We use a natural experiment in Denmark to test the hypothesis that aspiring entrepreneurs face financial constraints because of low entrepreneurial quality. We identify 304 constrained entrepreneurs who start a business after receiving windfall wealth and examine the performance of these...

We use a natural experiment to investigate the impact of participation constraints on individuals' decisions to invest in the stock market. Unexpected inheritance due to sudden deaths results in exogenous variation in financial wealth and allows us to examine whether fixed entry and ongoing...

Previous work on board size effects in closely held corporations has established a negative correlation between board size and firm performance. We argue that this work has been incomplete in analysing the causal relationship due to lack of ownership information and weak identification...

We study whether investors perceive responsible investments (i.e., investments in assets with environmental or social benefits) as luxury goods. We exploit windfall wealth due to inheritance from parental death to obtain plausibly exogenous variations in wealth. We show that windfall wealth...

The most popular models of decision making use a single criteria to evaluate projects or lotteries. However, decision makers may actually consider multiple criteria when evaluating projects. We consider a dual criteria model from psychology. This model integrates the familiar tradeoffs between...

Subjective beliefs play a role in many economic decisions. There is a large theoretical literature on the elicitation of beliefs, and an equally large empirical literature. However, there is a gulf between the two. The theoretical literature proposes a range of procedures that can be used to...

We make the case that psychologists should make wider use of econometric methods for the estimation of structural models. These methods involve the development of maximum likelihood estimates of models, where the likelihood function is tailored to the structural model. In recent years these...

Subjective probabilities play a role in many economic decisions. There is a large theoretical literature on the elicitation of subjective probabilities, and an equally large empirical literature. However, there is a gulf between the two. The theoretical literature proposes a range of procedures...

Experimental data exhibit considerable individual heterogeneity. We review the econometric methods employed to characterize that heterogeneity. We pay particular attention to the trade-off between collecting and allowing for observable characteristics, such as the familiar demographics, and the...