Inconsistent time preferences and on-the-job search : when it pays to be naive

Matthias Fahn, Regina Seibel

We study optimal employment contracts for present-biased employees who can conduct on-the-job search. Presuming that firms cannot offer long-term contracts, we find that individuals who are naive about their present bias will actually be better off than sophisticated or time-consistent individuals. Moreover, they search more, which partially counteracts the inefficiencies caused by their present bias.

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Year of publication:	[2019]
Authors:	Fahn, Matthias ; Seibel, Regina
Publisher:	Munich, Germany : CESifo, Center for Economic Studies & Ifo Institute
Subject:	present bias \| on-the-job search \| Suchtheorie \| Search theory \| Intertemporale Entscheidung \| Intertemporal choice \| Arbeitsuche \| Job search \| Systematischer Fehler \| Bias \| Arbeitsmobilität \| Labour mobility

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Extent:	1 Online-Ressource (circa 24 Seiten)
Series:	CESifo working papers. - München : [Verlag nicht ermittelbar], ISSN 2364-1428, ZDB-ID 2065232-X. - Vol. no. 7604 (April 2019)
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	hdl:10419/198964 [Handle]
Classification:	D21 - Firm Behavior ; D83 - Search, Learning, Information and Knowledge ; D90 - Intertemporal Choice and Growth. General ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; J32 - Nonwage Labor Costs and Benefits; Private Pensions
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011996799