IDEAS home Printed from https://ideas.repec.org/p/arx/papers/1810.02888.html
   My bibliography  Save this paper

The Model Selection Curse

Author

Listed:
  • Kfir Eliaz
  • Ran Spiegler

Abstract

A "statistician" takes an action on behalf of an agent, based on the agent's self-reported personal data and a sample involving other people. The action that he takes is an estimated function of the agent's report. The estimation procedure involves model selection. We ask the following question: Is truth-telling optimal for the agent given the statistician's procedure? We analyze this question in the context of a simple example that highlights the role of model selection. We suggest that our simple exercise may have implications for the broader issue of human interaction with "machine learning" algorithms.

Suggested Citation

  • Kfir Eliaz & Ran Spiegler, 2018. "The Model Selection Curse," Papers 1810.02888, arXiv.org.
  • Handle: RePEc:arx:papers:1810.02888
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/1810.02888
    File Function: Latest version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Abhijit Banerjee & Sylvain Chassang & Sergio Montero & Erik Snowberg, 2017. "A Theory of Experimenters," NBER Working Papers 23867, National Bureau of Economic Research, Inc.
    2. Park, Trevor & Casella, George, 2008. "The Bayesian Lasso," Journal of the American Statistical Association, American Statistical Association, vol. 103, pages 681-686, June.
    3. Osborne, Martin J & Rubinstein, Ariel, 1998. "Games with Procedurally Rational Players," American Economic Review, American Economic Association, vol. 88(4), pages 834-847, September.
    4. Ran Spiegler, 2006. "The Market for Quacks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 1113-1131.
    5. Sylvain Chassang & Gerard Padro I Miquel & Erik Snowberg, 2012. "Selective Trials: A Principal-Agent Approach to Randomized Controlled Experiments," American Economic Review, American Economic Association, vol. 102(4), pages 1279-1309, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eric Danan & Thibault Gajdos & Jean-Marc Tallon, 2023. "Tailored recommendations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 60(1), pages 15-34, January.
    2. Ganesh Iyer & T. Tony Ke, 2022. "Competitive Algorithmic Targeting and Model Selection," NBER Chapters, in: Economics of Artificial Intelligence, National Bureau of Economic Research, Inc.
    3. Eliaz, Kfir & Spiegler, Ran, 2022. "On incentive-compatible estimators," Games and Economic Behavior, Elsevier, vol. 132(C), pages 204-220.
    4. Mehmet Caner & Kfir Eliaz, 2021. "Shoiuld Humans Lie to Machines: The Incentive Compatibility of Lasso and General Weighted Lasso," Papers 2101.01144, arXiv.org, revised Sep 2021.
    5. Andreas Haupt & Dylan Hadfield-Menell & Chara Podimata, 2023. "Recommending to Strategic Users," Papers 2302.06559, arXiv.org.
    6. Gong, Aibo & Ke, Shaowei & Qiu, Yawen & Shen, Rui, 2022. "Robust pricing under strategic trading," Journal of Economic Theory, Elsevier, vol. 199(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eliaz, Kfir & Spiegler, Ran, 2022. "On incentive-compatible estimators," Games and Economic Behavior, Elsevier, vol. 132(C), pages 204-220.
    2. Ran Spiegler, 2012. "Monopoly pricing when consumers are antagonized by unexpected price increases: a “cover version” of the Heidhues–Kőszegi–Rabin model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(3), pages 695-711, November.
    3. Ariel Rubinstein & Ran Spiegler, 2008. "Money Pumps in the Market," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 237-253, March.
    4. Izquierdo, Segismundo S. & Izquierdo, Luis R., 2022. "Stability of strict equilibria in best experienced payoff dynamics: Simple formulas and applications," Journal of Economic Theory, Elsevier, vol. 206(C).
    5. Srinivas Arigapudi & Yuval Heller & Igal Milchtaich, 2020. "Instability of Defection in the Prisoner's Dilemma Under Best Experienced Payoff Dynamics," Papers 2005.05779, arXiv.org, revised Jan 2021.
    6. Milo Bianchi & Philippe Jehiel, 2019. "Bundling, Belief Dispersion, and Mispricing in Financial Markets," Working Papers halshs-02183306, HAL.
    7. Arigapudi, Srinivas & Heller, Yuval & Milchtaich, Igal, 2021. "Instability of defection in the prisoner's dilemma under best experienced payoff dynamics," Journal of Economic Theory, Elsevier, vol. 197(C).
    8. Bianchi, Milo & Jehiel, Philippe, 2015. "Financial reporting and market efficiency with extrapolative investors," Journal of Economic Theory, Elsevier, vol. 157(C), pages 842-878.
    9. Izquierdo, Segismundo S. & Izquierdo, Luis R., 2023. "Strategy sets closed under payoff sampling," Games and Economic Behavior, Elsevier, vol. 138(C), pages 126-142.
    10. Bianchi, Milo & Jehiel, Philippe, 2020. "Bundlers' dilemmas in financial markets with sampling investors," Theoretical Economics, Econometric Society, vol. 15(2), May.
    11. Ryoji Sawa, 2022. "Statistical Inference in Evolutionary Dynamics," Working Papers e170, Tokyo Center for Economic Research.
    12. Förster, Manuel & Karos, Dominik, 2021. "From prejudice to racial profiling and back. A naἴve intuitive statistician's curse," Center for Mathematical Economics Working Papers 644, Center for Mathematical Economics, Bielefeld University.
    13. Axel Stahmer, 2015. "Fund flows inducing mispricing of risk in competitive financial markets," ESMT Research Working Papers ESMT-15-04, ESMT European School of Management and Technology.
    14. ,, 2006. "Competition over agents with boundedly rational expectations," Theoretical Economics, Econometric Society, vol. 1(2), pages 207-231, June.
    15. Bharat Bhole & Bríd Hanna, 2015. "Word-of-Mouth Communication and Demand for Products with Different Quality Levels," Computational Economics, Springer;Society for Computational Economics, vol. 46(4), pages 627-651, December.
    16. Sawa, Ryoji & Wu, Jiabin, 2023. "Statistical inference in evolutionary dynamics," Games and Economic Behavior, Elsevier, vol. 137(C), pages 294-316.
    17. Szech, Nora, 2011. "Becoming a bad doctor," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 244-257.
    18. Dahremöller, Carsten & Fels, Markus, 2015. "Product lines, product design, and limited attention," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 437-456.
    19. Wisnicki, Bartlomiej, 2022. "Consumer inertia fosters product quality," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    20. Sethi, Rajiv, 2021. "Stable sampling in repeated games," Journal of Economic Theory, Elsevier, vol. 197(C).

    More about this item

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:1810.02888. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.