This paper proposes a model of cabdrivers' labor supply, building on Henry S. Farber's (2005, 2008) empirical analyses and Botond Kőszegi and Matthew Rabin's (2006; henceforth “KR”) theory of reference-dependent preferences. Following KR, our model has targets for hours as well as income,...

quot;...professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the...