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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 … stock price index, and fuel prices. Our results indicate that greater uncertainty has a negative impact on growth of … non-existent or weaker. Our results suggest that to truly understand the effects of uncertainty on employment dynamics, we …

Persistent link: https://www.econbiz.de/10013043595

Explaining the Favorite-Longshot Bias : Is it Risk-Love or Misperceptions?

Snowberg, Erik - 2011

The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates of the probability of a horse winning - longshots are overbet, while favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet...

Persistent link: https://www.econbiz.de/10013133607

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

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

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

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 diminishing marginal utility of wealth. However, observed choices between risky lotteries are difficult to reconcile with EUM: for example, in the laboratory, subjects' responses on...

Persistent link: https://www.econbiz.de/10012956867

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

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

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

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

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