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CEIS: CENTRE FOR ECONOMIC & INTERNATIONAL STUDIES
Marianna Brunetti - Director "A Foundation for Universalisation in Games" 
CEIS Working Paper No. 603 ENRICO MATTIA SALONIA, University of Toulouse Capitole - Toulouse School of Economics
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I study the behaviour of individuals who have preferences for universalisation. When considering a course of action, they evaluate the consequence that would occur if everyone else acted equivalently, according to some criterion of equivalence. That is, they universalise their behaviour. I develop and axiomatise a model for individuals who value their choices in light of the consequences they induce when their action is universalised. The key behavioural prediction is that the independence axiom is satisfied only among actions that are universalised equivalently. I impose conditions to single out the most prominent models of universalisation, compare them, highlight and arguably overcome their limitations. I propose a unifying model of universalisation inspired by the equal sacrifice principle. "New Keynesian Models, Puzzles and Omitted Effects"
CEIS Working Paper No. 604 FRANCESCO MORELLI, Link Campus University
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The modern macroeconomic debate grapples with explaining complex phenomena, often giving rise to theoretical and empirical puzzles. In response, New Keynesian models have evolved, incorporating frictions and agent heterogeneity, leading to the development of TANK and HANK frameworks. However, increasing model complexity does not always clarify underlying causes. This work introduces a New Keynesian model with Omitted Effects, incorporating previously unaccounted-for variables into agents' objective functions. Similar to Omitted Variable Bias in econometrics, neglecting key variables in a general equilibrium setting leads to model misspecification and puzzling anomalies. The study follows both theoretical and empirical approaches: first, demonstrating how Omitted Effects address the Forward Guidance Puzzle and the consumption response to government spending; second, using an algorithm to identify omitted variables that improve model fit to US data. Empirical findings highlight the crucial role of real wages, inflation, and income Omitted Effects in resolving key macroeconomic inconsistencies. This framework enhances DSGE models' flexibility, providing a systematic tool to refine economic modeling and deepen the understanding of macroeconomic dynamics. "Catastrophic Risk Perception and the Shared Burden Effect: An Experimental Study Using Prospect Theory"
CEIS Working Paper No. 605 RICCARDO MANGHI, affiliation not provided to SSRN
DANIELA DI CAGNO, LUISS, Rome
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This study investigates individual differences in catastrophic risk perception using Cumulative Prospect Theory (CPT) through a laboratory experiment. The choice of CPT allows us to introduce a basic "addendum" to traditional EUT evaluations of these kinds of risks. We analyze the drivers of risk perception through a laboratory measure of CPT based on experimental data, where possible drivers include sociodemographic factors, psychological characteristics, and psychometric variables such as past experience. We define in this setting an interesting aspect that is a peculiar characteristic of extreme risks: the so-called shared burden effect, where individuals perceive the same risks as less severe if they affect a larger share of the collectivity. External validity is provided by examining whether laboratory-elicited risk perception predicts real-world extreme risk assessments. | | ^top
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