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Prospect Theory and Tax Evasion: A Reconsideration of the Yitzhaki Puzzle

Piolatto, Amedeo; Rablen, Matthew D. - Institute for the Study of Labor (IZA) - 2013

The standard expected utility model of tax evasion predicts that evasion is decreasing in the marginal tax rate (the Yitzhaki puzzle). The existing literature disagrees on whether prospect theory overturns the puzzle. We disentangle four distinct elements of prospect theory and find loss...

Persistent link: https://www.econbiz.de/10010884369

A Parametric Analysis of Prospect Theory's Functionals for the General Population

Booij, Adam S.; Praag, Bernard M. S. van; van de … - Institute for the Study of Labor (IZA) - 2009

This paper presents the results of an experiment that completely measures the utility function and probability weighting function for different positive and negative monetary outcomes, using a representative sample of N = 1935 from the general public. The results confirm earlier findings in the...

Persistent link: https://www.econbiz.de/10005822425

Life Satisfaction, Income and Personality

Proto, Eugenio; Rustichini, Aldo - Institute for the Study of Labor (IZA) - 2015

We use personality traits to better understand the relationship between income and life satisfaction. Personality traits mediate the effect of income on life satisfaction. The effect of neuroticism, which measures sensitivity to threat and punishment, is strong in both the British Household...

Persistent link: https://www.econbiz.de/10011168446

Cognitive Ability, Character Skills, and Learning to Play Equilibrium: A Level-k Analysis

Gill, David; Prowse, Victoria L. - Institute for the Study of Labor (IZA) - 2014

understand better how subjects with different cognitive abilities learn differently, we estimate a structural model of learning … ability to that of character skills, and find that both cognition and personality affect behavior and learning. More agreeable …

Persistent link: https://www.econbiz.de/10010886141

Trust and Trustworthiness under the Prospect Theory: A Field Experiment in Vietnam

Nguyen, Quang; Villeval, Marie Claire; Xu, Hui - Institute for the Study of Labor (IZA) - 2012

We study the influence of risk and time preferences on trust and trustworthiness by conducting a field experiment in Vietnamese villages and by estimating the parameters of the Cumulative Prospect Theory and of quasi-hyperbolic time preferences. We find that while probability sensitivity or risk...

Persistent link: https://www.econbiz.de/10010711936

Reputations, Relationships and the Enforcement of Incomplete Contracts

MacLeod, W. Bentley - Institute for the Study of Labor (IZA) - 2006

This paper discusses the literature on the enforcement of incomplete contracts. It compares legal enforcement to enforcement via relationships and reputations. A number of mechanisms, such as the repeat purchase mechanism (Klein and Leffler (1981)) and efficiency wages (Shapiro and Stiglitz...

Persistent link: https://www.econbiz.de/10005233793

The Roles of Incentives and Voluntary Cooperation for Contractual Compliance

Gächter, Simon; Kessler, Esther; Königstein, Manfred - Institute for the Study of Labor (IZA) - 2011

Efficiency under contractual incompleteness often requires voluntary cooperation in situations where self-regarding incentives for contractual compliance are present as well. Here we provide a comprehensive experimental analysis based on the gift-exchange game of how explicit and implicit...

Persistent link: https://www.econbiz.de/10009149162

Child Labor and Learning

Emerson, Patrick M.; Ponczek, Vladimir; Portela Souza, … - Institute for the Study of Labor (IZA) - 2013

This paper investigates the impact of working while in school on learning outcomes through the use of a unique micro … learning outcomes is addressed through the use of a difference-in-difference estimator and it is shown that the results are … robust. A negative and significant effect of working on learning outcomes in both math and Portuguese is found. The effects …

Persistent link: https://www.econbiz.de/10010884083

The Empirics of Agglomeration Economies

Combes, Pierre-Philippe; Gobillon, Laurent - Institute for the Study of Labor (IZA) - 2014

We propose an integrated framework to discuss the empirical literature on the local determinants of agglomeration effects. We start by presenting the theoretical mechanisms that ground individual and aggregate empirical specifications. We gradually introduce static effects, dynamic effects, and...

Persistent link: https://www.econbiz.de/10010959614

Economic Development, Novelty Consumption, and Body Weight: Evidence from the East German Transition to Capitalism

Dragone, Davide; Ziebarth, Nicolas R. - Institute for the Study of Labor (IZA) - 2015

This paper develops a conceptual framework that can explain why economic development goes along with increases in body weight and obesity rates. We first introduce the concept of novelty consumption, which refers to an increase in food availability due to trade or innovation. Then we study how...

Persistent link: https://www.econbiz.de/10011264784