Abstract This study presents results of the validation of an ultra-short survey measure of patience included in the German Socio-Economic Panel (SOEP). Survey responses predict intertemporal choice behavior in incentive-compatible decisions in a representative sample of the German adult population.

We add social norms into Laffont’s mechanism designed for environmental risk. We find with endogenous social norms and asymmetric information about personal norms, the optimal contract induces more (less) effort from the “green” (“brown”) firm.

Hyperbolic discounting with naiveté is widely believed to provide a better explanation than exponential discounting of why people borrow so much and why they wait so long to save for retirement. We reach a different set of conclusions. We show that if financial planning is enriched to include...

We conduct experiments with adolescent participants on repeated fixed play in three different zero-sum games which have mixed strategy minimax solutions. Further, we collect subject information on cognitive abilities and participation rates in competitive activities. We find the adolescents’...

I put forward a concise and intuitive formula for the calculation of the valuation for a good in the presence of the expectation that further, related, goods will soon become available. This valuation is tractable in the sense that it does not require the explicit resolution of the consumer’s...

We let subjects take risky decisions that affect themselves and a passive recipient. Adding a requirement to justify their choices significantly reduces loss aversion. This indicates that such an accountability mechanism may be effective at debiasing loss aversion in agency relations.

We present an alternative explanation of the logit probabilistic choice from the equal likelihood hypothesis without the Gumbel distribution. The hypothesis is that if the total utility values from combinations of actions are the same, all such combinations of actions are equally likely.

In three binary choice problems, people reveal a choice pattern which falsifies expected utility theory and many generalized non-expected utility theories. This new paradox challenges popular non-expected utility models analogously to how the Allais paradox challenged neoclassical expected...

We prove a formula for the computation of optimal financial investments in an expected utility framework with arbitrary (not necessarily concave) utility functions. This extends classical results on optimal financial investments for strictly concave utility functions and is of importance...

In this paper we study how pressure affects individual’s behavior. For this purpose we use sports data, where the attendance is a proxy for pressure, to investigate if the number of fans in the stadium affects the performance of the players. We overcome the reverse causality problem by...