This paper analyzes the impact of the German autobahn net on the economic performance of German regions. To address endogeneity and reverse causation problems, we use historical instrument variables, i.e. a plan of the railroad net in 1890 and a plan of the autobahn net in 1937. We find a...

Positive and negative feelings were central to the development of economics, especially in utility theory in classical economics. While neoclassical utility theory ignored feelings, behavioral economics more recently reintroduced feelings in utility theory. Beyond feelings, economic theorists...

Standard economics omits the role of narratives (the stories that people tell themselves and others) when they make all kinds of decisions. Narratives play a role in understanding the environment; focusing attention; predicting events; motivating action; assigning social roles and identities;...

This paper reviews several traditions in economic research on preferences as well as research on personality traits in personality psychology and lists challenges in both fields. We discuss challenges regarding the measurement of preferences and personality traits, challenges regarding the...

Evidence that women are less likely to opt into competitive compensation schemes in the laboratory has generated speculation that a gender difference in competitiveness contributes to the gender wage gap. Using data from the NLSY79 and NLSY97, we show that women are less likely to be employed in...

The authors analyze gender differences in fairness perceptions of own wages and subsequent wage growth. The main finding is that women perceive their wage more often as fair if controls for hourly wage rates, individual and job-related characteristics are taken into account. Furthermore, the...

Self-administered rewards are ubiquitous. They serve as incentives for personal accomplishments and are widely recommended as tools for overcoming self-control problems. However, it seems puzzling why self-rewards can work: the prospect of a reward has a motivating force only if the threat of...

Goals are an important source of motivation. But little is known about why and how people set them. We address these questions in a model based on two stylized facts from psychology and behavioral economics: i) Goals serve as reference points for performance. ii) Present-biased preferences...

A vast literature has investigated the relationship between trust and aggregate economic performance. We investigate the relationship between individual trust and individual economic performance. We find that individual income is hump-shaped in a measure of intensity of trust beliefs available...