Sonal Barve

Welcome!

I'm a PhD Economics candidate at the University of California, Santa Barbara. My research uses experimental and applied methods to explore how people make decisions under cognitive limitations, uncertainty, and imperfect knowledge, and how these shape institutional effectiveness and welfare. In my job market paper, I study whether people's mistakes under nonlinear incentives are associated with their failure to understand or identify the decision-making principle of marginal reasoning, or their failure to reliably implement marginal reasoning in practice even when they do identify it.

I design an experiment where participants make choices under different piecewise-linear tax schedules that vary in complexity. I separately measure participants' ability to identify the correct choice rule of marginal reasoning, based on a comprehension test and their procedural explanations, as well as their ability to consistently implement it, based on their error rate in choice.
About half the participants fail to identify the correct choice rule of marginal reasoning and commit high error rates in their choices. However, even those who do understand and identify the correct choice rule make frequent choice errors, that increase significantly with the complexity of the tax schedule and the number of changes in marginal rates.
Both identification failures and implementation failures contribute roughly equally to overall error rates in choice, showing that both channels play an important role in suboptimal behavior.
These findings suggest that debiasing and literacy interventions may be inadequate responses to poor decision-making under complex incentive structures, as even those who understand optimal strategies can struggle to execute them consistently when cognitive demands are high.

I am on the 2025–2026 job market and available for interviews.

Research

Job Market Paper (draft coming soon)

Failures in Marginal Reasoning under Nonlinear Incentives

Despite the central role of marginal reasoning in economic theory, individuals often make mistakes when facing nonlinear incentives. I provide a novel elicitation framework that separately measures subjects' understanding or ability to identify the optimal decision-making rule, and how well they implement it in their choice under piecewise-linear tax schedules. Approximately 57% of subjects correctly identify marginal reasoning as the optimal decision-making rule, a rate stable across different complexity conditions of the schedule. However, average error rates in choice even among such identifiers remain high at nearly 84% and vary with the complexity of the decision-making environment: average error rates are the highest under more jumps in the relevant marginal tax rate combined with more tax brackets in the schedule. In contrast, subjects who fail to identify marginal reasoning as the optimal decision-making rule exhibit a greater average error rate in choice (about 92%) that is insensitive to complexity conditions. Implementation and identification failures each account for approximately half of the overall average choice error rate in the experiment, indicating both mechanisms contribute substantially to suboptimal choice under nonlinear incentives.

Uncertainty and Growing Awareness ▿

This paper analyzes whether the process of expanding awareness affects subsequent beliefs and behavior once awareness is complete. Specifically, the paper examines whether the experience of discovering new outcomes changes how individuals form and act on beliefs about uncertainty over those outcomes when making risky investments. I design a two-part experiment where, in an initial sampling task, participants either discover new possible outcomes gradually (Unawareness condition) or know all possibilities from the outset (Full Awareness condition). In a subsequent investment task, I find that participants who previously experienced a growth in their awareness of outcomes display lower risk aversion than those who did not, even when objective probabilities are clearly revealed. I control for sampling experience and elicited beliefs to isolate the impact of growing awareness from belief heterogeneity. The findings suggest that growing awareness alters confidence and familiarity rather than the underlying probabilistic expectations.

Choosing Incentives (Work in progress)

Weather Variability, Agricultural Productivity, and Farmer Suicides in India Link to Publication ▿

Globalization, commercialization, modernization, erratic climatic conditions, individual expectations, contagion, and government policies are some of the reasons attributed to farmers' suicides. This study hypothesizes that farmer suicides in India are primarily linked to loss in agricultural productivity which in turn is affected by adverse weather and low penetration of irrigation networks. Using panel data of 16 major states in India, from 1996 to 2015 and Control Function (CF) approach, the study shows that keeping all other factors fixed, a one degree rise in temperature results in 4.8% higher farmer suicides through a 3.6% decline in agricultural productivity. Further, the study highlights the significant role played by the contagion factors influencing farmer suicides. The study argues for policy responses that address covariate shocks arising from weather vagaries, price volatility, and liquidity constraint as well as idiosyncratic shocks arising from farmer-specific characteristics.

Teaching Experience

I’ve served as a teaching assistant for eight undergraduate courses across microeconomics, industrial organization, behavioral and experimental economics. My classes have ranged from about 80 students to large cohorts of over 700. I’ve also enjoyed teaching a wide mix of students, from high-schoolers in UCSB's summer research program to advanced undergraduates at UCSB, from different majors and background.

ECON 120 - Urban Economics (Fall 2025)
ECON 187 - Topics in Personnel Economics (Spring 2025)
ECON 116A - Industrial Organization (Fall 2024-Winter 2025)
Summer Research Academy - Strategic Choices: The Power of Behavioral Economic Theory in Explaining Human (Mis)Behavior (Summer 2024)
ECON 10A - Intermediate Microeconomics (Summer 2023)
ECON 150B - Labor Economics (Summer 2022)
ECON 1 - Principles of Economics-Micro (11 quarters)
ECON 2 - Principles of Economics-Macro (2 quarters)