Source: Dissertation Abstracts International, Volume: 62-10, Section: A, page: 3513.

Director: Benjamin Polak.

Recent experimental evidence in psychology and neuroscience has established that the principles of similarity and repetition govern the recall process for episodic memories. I use these two principles as building blocks in developing a formal model of memory and explore its economic implications for a wide range of economic and social settings, including political campaigns, news management prior to IPOs, marketing for new products, employee-performance evaluations and public opinion formation.

In chapter 1, What have you done for me lately? Release of Information and Strategic Manipulation of Memories I start by deriving the memory model. I then apply the model to an economic setting, by addressing the issue of how one should time a fixed number of informative events, in order to manipulate the memories that a forgetful assessor will eventually have. I show that the spacing of events is crucial for what agents will remember and I characterize the spacing properties of optimal profiles. The theoretical results translate to normative claims that can be exploited by, among others, politicians involved in election campaigns, advertisers timing the airing of commercial spots, managers controlling the release of corporate news and employees timing their effort prior to a promotion decision.

Chapter 2, extends the model of the first chapter by relaxing the assumption that the agent times a fixed number of events. Instead, the agent can generate events at some cost. Such an extension widens the applicability of the model and it paves the way for future empirical testing of the model. I show that the driving forces behind the two model maybe different, but the following result is true in both models; that favorable past events, possibly stochastic, will make the agent more eager to release more favorable events.

The dissertation concludes with chapter 3, Revising Non-Additive Priors, which considers the problem of updating a convex capacity upon receipt of a signal. Convex capacities arise in decision theory in an effort to model the Ellsberg paradox; the psychological finding that people are overly averse to uncertainty.