Empirical evidences show that investors tend to be biased toward investing indomestic (home bias) and local (local bias) stocks. Familiarity is considered to be one of thereasons. A similar concept was proposed by Goldstein and Gigerenzer (1999, 2002), known asthe recognition heuristic: “when...

A small lie appears trivial but it obviously violates moral commandments. We analyze whetherthe preference for others’ truth telling is absolute or depends on the size of a lie. In a laboratoryexperiment we compare punishment for different sizes of lies controlling for the resultingeconomic...

This paper deals with the relationship between management quality, firm size, and managerial compensation.

We exploit a universe dataset of state school students in England with linkedtest score records to document the evolution of attainment through school fordifferent ethnic groups. The analysis yields a number of striking findings. First,we show that, controlling for personal characteristics, all...

Truancy is often seen as irrational behaviour on the part of school ageyouth. This paper takes the opposite view and models truancy as thesolution to a time allocation problem in which youths derive currentreturns from activities that reduce time spent at school. The model isestimated using a US...

In a large-scale laboratory experiment, we investigate whether subjects’ scores on the cognitivereflection test (CRT) are related to their susceptibility to the base rate fallacy, the conservatismbias, overconfidence, and the endowment eect.

How valuable is education for entrepreneurs’ performance as compared to employees’?What might explain any differences? And does education affect peoples’ occupationalchoices accordingly? We answer these questions based on a large panel of US labor forceparticipants. We show that education...

There is a large body of evidence supporting the notion that a) those who grow up to be patient(forward-looking) do better in life compared to those who do not, and b) parents can inculcatethe virtue of delayed gratification in their children by taking the right sort of actions. We studya...