In a critique of the Loewenstein and Prelec (1992) theory of intertemporal choice, al-Nowaihi and Dhami (2006) point out to four errors. One of the alleged errors was that the value function in prospect theory is decreasing. But it is in fact increasing. We provide a correction and a formal...

The available minimum wage literature, which is mostly based on US evidence, is not very useful for analyzing developing countries, where the minimum wage affects many more workers and labor institutions and law enforcement differ in important ways. The main contribution of this paper is to...

This paper presents new evidence on the effects of the minimum wage using Brazilian monthly household and firm panel data between 1982 and 2000. By examining the effects on wages, employment and prices together we are able to provide an explanation for the small employment effects prevalent in...

It is well established in the literature that minimum wage increases compress the wage distribution. Firms respond to these higher labour costs by reducing employment, reducing profits, or raising prices. While there are hundreds of studies on the employment effect of the minimum wage, there are...

Several minimum wage variables have been suggested in the literature. Such a variety of variables makes it difficult to compare the associated estimates across studies. One problem is that these estimates are not always calibrated to represent the effect of a 10% increase in the minimum wage....

The UK was one of only three countries that granted free movement of workers to accession nationals following the enlargement of the European Union in May 2004. The resulting large, rapid and concentrated migration inflow can be seen as a natural experiment that arguably corresponds closely to...

In a major contributions to behavioral economics, Loewenstein and Prelec (1992) set the foundations for the behavioral approach to decision making over time and derive the generalized hyperbolic discounting formula. Here we show that their assumption ‘common difference effect with quadratic...

In a major contribution, Loewenstein and Prelec (1992) (LP) set the foundations for the behavioral approach to decision making over time. We show that the LP theory is incompatible with two very useful classes of value functions: the HARA class and the constant loss aversion class. Resultingly,...

In one of the major contributions to behavioral economics, Loewenstein and Prelec (1992) set the foundations for the behavioral approach to decision making over time. We correct a number of errors in Loewenstein and Prelec (1992). Furthermore, we provide a correct, more direct and simpler...