This paper tests for reference dependence, using data from Impressionist and Contemporary Art auctions. We distinguish reference dependence based on ‘rule of thumb’ learning from reference dependence based on ‘rational’ learning. Furthermore, we distinguish pure reference dependence from...

The paper develops a public education scheme that takes uncertainty aspects of private educational investments explicitly into account. A case is made for tuition fees, which depend on expected return on investments in education. The consideration of uncertainty provides a neglected link between...

The objective of this paper is to understand the implications for consumption and portfolio choice of the separation of an investor’s risk aversion and elasticity of intertemporal substitution that is made possible by recursive utility, in contrast to expected utility, where the two are...

We analyze social and economic phenomena involving beliefs which people value and invest in, for affective or functional reasons. Individuals are at times uncertain about their own 'deep values' and infer them from their past choices, which then come to define 'who they are'. Identity...

We use data from a television game show, involving elementary lotteries and substantial prize money, as a natural experiment to measure risk attitudes. We find robust evidence of substantial risk aversion. As an extension, we esimate the various models using transformations of the ‘true’...

In this paper we show that if a very small, exogenously given probability of terminating the exchange is introduced in an elementary investment game, reciprocators play more often the defection strategy. Everything happens as if they "hide behind probabilities" in order to break the trust...

Existenzgründer aus Arbeitslosigkeit schaffen nicht nur ihren eigenen Arbeitsplatz, der in vielen Fällen dauerhaft Bestand hat. Häufig geben diese Selbständigen auch weiteren Menschen Arbeit. Wie eine gemeinsame Studie des DIW Berlin und des Instituts für die Zukunft der Arbeit (IZA Bonn)...

Gender-specific patterns of self-selection into competitive and cooperative environments may have multiple reasons. One of the most prominent explanations to this point is, that there are inherent differences between men and women when it comes to preferences regarding competition. We take a...

Demand and capacity fluctuations are common for roads and other congestible facilities. With ongoing advances in pricing technology and ways of communicating information to prospective users, state-dependent congestion pricing is becoming increasingly practical. But it is still rare or...

The Integrated Energy and Climate Protection Program of the German government includes the political target of doubling the share of combined heat and power generation (CHP) in Germany from currently about 12% to 25% by 2020. In order to reach this goal, a new CHP law was enacted to improve the...