This paper observes in which way working hours as well as effort respond to a wage increase and we have full control regarding theworkers´ anticipation of the wage increase.

We analyze the dynamics of neighbourhood watch programs in a local interaction framework. Agents can watch their neighbours' houses and thus deter burglars from breaking in....

This paper shows that a principal's distrust in the voluntary performanceof an agent has a negative impact on the agent's motivation to perform well.

People spend more and more time commuting and often find it a burden. According to economics, the burden of commuting is chosen when compensated either on the labor or on the housing market so that individuals utility is equalized....

The self-employed are substantially more satisfied with their work than employed persons. We document this relationship for 23 countries and show that the higher job satisfaction can directly be attributed to the greater autonomy that self-employed persons enjoy....

People behave pro-socially in a wide variety of situations that standard economic theory is unable to explain. Social comparison is one explanation for such pro-social behavior: people contributeif others contribute or cooperate as well....

Markowitz and Sharpe won the Nobel Prize in Economics more than a decade ago for the development of Mean-Variance analysis and the Capital Asset Pricing Model (CAPM). In the year2002, Kahneman won the Nobel Prize in Economics for the development of Prospect Theory....

Under the assumption of normally distributed returns, we analyzewhether the Cumulative Prospect Theory of Tversky and Kahneman (1992) is consistent with the Capital Asset Pricing Model. We find that in every financial market equilibrium the Security Market Line Theorem holds....

This paper shows that neglecting fairness concerns and decision errors prevents a satisfactory understanding of how competition affects prices.

We examine experimentally how Chief Executive Officers (CEOs) respond to incentives and how they provide incentives in situations requiring trust and trustworthiness.As a control we compare the behavior of CEOs with the behavior of students....