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Uncertainty and the Employment Dynamics of Small and Large Businesses
Ghosal, Vivek - 2014
We examine the impact of uncertainty on employment dynamics. Alternative measures of uncertainty are constructed based on the survey of professional forecasters, and regression-based forecasting models for GDP growth, inflation, S&P500 stock price index, and fuel prices. Our results indicate...
Persistent link: https://www.econbiz.de/10013043595
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Explaining the Favorite-Longshot Bias : Is it Risk-Love or Misperceptions?
Snowberg, Erik - 2011
this phenomenon focus on rational gamblers who overbet longshots due to risk-love. The competing behavioral explanations …
Persistent link: https://www.econbiz.de/10013133607
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Expectations as Reference Points : Field Evidence from Experienced Subjects in a Competitive, High-Stakes Environment
Bartling, Björn - 2012
We show that professional soccer players exhibit reference-dependent behavior during matches. Controlling for the state of the match and for unobserved heterogeneity, we show on a minute-by-minute basis that a player breaches the rules of the game, measured by the referee's assignment of cards,...
Persistent link: https://www.econbiz.de/10013105143
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Poverty and Welfare Measurement on the Basis of Prospect Theory
Jantti, Markus - 2013
This paper examines the measurement of social welfare, poverty and inequality taking into account reference-dependence, loss aversion and diminishing sensitivity — aspects emphasized in Prospect Theory — to social welfare measurement. We suggest a new notion of equivalent income, the income...
Persistent link: https://www.econbiz.de/10013086978
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Loss Aversion and Ex Post Inefficient Renegotiation
Herweg, Fabian - 2013
We propose a theory of ex post inefficient renegotiation that is based on loss aversion. When two parties write a long-term contract that has to be renegotiated after the realization of the state of the world, they take the initial contract as a reference point to which they compare gains and...
Persistent link: https://www.econbiz.de/10013089184
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Risk Aversion as a Perceptual Bias
Khaw, Mel - 2017
The theory of expected utility maximization (EUM) proposed by Bernoulli explains risk aversion as a consequence of … from the terms offered; and subjects often appear to be too risk averse with regard to small gambles (while still accepting … from judgments based on imprecise (and noisy) mental representation of the decision situation. In this model, risk aversion …
Persistent link: https://www.econbiz.de/10012956867
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Going Green : Framing Effects in a Dynamic Coordination Game
Gerlagh, Reyer - 2015
We experimentally study decision-making in a novel dynamic coordination game. The game captures features of a transition between externality networks. Groups consisting of three subjects start in a stable benchmark equilibrium with network externality. Over seven rounds, they can transit to an...
Persistent link: https://www.econbiz.de/10013009866
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Charitable Giving and Nonbinding Contribution-Level Suggestions Evidence from a Field Experiment
Adena, Maja - 2014
When asking for donations, charitable organizations often use suggestions concerning the amount of potential contributions. In our randomized field experiment, opera visitors received solicitation letters asking to support a social youth project organized by the opera house. The three different...
Persistent link: https://www.econbiz.de/10013057248
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Do People Anticipate Loss Aversion?
Imas, Alex - 2015
There is growing interest in the use of loss contracts that offer performance incentives as upfront payments that employees can lose. Standard behavioral models predict a tradeoff in the use of loss contracts: employees will work harder under loss contracts than under gain contracts; but,...
Persistent link: https://www.econbiz.de/10013024372
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Auctions vs. Negotiations : The Effects of Inefficient Renegotiation
Herweg, Fabian - 2015
For the procurement of complex goods the early exchange of information is important to avoid costly renegotiation ex post. We show that this is achieved by bilateral negotiations but not by auctions. Negotiations strictly outperforms auctions if sellers are likely to have superior information...
Persistent link: https://www.econbiz.de/10013024680