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. I'm currently on the job market.
In my job market paper, I study whether people's mistakes under nonlinear incentives
are associated with their lack of knowledge of the decision-making
principle of marginal reasoning, or their failure to reliably implement/execute it in practice, even when they do know it.
- I run an experiment where participants make choices under piecewise-linear tax schedules that range from simpler to more complex. The schedules vary in how many brackets there are and in how many different marginal rates matter for the decision. I measure (i) whether people know the right decision rule and (ii) how accurately they apply it in choices.
- Knowing the right rule is uncommon even with full information about the schedule. Only about 1 in 5 participants answer all rule-knowledge questions correctly.
- Mistakes remain large even among participants with perfect knowledge of marginal reasoning. In the data, most of the average error in choice persists within the perfect rule-knowledge group, suggesting difficulties of implementing the correct rule out reliably.
- Complexity of the choice environment changes how predictive rule-knowledge is for performance. In the very simplest and very hardest environments, those with perfect knowledge and those with imperfect knowledge of the correct choice rule look similar in their error distributions, while in the mixed environments the gap between the two groups is much clearer.
Research
Job Market Paper (Link to draft)
Failures in Marginal Reasoning under Nonlinear Incentives
Despite the central role of marginal reasoning in economic theory, individuals frequently make mistakes under nonlinear incentives. I develop an elicitation framework that separates subjects' rule-knowledge of the optimal marginal decision rule from their implementation of that rule in a choice task over piecewise-linear tax schedules. In a 2x2 experiment, I vary schedule complexity along two dimensions. The first is bracket count, with two versus five total brackets. The second is slope count, with one versus two marginal-rate segments relevant for the incremental choice. Perfect rule-knowledge is rare even in this fully informed setting, as only 21.2% of subjects answer all rule-knowledge questions correctly. At the same time, error levels remain high even among rule-knowers, since 86.3% of the overall mean deviation from the true marginal tax rate persists within the perfect rule-knowledge group, consistent with implementation frictions. Complexity primarily reshapes how informative rule-knowledge is for predicting performance. The separation between the error distributions of perfect and imperfect rule-knowledge subjects is minimal in the two extreme environments but large in the mixed environments. Together, the results highlight distinct cognitive channels through which nonlinear incentive complexity impedes optimal behavior, namely limited rule-knowledge and imperfect implementation.
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.
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)