Recent theoretical and empirical work characterizes attention as a limited resource that decision-makers strategically allocate. There has been less research on the dynamic interdependence of attention: how paying attention now may affect performance later. In this paper, we exploit...

The empirical literature on employer learning assumes that employers learn about unobserved ability differences across workers as they spend time in the labor market. This article describes testable implications that arise from this basic hypothesis and how they have been used to quantify the...

In a simple conceptual framework, we organize a multitude of phenomena related to the (mis)prediction of utility. Consequences in terms of distorted choices and lower wellbeing emerge if people have to trade-off between alternatives that are characterized by attributes satisfying extrinsic...

Education Maintenance Allowance (EMA) was a UK government cash transfer paid directly to children aged 16-18, in the first two years of post-compulsory full-time education. This paper uses the labour supply effect of EMA to infer the magnitude of the transfer response made by the parent, and so...

This paper models child employment and parental pocket money decisions as a non-cooperative game. Assuming that the child human capital is a household public good and that the relationship between child human capital and employment is concave, we compare the welfare obtained under different...

In 30% of young American couples the wife is more educated than the husband. Those women are characterized by a substantially higher employment (all else equal), which in turn amplifies income inequality across couples. Using NLSY79, we formulate and structurally estimate a dynamic life-cycle...

Are people prone to selecting occupations with highly skewed income distributions despite minuscule chances of success? Assembling a comprehensive pool of potential teenage entrants into professional tennis (a typical winner-take-all market), we construct objective measures of relative ability...

This paper extends the job market signaling model of Spence (1973) by allowing firms to learn the ability of their employees over time. Contrary to the model without employer learning, we find that the Intuitive Criterion does not always select a unique separating equilibrium. When the Intuitive...

In this paper we investigate how cognitive ability and character skills influence behavior, success and the evolution of play towards Nash equilibrium in repeated strategic interactions. We study behavior in a p-beauty contest experiment and find striking differences according to cognitive...

This paper analyses the welfare effects of price restrictions on private contracting in a world where agents have a limited cognitive ability. People compute the costs and benefits of entering a transaction with an error. The government knows the distribution of true costs and benefits as well...