During the last two decades economists have made much progress in understanding incentives, contracts and organisations. Yet, they constrained their attention to a very narrow and empirically questionable view of human motivation. The purpose of this paper is to show that this narrow view of...

Numerous laboratory studies report on behaviors inconsistent with rational economic models. How much do these inconsistencies matter in natural settings, when consumers make large, real decisions and have the opportunity to learn from experiences? We report on a field experiment designed to...

We exploit a natural experiment in which two professionals compete in a one-stage contest without strategic motives and where one contestant has a clear exogenous psychological momentum advantage over the other in order to estimate the causal effect of psychological momentum on performance. We...

This paper synthesizes recent research in economics and psychology on the measurement and empirical importance of personality skills and preferences. They predict and cause important life outcomes such as wages, health, and longevity. Skills develop over the life cycle and can be enhanced by...

This paper synthesizes recent research in economics and psychology on the measurement and empirical importance of personality skills and preferences. They predict and cause important life outcomes such as wages, health, and longevity. Skills develop over the life cycle and can be enhanced by...

A basic principle of economics is that people always prefer a larger set of opportunities. Money illusion can be considered as the phenomenon that people may not perceive correctly their budget constraints, and may act in ways that run counter to this preference. In this view money illusion is a...