In active investment climates where firms sequentially improve each other's products, a patent can terminate either because it expires or because a non-infringing innovation displaces its product in the market. We define the length of time until one of these happens as the effective patent life,...

We examine how principals should design incentives to induce time-inconsistent procrastinating agents to complete tasks efficiently. Delay is costly to the principal, but the agent faces stochastic costs of completing the task, and efficiency requires waiting when costs are high. If the...

Recent models of procrastination due to self-control problems assume that a procrastinator considers just one option and is unaware of her self-control problems. We develop a model where a person chooses from a menu of options and is partially aware of her self-control problems. This menu model...

This paper explores some of the ways that economists can incorporate insights from recent research combining psychology and economics to help understand risky behavior by adolescents.<BR> June 2000<BR> 1 <A HREF="econ/E00-285_fig.pdf">Figure .pdf</A><BR>

JEL#: A12, B49, D11, D91, E21<BR> Keywords: Addiction, consumption, cooling off, misprediction, projection bias, reference dependence<BR> People underappreciate how their own behavior and exogenous factors affect their future utility, and thus exaggerate the degree to which their future preferences...

We outline a strategy for distinguishing rank-dependent probability weighting from systematic risk misperceptions in field data. Our strategy relies on singling out a field environment with two key properties: (i) the objects of choice are money lotteries with more than two outcomes; and (ii)...

We use data on insurance deductible choices to estimate a structural model of risky choice that incorporates "standard" risk aversion (diminishing marginal utility for wealth) and probability distortions. We find that probability distortions - characterized by substantial overweighting of small...