faculty photo

Daniel Martin

daniel [at] martinonline.org

Wilcox Family Chair in Entrepreneurial Economics
Associate Professor in the Department of Economics
Director, Laboratory for the Integration of Theory and Experimentation (LITE)
Affiliate Faculty, Mellichamp Initiative in Mind and Machine Intelligence
University of California, Santa Barbara

Associate Professor (on leave)
Managerial Economics & Decision Sciences (MEDS)
Kellogg School of Management, Northwestern University


I am a behavioral, cognitive, and experimental economist who studies attention and perception (how information is processed) and information disclosure (how information is communicated). My current research explores how human and AI interactions are impacted by attention, perception, and information disclosure.

Before receiving a PhD in Economics from NYU, I was the co-founder of a small business that is now one of the leading providers of IT services to small and medium-sized businesses in the Carolinas. At UCSB I teach undergraduate courses on entrepreneurship and behavioral economics and PhD courses on attention and perception.

Recent working papers

AI Oversight and Human Mistakes: Evidence from Centre Court (with David Almog, Romain Gauriot, and Lionel Page)
Summary: We provide the first field evidence this AI oversight carries psychological costs that can impact human decision-making. We investigate one of the highest visibility settings in which AI oversight has occurred: the Hawk-Eye review of umpires in top tennis tournaments.
     Topics: Attention and Perception. Methods: Revealed Preference.
     Latest version: February 2024
     Coverage: The Economist

Modeling Machine Learning: A Cognitive Economic Approach (with Andrew Caplin and Philip Marx)
Summary: We show that cognitive economic methods can be applied to machine learning. As a demonstration, we apply our approach to an influential deep learning convolutional neural network that predicts pneumonia from chest X-rays.
     Topics: Attention and Perception. Methods: Experiments, Revealed Preference.
     Latest version: January 2024
     Previous working paper: NBER Working Paper 30600

Rational Inattention in Games: Experimental Evidence (with David Almog)
Summary: To investigate whether attention responds rationally to strategic incentives, we experimentally implement a buyer-seller game in which a fully informed seller makes a take-it-or-leave-it offer to a buyer who faces cognitive costs to process information about the offer's value.
     Topics: Attention and Perception. Methods: Experiments, Revealed Preference.
     Latest version: November 2023
     Previous working paper: SSRN Working Paper 2674224

Perceptions and Detection of AI Use in Manuscript Preparation for Academic Journals (with Nir Chemaya)
Summary: The emergent abilities of Large Language Models (LLMs) have produced both excitement and worry about how AI will impact academic writing. We investigate whether academics view it as necessary to report AI use in manuscript preparation and how detectors react to the use of AI in academic writing.
     Topics: Information Disclosure. Methods: Experiments.
     Latest version: November 2023

Rationalizable Learning (with Andrew Caplin and Philip Marx)
Summary: What can an analyst infer from choice data about what a decision maker has learned? The key constraint we impose, which is shared across models of Bayesian learning, is that any learning must be rationalizable.
     Topics: Attention and Perception. Methods: Revealed Preference.
     Latest version: July 2023

Published, forthcoming, and accepted papers

1) Search and Satisficing (with Andrew Caplin and Mark Dean) [Appendix and Instructions]
American Economic Review, 2011
Summary: We develop a search-theoretic choice experiment to study the impact of incomplete consideration on choice quality. We find that decisions can be understood using the satisficing model of Herbert Simon.
     Topics: Attention and Perception. Methods: Experiments, Revealed Preference.
     Replication resources: Data and Analysis Files

2) A Testable Theory of Imperfect Perception (with Andrew Caplin)
The Economic Journal, 2015
Summary: We introduce “state-dependent stochastic choice data” and an axiom called “No Improving Action Switches” (NIAS) that characterizes the choice behavior of an agent with private information about states of the world.
     Topics: Attention and Perception. Methods: Revealed Preference.
     Previous working paper: NBER Working Paper 17163 (Additional: experimental test of the model)
     Previous working paper: Framing Effects and Optimization (Additional: application to framing effects)

3) Measuring Rationality with the Minimum Cost of Revealed Preference Violations (with Mark Dean) [Appendix]
Review of Economics and Statistics, 2016
Summary: We offer a new measure of how close a set of choices is to satisfying the observable implications of preference maximization and apply it to a large, balanced panel of household level consumption data.
     Topics: Behavioral Welfare Economics. Methods: Revealed Preference.
     Replication resources: Data and Analysis Files, Updated MCI Files, MCI Source Code
     Previous working paper: Testing for Rationality with Consumption Data (Additional: test of preference homogeneity)
     Previous working paper: How Rational are your Choice Data? (Additional: experiment, number of preferences)
     Alternative (recommended) method for calculating MCI: Demuynck and Rehbeck (2021)

4) The Dual-Process Drift Diffusion Model: Evidence from Response Times (with Andrew Caplin)
Economic Inquiry, 2016
Summary: We propose a model of response time and choice that borrows from dual-process models and the drift diffusion model. We conduct a simple experiment in which our hybrid model matches key properties of the data.
     Topics: Attention and Perception. Methods: Experiments.
     Replication resources: Data and Analysis Files

5) Strategic Pricing with Rational Inattention to Quality
Games and Economic Behavior, 2017
Summary: I study how sellers set prices when facing buyers who are "rationally inattentive" to information about product quality, both sophisticated buyers and naive buyers who are rationally inattentive to their strategic beliefs.
     Topics: Attention and Perception. Methods: Game Theory.
     Previous working paper: First version (Additional: experimental test of the model)

6) Defaults and Attention: The Drop Out Effect (with Andrew Caplin) [Appendix]
Revue Économique, 2017
Summary: We measure the drop out effect — where a default option is accepted with little regard for personal suitability — in an experiment using response time as a proxy for attention. We find this can offset benefits of high quality defaults.
     Topics: Attention and Perception. Methods: Experiments.
     Previous working paper: NBER Working Paper 17988 (Additional: “drop outs” in an active choice setting)

7) What Do Consumers Learn from Regulator Ratings? Evidence from Restaurant Hygiene Quality Disclosures (with Tami Kim) [Appendix]
Journal of Economic Behavior & Organization, 2021
Summary: Using online experiments, we provide evidence that there are two pathways through which individuals extract the information contained in regulator ratings: inference about the relative implications of a rating and inference about the absolute implications of a rating.
     Topics: Information Disclosure. Methods: Experiments.
     Coverage: Kellogg Insight

8) Is No News (Perceived As) Bad News? An Experimental Investigation of Information Disclosure (with Ginger Jin and Michael Luca)
AEJ: Microeconomics, 2021 AEJ: Micro Best Paper Award
Summary: We use laboratory experiments to directly test the forces that drive disclosure theory. We find a fundamental breakdown in the logic of unraveling: receivers are insufficiently skeptical about undisclosed information.
     Topics: Information Disclosure. Methods: Experiments.
     Replication resources: Data and Analysis Files, Instructions for Additional Tasks
     Previous working paper: NBER Working Paper 21099
     Coverage: Vox EU, HBS Working Knowledge

9) Predictive Power in Behavioral Welfare Economics (with Elias Bouacida)
Journal of European Economics Association, 2021
Summary: Is it necessary to impose model structure in order to provide precise welfare guidance based on inconsistent choices? We address this question empirically by evaluating the predictive power of two behavioral welfare relations.
     Topics: Behavioral Welfare Economics. Methods: Revealed Preference.

10) Comparison of Decisions under Unknown Experiments (with Andrew Caplin) [GitHub Repository]
Journal of Political Economy, 2021
Summary: We provide a necessary and sufficient condition that identifies when every experiment consistent with one set of decisions has a higher value of information than every experiment consistent with the other set of decisions.
     Topics: Attention and Perception, Behavioral Welfare Economics. Methods: Revealed Preference.
     Previous working paper: Framing, Information, and Welfare (Additional: application to informational framing)
     Previous working paper: Framing as Information Design

11) Complex Disclosure (with Ginger Jin and Michael Luca) [Appendix]
Management Science, 2022 Featured Article
Summary: Using lab experiments, we implement a game of mandatory disclosure where senders are required to report their private information truthfully, but can choose how complex to make their reports. We find senders use complex disclosure over half the time.
     Topics: Attention and Perception, Information Disclosure. Methods: Experiments.
     Replication resources: Data and Analysis Files
     Coverage: Management Science Review

12) A Robust Test of Prejudice for Discrimination Experiments (with Philip Marx)
Management Science, 2022 Fast Track
Summary: We show that if average outcomes in a discrimination experiment satisfy simple conditions, then this provides evidence that decision-makers are prejudiced, regardless of what they learned about individuals.
     Topics: Attention and Perception. Methods: Experiments, Revealed Preference.
     Replication resources: Data and Analysis Files

13) Cognitive Costs and Misperceived Incentives: Evidence from the BDM Mechanism (with Edwin Munoz-Rodriguez) [Appendix]
European Economic Review, 2022
Summary: We model agents as paying a cognitive cost to improve their understanding of the BDM's incentives and find experiment evidence in line with this model, suggesting that misperceptions respond to both the costs and benefits of better understanding these incentives.
     Topics: Attention and Perception. Methods: Experiments.
     Replication resources: Data and Analysis Files
     Previous working paper: Misperceiving Mechanisms: Imperfect Perception and the Failure to Recognize Dominant Strategies