We propose a method for estimating household income uncertainty that does not impose restrictions on the underlying income shocks or assumptions about household behaviors. We measure income uncertainty as the variance of linear projection errors at various future horizons, up to 25 years ahead,...

We empirically investigate the effect of uncertainty on corporate hiring. Using novel data from the labor market for MBA graduates, we show that uncertainty regarding how well job candidates fit with a firm’s industry hinders hiring, and that firms value probationary work arrangements that...

In functional magnetic resonance imaging (FMRI) research, nucleus accumbens (NAcc) activation spontaneously increases prior to financial risk taking. Since anticipation of diverse rewards can increase NAcc activation, even incidental reward cues may influence financial risk-taking. Using...

Investors systematically deviate from rationality when making financial decisions, yet the mechanisms responsible for these deviations have not been identified. Using event-related fMRI, we examined whether anticipatory neural activity would predict optimal and suboptimal choices in a financial...

Recent research in neuroeconomics suggests that the same brain areas that generate emotional states are also involved in the processing of information about risk, rewards and punishments. These findings imply that emotions may influence financial decisions in a predictable and parsimonious way....

We examine whether private feedback about relative performance can mitigate moral hazard in competitive environments by modifying the agents' self-esteem. In our experimental setting, people work harder and expect to rank better when told that they may learn their ranking, relative to cases when...

We investigate whether public opinion influences the level and structure of executive compensation. During 1992-2008, the negativity of press coverage of chief executive officer (CEO) pay varied significantly, with stock options being the most criticized pay component. We find that after more...

We inquire whether public opinion influences executive compensation. During 1992-2008 the negativity of press coverage of CEO pay varied significantly, with stock options being the most discussed pay component. We find that after more negative press coverage of CEO pay firms reduce option grants...

The goal of this study is to ask whether investors learn differently from gains (positive news) versus losses (negative news), whether learning performance is better or worse when people are actively investing in a security or passively observing the security’s payoffs, and whether there are...

This paper proposes and tests empirically a model of optimal job search using novel data on job seeking strategies of participants in the labor market for MBA graduates. Theoretically and empirically I find that the breadth of search that workers conduct depends on their ability, outside option,...