135 (2007), No. 1, 196213 (Available online at ScienceDirect) I establish how large a sample of past decisions is required to predict future decisions of a committee with few members. The committee uses majority rule to choose between pairs of alternatives. Each member’s vote is derived from a linear ordering over all the alternatives. I prove that there are cases in which an observer cannot predict precisely any decision of a committee based on its past decisions. Nonetheless, approximate prediction is possible after observing relatively few random past decisions.

7. “A Model of Choice from Lists”, with Ariel Rubinstein, Theoretical Economics, 1 (2006), No. 1, 317 The standard economic choice model assumes that the decision maker chooses from sets of alternatives. In contrast, we analyze a choice model in which the decision maker encounters the alternatives in the form of a list. We present two axioms similar in nature to the classical axioms of choice from sets. We show that they characterize all the choice functions from lists that involve the choice of either the first or the last optimal alternative in the list according to some preference relation. We then relate choice functions from lists to the classical notions of choice correspondences and random choice functions.

Working papers 
8. “Contracts with Framing”, with Ron Siegel We study a model of contracts in which a profitmaximizing seller uses framing to influence buyers' behavior. Framing affects how buyers compare different products, but does not change buyers' willingness to pay. We provide conditions under which framing is profitenhancing, and analyze the welfare properties of optimal contracts. Framing that is not too strong reduces total welfare in regulated markets with homogenous buyers, but increases total welfare in markets with heterogenous buyers when the proportion of buyers with low willingness to pay is small.

9. “Reallocation Costs and Efficiency”, with Ron Siegel We study the efficient allocation of a divisible asset when reallocation is costly. Two players initially divide an asset between them. At the time of this initial division the players' valuations for the asset are uncertain. After the uncertainty resolves, costly reallocation may take place. We first establish that the surplus associated with efficient reallocation monotonically increases or decreases in the concentration of the initial division for a wide range of cost specifications. We then characterize how the budget necessary to implement the efficient reallocation changes with the initial division.

10. “They Do What I Do: Positive Correlation in Expost Beliefs”, with Ariel Rubinstein After playing the Chicken game, players report their beliefs about their opponent's strategy in different frames. It is found that the framing of the belief elicitation question influences the degree of positive correlation between a player's reported belief and his action. It is also found that players believe there is positive correlation in the actions of two randomly selected players. The results are consistent with the existence of two forces influencing expost belief formation: strategic justification (i.e. a player wishes to rationalize his action in the game) and selfsimilarity (i.e. a player thinks that his opponent behaves the same way he does). Implications for belief elicitation techniques and equilibrium concepts are discussed.

Work in progress 
11. “Generalized Sampling Equilibrium”, with Josh Cherry We propose a solution concept called Generalized Sampling Equilibrium (GSE), where players use statistical rather than strategic reasoning when making decisions. This concept is rooted in the sampling equilibrium of Osborne and Rubinstein (1998, 2003), and accommodates a variety of other statistical reasoning procedures. For a large class of twoaction games, we show that the GSE is unique, compare its predictions to those of Nash equilibrium, and characterize how the GSE changes with the size of the sample players obtain. We also demonstrate the predictions of GSE in several applications, including a labor matching application in which sampling introduces a friction that results in a larger unemployment than in Nash equilibrium.

12. “The Visual Ratio Effect on Children's Choice and Consumption”, with Michal Maimaran We study how changing the relative frequency of an item in a choice set affects young children's decision making. In food and nonfood choice tasks, four to five year old children are asked to choose from a set in which each item appears multiple times. When items are visually different from one another, children are more likely to choose an item when its relative frequency in the set decreases. Adults do not show such tendency. We demonstrate that this visualratio effect can be used to increase the likelihood of choosing a fruit over crackers. We also demonstrate that the effect can be used to increase the consumption of vegetables: when children are offered a plate with carrots and crackers, reducing the ratio of carrots in the plate increases the ratio of carrot consumption.

13. “On the Relevance of Probability Distortions in the Extended Warranties Market”, with Jose Miguel Abito We study the reasons for the high profits in the extended warranties market. Using data from a big US consumer electronics retailer on extended warranty purchases between 1998 and 2004, we estimate a model in which a profitmaximizing monopolistic seller offers extended warranties to a population of riskaverse consumers who may distort failure probabilities. We find that overweighting of failure probabilities is a relevant factor in determining economic outcomes in this market: without probability overweighting, profits drop by 90% and consumer surplus more than doubles. We also find that probability overweighting is affected by the environment and is reduced with learning: there is less overweighting in online transactions than in instore transactions, and the likelihood of the same household buying an extended warranty is reduced with time.
