We use natural experiments - plausibly exogenous, anticipated increases in the piece rate - to study how effort responds to incentives. Our first finding, like some previous studies, lends little support to the view that incentives increase effort: raising the piece rate has zero effect on total...

Economists are increasingly interested in how group membership affects individual behavior. The standard method assigns individuals to “minimal” groups, i.e. arbitrary labels, in a lab. But real groups often involve social interactions leading to social ties between group members. Our...

Traditionally, models of economic decision-making assume that individuals are rational and emotionless. This chapter argues that the neglect of emotion in economic models explains their inability to predict important aspects of the labor market. We focus on one example: the scarcity of nominal...

Traditionally, models of economic decision-making assume that individuals are rational and emotionless. This chapter argues that the neglect of emotion in economic models explains their inability to predict important aspects of the labor market. We focus on one example: the scarcity of nominal...

This chapter argues that the neglect of emotion in economic models explains their inability to predict important aspects of the labor market. We focus on one example: firms frequently cut real wages, increasing nominal wages by less than the inflation rate, but they very seldom cut nominal...

Economists are increasingly interested in how group membership affects individual behavior. The standard method assigns individuals to "minimal" groups, i.e. arbitrary labels, in a lab. But real group often involve social interactions leading to social ties between group members. Our experiments...

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.