physical appearance and wages do blondes have more fun abstract this study contributes to the economics literature that links physical characteristics to labour market outcomes by investigating the influence of hair colour on women s own wages and also their spouse s wages using u s panel data we find that blonde women receive large wage premiums

empathy or antipathy the impact of diversity mixing across ethnic and class lines could potentially either spur understanding or inflame tensions between groups we find that white students at a large state university who were randomly assigned african american roommates in their first year are more likely to endorse affirmative action policies several years later whites who were randomly assigned black roommates are also more likely to say they have more personal contact with and interact more comfortably with members of minority groups whites who were assigned either black or low income roommates are more likely to view a diverse student body as essential for a high quality education students become less supportive of higher taxes for the wealthy when assigned roommates from high income families and they appear more likely to volunteer when assigned roommates from low income families taken together these results suggest that students become more empathetic with the social groups to which their roommates belong

group reputations stereotypes and cooperation in a repeated labor market reputation effects and other regarding preferences have both been used to predict cooperative outcomes in markets with inefficient equilibria existing reputation building models require either infinite time horizons or publicly observed identities but cooperative outcomes have been observed in several moral hazard experiments with finite horizons and anonymous interactions this paper introduces a full reputation equilibrium fre with stereotyping perceived type correlation in which cooperation is predicted in early periods of a finitely repeated market with anonymous interactions new experiments generate results in line with the fre prediction including final period reversions to stage game equilibrium and non cooperative play under unfavorable payoff parameters

the economic value of teeth abstract this paper examines the effect of oral health on labor market outcomes by exploiting variation in fluoridated water exposure during childhood the politics surrounding the adoption of water fluoridation by local governments suggests exposure to fluoride is exogenous to other factors affecting earnings exposure to fluoridated water increases women s earnings by approximately 4 percent but has no detectable effect for men furthermore the effect is largely concentrated amongst women from families of low socioeconomic status we find little evidence to support occupational sorting statistical discrimination and productivity as potential channels with some evidence supporting consumer and possibly employer discrimination

natural groups and economic characteristics as driving forces of wage discrimination we investigate whether the origin of an employee provides different motives for wage discrimination in gift exchange experiments with students and migrant workers in china in a lab and an internet experiment subjects in the role of employers can condition their wages on the employees home provinces the resulting systematic differences in wages can be linked to natural groups and economic characteristics of the provinces in group favoritism increases wages for employees who share the same origin as the employer while an increased probability of being matched with an employee with a different ethnicity reduces wages furthermore wages in the laboratory increase with the actual wage level in the employees home province nevertheless employees effort is not influenced by these variables only the wage paid in the experiment influences effort

ethnic discrimination evidence from china abstract we study the role of ethnicity in experimental labor markets where employers determine wages of workers who perform a real effort task this task requires a true skill which we show is not affected by minority status in some treatments we provide subtle priming to employers about minority status of workers as commonly depicted on chinese hukou identification system we conduct our experiments at two sites located in provinces that differ by their historical shares of ethnic groups in the population we find that 1 han and minority workers are equally productive in both provinces 2 in the diverse province there is no difference in the wages between han and minority workers 3 in the non diverse province minority workers receive 4 7 lower wages than han workers

gift exchange and the separation of ownership and control abstract numerous gift exchange experiments have found a positive wage effort relationship in almost all these experiments the employer both owns and controls the firm this paper explores to what extent the separation of ownership and control affects the wage effort relationship we compare the standard bilateral gift exchange game between an owner manager and a worker with two trilateral ones where the firm is owned by a shareholder and controlled by a manager the wage effort relationship is similar in all three situations most strikingly workers reward higher wages with higher effort even when the manager does not share in the firm s profits

sick pay provision in experimental labor markets sick pay is a common provision in most labor contracts this paper employs an experimental gift exchange environment to explore two related questions using both managers and undergraduates as subjects first do workers reciprocate sick pay in the same way as they reciprocate wage payments second do firms benefit from offering sick pay firms may benefit in two different ways directly from workers reciprocating higher sick pay with higher efforts and indirectly from self selection of reciprocal workers into contracts with higher sick pay our main finding is that the direct effect is rather weak in terms of effort and negative in terms of profits however when there is competition among firms for workers sick pay can become an important advantage consequently competition leads to a higher provision of sick pay relative to a monopsonistic labor market

beauty and the labor market the authors examine the impact of looks on earnings using interviewers ratings of respondents physical appearance plain people earn less than average looking people who earn less than the good looking the plainness penalty is 5 to 10 percent slightly larger than the beauty premium effects for men are at least as great as for women unattractive women have lower labor force participation rates and marry men with less human capital better looking people sort into occupations where beauty may be more productive but the impact of individuals looks is mostly independent of occupation suggesting the existence of pure employer discrimination copyright 1994 by american economic association

intergenerational linkages in consumption behavior consumption is partly a social activity yet most studies of consumer behavior treat households in isolation we investigate familial relationships in consumption patterns using a sample of parents and their children from the panel study of income dynamics we nd a positive and statistically signi cant parent speci c eect on children s consumption even after controlling for the eect of parental income and we nd similar eects for sibling pairs child consumption responds negatively to large post retirement shortfalls in consumption of the parents this behavior holds up even after allowing for the possibility of smaller parent to child transfers made necessary by the parental consumption shortfalls these results suggest that although income is an important source of the intergenerational correlation parental choices and experiences also aect consumption behavior of the children

fair wages and effort provision combining evidence from a choice experiment and a field experiment the presence of workers who reciprocate higher wages with greater effort can have important consequences for firms and labor markets knowledge about the extent and determinants of reciprocal effort choices is however incomplete we investigate the role of fairness perceptions and social preferences in a field experiment in which workers were hired for a one time job we show that workers who perceive being underpaid at the base wage increase their performance if the hourly wage increases whereas those who feel adequately paid or overpaid at the base wage do not change their performance moreover we find that only the workers who display reciprocity in a choice experiment show reciprocal effort responses in the field the workers who lack reciprocity in the choice experiment do not respond to the wage increase even if they feel underpaid at the base wage our findings suggest that fairness perceptions and social preferences are key in workers performance response to wage increases in our study the wage increase affects effort mainly through the removal of perceived unfairness i e the elimination of negative reciprocity toward the firm rather than positive reciprocity these results are the first direct evidence of the fair wage effort hypothesis in the field and also help interpret previous contradictory findings in the literature data as supplemental material are available at http dx doi org 10 1287 mnsc 2014 1970 this paper was accepted by uri gneezy behavioral economics

competitiveness through management of diversity effects on stock price valuation this study s premise is that firms that can lower their costs and enhance their differentiation through the effective management of their human resources have a competitive advantage using data fr

mandatory sick pay provision a labor market experiment the question whether a minimum rate of sick pay should be mandated is much debated we study the effects of this kind of intervention in an experimental labor market that is rich enough to allow for moral hazard adverse selection and crowding out of good intentions to occur we find that higher sick pay is reciprocated by workers through higher effort but only if sick pay is not mandated we also study adverse selection effects when workers have different probabilities of getting sick and can reject the hypothesis that this leads to market breakdown overall we find that mandating sick pay actually leads to a higher voluntary provision of sick pay by firms

household saving micro theories and micro facts in this survey we review the recent theoretical and empirical literature on household saving and consumption the discussion is structured around a list of motives for saving and how well the standard theory captures these motives we show that almost all of the motives for saving that have been suggested in the informal saving literature can be captured in the standard optimizing model particular attention is given to recent work on the precautionary motive and its implications for saving and consumption behavior we also discuss the behavioral or psychological approach that eschews the use of standard optimization techniques and focuses instead on direct consideration on saving we provide a section on facts who save and how much we then discuss informally the recent decline in the u s saving rate and whether the theory is of much use in understanding this and other changes in aggregate saving rates over time we do not find any convincing explanation for the change in saving rates we also discuss some analyses of saving behavior over the life cycle addressing such questions as whether households save enough for retirement and whether the consumption patterns of older households can be rationalized within a simple life cycle model we also review a great number of studies of the consumption euler equations based on our analysis of the studies cited we conclude that there is still mixed evidence that consumption is excessively sensitive to income we also examine in depth the recent empirical literature on the precautionary motive we conclude that although some households do seem to have a significant precautionary motive at some points in their life cycle this motive is not so strong empirically as some investigators suggest

partial gift exchange in an experimental labor market impact of subject population differences productivity differences and effort requests on behavior we report a gift exchange experiment firms make wage offers workers respond by determining an effort level higher effort is more costly to workers and firms have no mechanism for punishing or rewarding workers consistent with the gift exchange hypothesis workers provide more effort at higher wages but undergraduates provide substantially less effort than mbas evidence suggests this results from differences in prior work experience firms nonbinding effort requests are at least partially honored resulting in increased overall effort for undergraduates although higher wages are relatively more costly for lower productivity firms workers do not provide them with more effort

the right look conservative politicians look better and voters reward it previous research has established that good looking political candidates win more votes we extend this line of research by examining differences between parties on the left and on the right of the political spectrum our study combines data on personal votes in real elections with a web survey in which 2 513 non finnish respondents evaluated the facial appearance of 1 357 finnish political candidates we find that political candidates on the right are better looking in both municipal and parliamentary elections and also have a larger beauty premium in municipal but not in parliamentary elections we discuss possible explanations for these patterns based on the fact that municipal candidates are relatively unknown jel code d72 j45 j70

short criminals stature and crime in early america abstractwe consider the extent to which an individual s height affected the age at which he entered into criminal activity in early america using data on prisoners incarcerated in pennsylvania s nineteenth century prisons we show that prisoners were short relative to the contemporary population then using weibull continuous time duration econometric models we show that age at entry into criminal activity was negatively associated with an individual s height after controlling for several individual characteristics the results are consistent with recent research showing that shorter individuals face less attractive legitimate labor market opportunities because lower stature is associated with lower cognitive ability and because of general discrimination against shorter people

the visible hand race and online market outcomes we examine the effect of race on market outcomes by selling ipods through local online classified advertisements throughout the us each advertisement features a photograph including a dark or light skinned hand or one with a wrist tattoo black sellers receive fewer and lower offers than white sellers and the correspondence with black sellers indicates lower levels of trust black sellers outcomes are particularly poor in thin markets suggesting that discrimination may not survive competition among buyers and those with the most racial isolation and property crime consistent with channels through which statistical discrimination might operate economic outcomes in the us are highly correlated with race but the causal mechanisms underlying these correlations are not well understood in particular it remains unclear how much of the correlation is due to discrimination and how much is due to other characteristics that are correlated with race such as education there is an extensive literature on the effect of race on market outcomes focusing on both labour and goods including housing markets however discrimination is not a monolithic phenomenon and it is important to investigate its extent and causes in a variety of different contexts across which they may differ our study asks the following question when the typical person engages in a consumer transaction usually as a buyer does he or she try to avoid dealing with minority sellers and does she treat minority sellers differently

gift giving and worker productivity evidence from a firm level experiment abstract we present results from a field experiment designed to measure worker response to a monetary gift from their employer the experiment took place inside a tree planting firm paying its workforce incentive contracts firm managers told a crew of tree planters they would receive a pay raise for one day as a result of a surplus not attributable to past planting productivity we compare planter productivity the number of trees planted per day on the day the gift was handed out with productivity on previous and subsequent days of planting on the same block and thus under similar planting conditions we find direct evidence that the gift had a significant and positive effect on daily planter productivity controlling for planter fixed effects weather conditions and other random daily shocks

minimum wage impacts on han minority workers wage distribution and inequality in urban china abstract this paper examines the distributional impacts of the minimum wage on the urban wages of han minority workers and the implications for urban inequality county level minimum wage data is combined with recent proprietary household survey data representative of china s ethnically diverse areas the identification strategy relies on an unconditional quantile regression framework that takes into account policy endogeneity using an instrument variable approach the findings show that minimum wages lead to wage compression along the bottom and middle parts of the urban wage distribution the minimum wage effects are larger for lower skilled workers located in ethnic minority counties or that belong to an ethnic minority group counterfactual analysis further shows that minimum wages help to significantly reduce aggregate urban wage inequality increasing minimum wages from a counterfactual benchmark to their observed levels an average increase of 26 reduces the gini coefficient of wages by 10 12

on authority distributions in organizations controls abstract a member s command game gives the direct boss and approval relations between him and other members in his organization in a complicated organization commands can be passed or implemented through command channels this implies a global authority topology in the organization this paper will investigate three related forms of command channels and their contexts in the stricter form a coalition has the complete power over a player this form can be found in the military a slavery as well as private property right the other two equivalent forms analyze the sharing power over commonly owned property they can explain such issues as the controlling power responsibility democracy in instituting governments e g one person one vote principle sharing sovereign and indivisible common property

fair wages and effort evidence from a field experiment the presence of workers who reciprocate higher wages with greater effort can have important consequences for firms and labor markets knowledge about the extent and determinants of reciprocal effort choices is however incomplete we investigate the role of fairness perceptions and social preferences in a field experiment in which workers were hired for a one time job we show that workers who perceive being underpaid at the base wage increase their performance if the hourly wage increases whereas those who feel adequately paid or overpaid at the base wage do not change their performance moreover we find that only the workers who display reciprocity in a choice experiment show reciprocal effort responses in the field the workers who lack reciprocity in the choice experiment do not respond to the wage increase even if they feel underpaid at the base wage our findings suggest that fairness perceptions and social preferences are key in workers performance response to wage increases in our study the wage increase affects effort mainly through the removal of perceived unfairness i e the elimination of negative reciprocity toward the firm rather than positive reciprocity these results are the first direct evidence of the fair wage effort hypothesis in the field and also help interpret previous contradictory findings in the literature

the charity beauty premium satisfying donors want versus should desires abstractdespite widespread conviction that neediness should be a top priority for charitable giving this research documents a charity beauty premium in which donors often choose beautiful but less needy charity recipients instead the authors propose that donors hold simultaneous yet incongruent preferences of wanting to support beautiful recipients who tend to be judged as less needy but believing they should support needy recipients the authors also posit that preferences for beautiful recipients are most likely to emerge when decisions are intuitive whereas preferences for needy recipients are most likely to emerge when decisions are deliberative these propositions are tested in several ways first when a beautiful recipient is included in basic choice sets this recipient becomes the most popular option and increases donor satisfaction second heightening deliberation steers choices away from beautiful recipients and toward needier ones third donors explicitly state that they want to

labor market consequences of poor attitude and low self esteem in youth in a recent national survey that asked employers to rank the importance of particular applicant traits for nonsupervisory and production positions applicant s attitude was the only trait that was reported to be very important in fact academic performance years of schooling completed teachers recommendations and industry based credentials certifying applicant skills all ranked lower bowles et al 2000 a second independent survey of employers in holzer and wissoker 2000 also suggests that more weight is placed on a good attitude than on basic skills among new hires of low skilled workers in this article i assess the role of pre labor market attitude and self esteem in explaining disparities observed in the labor market experiences of a sample of high school graduates the apparent importance employers ascribe to attitude and self esteem gives clear reason to expect that such a relationship exists i demonstrate that such survey responses are corroborated by real economic consequences for those with poor attitude and self esteem using longitudinal data on a 1972 cohort of high school graduates i show that high school students who reveal negative attitudes and self esteem subsequently attain fewer years of postsecondary education relative to their high school cohort are less likely to be employed 14 years following high school and where working for pay earn less accounting directly for the labor force participation decision i also document a higher incidence of unemployment among these individuals furthermore i find evidence that negative attitudes and self esteem are associated with jobs later in life that require the individual to spend time working with things as opposed to people for example and that those who exhibit poor pre labor market attitude and self esteem are subsequently more closely supervised at work and given less discretion in their daily activities all told attitude and self esteem in youth are shown to have important and long lasting economic implications in the following section i briefly discuss related literatures specifically two areas of the literature are considered the effect of joblessness on self esteem and the relationship between other noncognitive skills or worker attributes and labor market outcomes section ii then introduces the data and methods used in investigating the relationships in question empirical results are reported in section iii and are followed by some discussion and concluding remarks i previous literature this article is closely related to two areas of existing literature first there exists a small body of literature that documents a relationship between labor market activity and self esteem however this literature has heretofore focused more on the damage of joblessness to an individual s perception of self worth than on the direction of causality considered here for example goldsmith et al 1995 1996a find relationships between contemporaneous joblessness and self esteem and historic joblessness and subsequent self esteem respectively arguably the causality between attitudes and jobless spells is not clearly in one direction or the other in this article i contribute clear evidence of the reverse causation causation running from attitude and self esteem to future labor market outcomes second there is a growing body of literature on the importance of noncognitive skills in wage determination this literature suggests that measures of aggression and withdrawal osborne 1999 individual motivation goldsmith et al 2000 behavioral problems in high school cawley et al 2001 one s locus of control or outlook on life goldsmith et al 1997b osborne 1999 bertrand and mullainathan 2001 coleman and deleire 2003 and mental health bartel and taubman 1979 1986 frank and gertler 1991 mullahy and sindelar 1993 each have predictive power with respect to wages that employer surveys suggest that attitude is highly valued alone leads one to anticipate that attitude be related to earnings

do high stakes and competition undermine fair behaviour evidence from russia abstract this paper reports the results of a series of competitive labour market experiments in which subjects have the possibility to reciprocate favours in the high stake condition subjects earned between two and three times their monthly income during the experiment in the normal stake condition the stake level was reduced by a factor of ten we observe that both in the high and the normal stake condition fairness concerns are strong enough to outweigh competitive forces and give rise to non competitive wages there is also no evidence that effort behaviour becomes generally more selfish at higher stake levels therefore our results suggest that fairness concerns may play an important role even at relatively high stake levels

are emily and greg more employable than lakisha and jamal a field experiment on labor market discrimination we study race in the labor market by sending fictitious resumes to help wanted ads in boston and chicago newspapers to manipulate perceived race resumes are randomly assigned african american or white sounding names white names receive 50 percent more callbacks for interviews callbacks are also more responsive to resume quality for white names than for african american ones the racial gap is uniform across occupation industry and employer size we also find little evidence that employers are inferring social class from the names differential treatment by race still appears to still be prominent in the u s labor market jel j71 j64

the gender wage gap in experimental labor markets abstract we analyze the gender wage gap in experimental markets women receive but do not request significantly lower wages than men this hurts firms as women react with low effort additionally women tend to react differently than men to wage levels

on reputation a microfoundation of contract enforcement and price rigidity we study the impact of reputational incentives in markets characterised by moral hazard problems social preferences have been shown to enhance contract enforcement in these markets while at the same time generating considerable wage and price rigidity reputation powerfully amplifies the positive effects of social preferences on contract enforcement by increasing contract efficiency substantially this effect is however associated with a considerable bilateralisation of market interactions suggesting that it may aggravate price rigidities surprisingly reputation in fact weakens the wage and price rigidities arising from social preferences thus in markets characterised by moral hazard reputational incentives unambiguously increase mutually beneficial exchanges reduce rents and render markets more responsive to supply and demand shocks

beauty productivity and discrimination lawyers looks and lucre we propose models with an ascriptive characteristic generating earnings differentials and causing sectoral sorting allowing us to distinguish among sources producing such differentials we use longitudinal data on a large sample of graduates from one law school and measure beauty by rating matriculation photographs 1 betterlooking attorneys who graduated in the 1970s earned more than others after 5 years of practice an effect that grew with experience 2 attorneys in the private sector are better looking than those in the public sector differences that rise with age these results support theories of dynamic sorting and customer behavior

veblen s evolutionary programme a promise unfulfilled this article examines in detail the way in which veblen attempted to give theoretical expression to the programme for an evolutionary economics that he outlined in methodological terms in his 1898 essay why is economics not an evolutionary science veblen s conception of darwinian methodological principles led him to attempt to develop a theory of institutional evolution that was purely causal in nature this theory was never satisfactorily developed by veblen at base his theory was one of new technology changing economic conditions and new economic conditions leading to new ways of thinking and to new institutions through a non intentional process of habituation those who attempted to follow veblen such as hoxie and mitchell found difficulties with the key aspects of this theory and both men came to abandon it institutionalism in the interwar period is devoid of attempts to develop veblen s theory and veblen s programme remained a promise unfulfilled

involuntary unemployment and non compensating wage differentials in an experimental labour market in this paper the authors report the results of a series of efficiency wage experiments some of the key predictions of the efficiency wage hypothesis are qualitatively confirmed by the data higher wages caused a reduction in shirking firms offered contracts which exhibited positive job rents firms offered systematically different wages and job rents which gave rise to noncompensating income differentials and endogenous involuntary unemployment occurred copyright 1996 by royal economic society

does a picture paint a thousand words female entrepreneurship is low in many developing economies partly due to constraints on women s time and mobility often reinforced by social norms we analyze a marketing experiment designed to encourage female uptake of a new microcredit product a brochure with two different covers was randomly distributed among male and female borrowing groups one cover featured 5 businesses run by men while the other had identical businesses run by women we find that both men and women respond to psychological cues men who are not themselves business owners have lower measured ability and whose wives are less educated respond more negatively to the female brochure as do women business owners with low autonomy within the household women with relatively high levels of autonomy shown the male brochure have a similar negative response while there is no effect on female business owners with autonomy shown the female brochure overall these results suggest that women s response to psychological cues such as posit

fund raising success and a solicitor s beauty capital do blondes raise more funds abstract this study uses a door to door fund raising field experiment to explore the returns to physical appearance on fund raising success interestingly blonde females earn more on average than brunette counterparts however the returns to physical appearance depend critically on the race of a potential donor

community and capital in entrepreneurship and economic growth we argue that social integration in the sense of within community interconnectedness and venture capital have a complementary relationship in fostering innovation entrepreneurship and economic gr

gift exchange in a multi worker firm one of the main findings of a large body of gift exchange experiments is that in an incomplete contracts environment workers on average do not shirk and usually provide more than the minimum enforceable effort level in general 40 to 60 percent of the workers reward higher wages with higher effort these results are observed for simple one employer one worker relationships in this paper we investigate whether they generalize to the more realistic situation in which the employer employs several workers we compare a bilateral gift exchange game with a treatment in which each employer has four workers we find that effort levels in the latter treatment are only marginally lower gift exchange thus appears to be robust to increases in the size of the workforce and intention based reciprocity rather than social preferences seems to be the main driving force behind gift exchange

beauty and the sources of discrimination we analyze discrimination against less attractive people on a tv game show with high stakes the game has a rich structure that allows us to disentangle the relationship between attractiveness and the determinants of a player s earnings unattractive players perform no worse than attractive ones and are equally cooperative in the prisoner s dilemma stage of the game nevertheless they are substantially more likely to be eliminated by their peers even though this is costly we investigate third party perceptions of discrimination by asking subjects to predict elimination decisions subjects implicitly assign a role for attractiveness but underestimate its magnitude

on the difficulty of evolutionary analysis thorstein veblen s 100 year old question why is economics not an evolu tionary science remains relevant evolutionary analysis even for those social scientists who trace their intellectual heritage to evolutionary thought has been difficult for three reasons effective incorporation of time requires a respectful and detailed treatment of the past dominant social science paradigms have made it difficult to account for novelty and concern with policy and current issues of social debate creates a tendency towards taxonomy the twentieth century history of economic anthropology and institutional economics illustrates that a failure to overcome these difficulties leaves veblen s vision unfulfilled the reasonable reaction to veblen s famous question why is economics not an evolutionary science is to ask a further question why is it still not an evolutionary science and then to continue with the questions why are the other social sciences not evolutionary sciences why especially have the american institutionalists who claim veblen as a founding father and who have an organisation called the association for evolutionary economics found evolutionary analyses difficult in this paper i propose to address these questions by examining aspects of the history of one discipline anthropology and one subdiscipline institutional economics that emerged from the evolutionary vision of the late nineteenth century 1 veblen s anthropological roots were

does diversity pay race gender and the business case for diversity the value in diversity perspective argues that a diverse workforce relative to a homogeneous one is generally beneficial for business including but not limited to corporate profits and earnings this is in contrast to other accounts that view diversity as either nonconsequential to business success or actually detrimental by creating conflict undermining cohesion and thus decreasing productivity using data from the 1996 to 1997 national organizations survey a national sample of for profit business organizations this article tests eight hypotheses derived from the value in diversity thesis the results support seven of these hypotheses racial diversity is associated with increased sales revenue more customers greater market share and greater relative profits gender diversity is associated with increased sales revenue more customers and greater relative profits i discuss the implications of these findings relative to alternative views of diversity in the workplace

social identity and preferences social identities prescribe behaviors for people we identify the marginal behavioral effect of these norms on discount rates and risk aversion by measuring how laboratory subjects choices change when an aspect of social identity is made salient when we make ethnic identity salient to asian american subjects they make more patient choices when we make racial identity salient to black subjects non immigrant blacks but not immigrant blacks make more patient choices making gender identity salient has no effect on intertemporal or risk choices

why beauty matters we decompose the beauty premium in an experimental labor market where employers determine wages of workers who perform a maze solving task this task requires a true skill which we show to be unaffected by physical attractiveness we find a sizable beauty premium and can identify three transmission channels a physically attractive workers are more confident and higher confidence increases wages b for a given level of confidence physically attractive workers are wrongly considered more able by employers c controlling for worker confidence physically attractive workers have oral skills such as communication and social skills that raise their wages when they interact with employers our methodology can be adopted to study the sources of discriminatory pay differentials in other settings

gaming against managers in incentive systems experimental results with chinese students and chinese managers we examine strategic interactions between firms and planners in china comparing behavior between i students and managers with field experience with this situation ii standard versus increased monetary incentives and iii sessions conducted in context making explicit reference to interactions between planners and managers and those without any such references the dynamics of play are similar across treatments with play only gradually and incompletely converging on a pooling equilibrium a fivefold increase in incentives significantly increases initial levels of strategic play games played in context generated greater levels of strategic play for managers with minimal impact on students

modeling the psychology of consumer and firm behavior with behavioral economics abstract marketing is an applied science that tries to explain and influence how firms and consumers behave in markets marketing models are usually applications of standard economic theories which rely on strong assumptions of rationality of consumers and firms behavioral economics explores the implications of the limits of rationality with the goal of making economic theories more plausible by explaining and predicting behavior more accurately while maintaining formal power this article reviews six behavioral economics models that are useful to marketing three models generalize standard preference structures to allow for sensitivity to reference points and loss aversion social preferences toward outcomes of others and preference for instant gratification the other three models generalize the concept of game theoretic equilibrium allowing decision makers to make mistakes encounter limits on the depth of strategic thinking and equilibrate by learning from feedback the authors also discuss a sp

bite me abc s shark tank as a path to entrepreneurship business pitch competitions provide early stage finance and mentoring for entrepreneurs in this paper we analyze data from the most public high stakes pitch competition in the usa abc s shark tank we construct a dataset comprising all entrepreneurs firms that have aired between august 2009 and may 2016 our findings 1 funding on the show seems to relax an internal financial constraint rather than signal the quality of the venture to potential outside investors 2 to the extent that the latter is occurring there is plausible evidence that the signaling effect works in an unexpected direction for women entrepreneurs it may crowd out attention from potential investors 3 while it is fairly clear that this pitch competition is associated with longer run existence of firms it has no significant impacts on innovation 4 there are no consistent differential impacts on racial ethnic minorities these findings complement the literature on the impact of pitch competitions and early access to finance

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

does a picture paint a thousand words evidence from a microcredit marketing experiment female entrepreneurship is low in many developing economies partly because of constraints on women s time and mobility which are often reinforced by social norms this paper analyzes a marketing experiment designed to encourage women to adopt a new microcredit product a brochure with the same content but two different covers was randomly distributed among male and female borrowing groups one cover featured five businesses run by men while the other showed identical businesses run by women men and women responded to psychological cues among men who were not business owners had lower measured ability and whose wives were less educated the responses to the female brochure were more negative as did female business owners with low autonomy within the household women with relatively high levels of autonomy had a similar negative response to the male brochure while there was no effect on female business owners with autonomy overall these results suggest that women s response to psychological cues such as positive role models may be affected by their level of autonomy at home and more intensive interventions may be required for more disadvantaged women

the life cycle model of consumption and saving a central implication of life cycle models is that agents smooth consumption we review the empirical evidence on smoothing at frequencies from within the year up to across a lifetime we find that life cycle models particular those which incorporate realistic features of markets and goods have more empirical successes than failures we also show that some apparent deviations from theoretical predictions imply very small welfare losses for agents finally we emphasize that the coherence of life cycle models imposes an important discipline when incorporating new features into models

information bilateral negotiations and worker recruitment this paper studies experimentally how firms choose between using a centralized market and bilateral negotiations to recruit new personnel in the market firms interact with several workers but do not have information about workers behavior in the past in the bilateral negotiations firms negotiate bilaterally with prospective workers and learn about workers performance in previous jobs we show that the interaction between social preferences the incompleteness of contracts and the existence of information about a worker s past performance provides an explanation for firms forgoing market opportunities and bilaterally negotiating with a worker we observe that approximately 30 of all job contracts were bilaterally negotiated when these contracts are incomplete as opposed to only 10 when contracts were complete the surplus from trade is higher when incomplete contracts can be bilaterally negotiated which can be attributed to the presence of information

bending the pipeline executive search and gender inequality in hiring for top management jobs we study the sources of women s underrepresentation in hiring for top management jobs by focusing on the context of executive search using data that include proprietary information on 10 970 individuals considered by a search firm we examine the sources of the low proportion of women placed in senior roles contrary to received wisdom we find limited evidence that demand side screeners strongly contribute to gender disadvantage in this setting what gender differences exist tend to play out at the start of the hiring process and are driven both by supply side and demand side actors once considered for a position women are no less likely than men to be hired though they are slightly less likely to be interviewed by the search firm our findings highlight the theoretical importance of disentangling candidates self steering behavior from the pipeline bending of hiring agents we discuss the implications of our results for understanding gender inequality at upper echelons of the labor market this p

if wages fell during a recession abstract many economies exhibit downward wage rigidity surveys of managers indicate that employers hold wages rigid because they believe morale will suffer after a wage cut otherwise there is little evidence for how employers beliefs contribute to wage rigidity and whether those beliefs are accurate using an experiment we demonstrate that effort falls after workers experience a wage cut despite this partial confirmation of the bewley 1999 morale theory half of the employers in our experiment cut wages and lose money as a result under nominal inflation real wage cuts do not have a significant effect on effort

what accounts for the variation in retirement wealth among u s households even among households with similar socioeconomic characteristics saving and wealth vary considerably life cycle models attribute this variation to differences in time preference rates risk tolerance exposure to uncertainty relative tastes for work and leisure at advanced ages and income replacement rates these factors have testable implications concerning the relation between accumulated wealth and the shape of the consumption profile using the panel study of income dynamics and the consumer expenditure survey we find little support for these implications the data are instead consistent with rule of thumb mental accounting or hyperbolic discounting theories of wealth accumulation jel di d91 e21

lifestyle conformity and lifecycle saving a veblenian perspective since the 1950s the lifecycle hypothesis has been the dominant explanation for the inverse u in household wealth accumulation this paper advances an alternative explanation rooted in the ideas of veblen that emphasises the role of lifestyle conformity because people tend to adopt lifestyles common to their social group and modify them in standard ways as they age lifecycle norms impart a certain order to the accumulation of assets and liabilities which enables people to do lifecycle saving via habitual thinking after laying out the argument conceptually the paper provides empirical evidence on the role of conformity in lifecycle saving and discusses its contribution to the current low saving rate in the usa copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

the ubiquity of habits and rules under what circumstances is it necessary or convenient for an agent to rely on habits or rules this paper focuses on the types of decision situations giving rise to their use even optimization requires the deployment of rules and for this reason mainstream economics cannot legitimately ignore these questions the argument is that habits and rules are ubiquitous in human activity in a new taxonomy seven types of decision situations are considered classified according to the type of information problem involved neither neoclassical nor behavioral economics can provide a complete account of the bases of habits or rules in these cases copyright 1997 by oxford university press

social comparison and performance experimental evidence on the fair wage effort hypothesis we investigate the impact of wage comparisons for worker productivity we present three studies which all use three person gift exchange experiments consistent with akerlof and yellen s 1990 fair wage effort hypothesis we find that disadvantageous wage discrimination leads to lower efforts while advantageous wage discrimination does not increase efforts on average two studies allow us to measure wage comparison effects at the individual level we observe strongly heterogeneous wage comparison effects we also find that reactions to wage discrimination can be attributed to the underlying intentions of discrimination rather than to payoff consequences

workforce diversity and religiosity workforce diversity has received increasing amounts of attention from academics and practitioners alike in this article we examine the empirical association between a firm s workforce diversity hereafter diversity and the degree of religiosity of the firm s management by investigating their unidirectional and endogenous effects employing a large and extensive u s sample of firms from the years 1991 2010 we find a positive association between a measure of the firm s commitment to diversity and the religiosity of the firm s management after controlling for various firm characteristics in addition after controlling for endogeneity with the dynamic panel generalized method of moment we still find a positive association between the firm s diversity and management s religiosity we interpret these results as supportive of the religious motivation explanation that views the firm as a human community and considers religion as a factor that influences managers to more positively embrace diversity our results however provide no support for the resource constraint hypothesis that views the firm as a nexus of contracts and sees managers as aiming to maximize shareholder returns under resource constraints that force them to invest only in projects that have a positive net present value npv and reject diversity initiatives since these do not have a positive npv

efficiency wage models of unemployment keynesian economists hold it to be self evident that business cycles are characterized by involuntary unemployment but construction of a model of the cycle with involuntary unemployment faces the obvious difficulty of explaining why the labor market does not clear involuntarily unemployed people by definition want to work at less than the going wage rate why don t firms cut wages thereby increasing profits

gender diversity in firms this paper explores the recent efforts by the corporate world and public policy to increase the number of women in leadership positions in the workplace we review and empirically evaluate the business case for gender equality showing some evidence in favour of it despite the evidence and growing support progress towards more diversity in leadership positions has been slow we study the importance of supply side constraints as well as the main diversity policies gender quotas mentoring and network programs diversity training to change firm culture and family friendly policies that have been implemented we focus on the effectiveness of these policies their shortcomings as well as potential future steps that could help guide policy

a cohort analysis of saving behavior by u s households the aim of this paper is to shed some light in the decline in personal saving rates in the united states in the 1980s for a such a purpose the paper analyses the only u s data set containing information on consumption and income at the household level the consumer expenditure surveys cex from 1980 to 1991 because the cex is not a panel most of the analysis is conducted using average cohort techniques the paper identifies a typical age profile for saving rates such a profile is hump shaped and peaks around age 57 the paper also argues that such a profile was shifted down for the cohorts born between 1920 and 1939 relative to the younger and older cohorts considered these cohorts are the parents of the baby boom generation the paper also argues that these cohort effects can account for a non neglible proportion of the decline in aggregate saving because these cohorts were during the 1980s in the ages when saving rates are typically highest the result is robust to the consideration of several controls and holds for several definitions of consumption the only exception is when durable expenditure is considered as saving rather than consumption

the effect of adolescent experience on labor market outcomes the case of height taller workers receive a wage premium net of differences in family background the disparity is similar in magnitude to the race and gender gaps we exploit variation in an individual s height over time to explore how height affects wages controlling for teen height essentially eliminates the effect of adult height on wages for white men the teen height premium is not explained by differences in resources or endowments the teen height premium is partially mediated through participation in high school sports and clubs we estimate the monetary benefits of a medical treatment for children that increases height

trust and credit the role of appearance in peer to peer lending although it is well known that appearance based impressions affect labor market and election outcomes little is known about the role appearance plays in financial transactions we address this question using photographs of potential borrowers from a peer to peer lending site consistent with the trust intensive nature of lending we find that borrowers who appear more trustworthy have higher probabilities of having their loans funded moreover borrowers who appear more trustworthy indeed have better credit scores and default less often overall our findings suggest that impressions of trustworthiness matter in financial transactions as they predict investor as well as borrower behavior a man i do not trust could not get money from me on all the bonds in christendom john pierpont morgan 1913 the author 2012 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

on the evolution of thorstein veblen s evolutionary economics this article addresses the origins of thorstein veblen s evolutionary economics as announced in his 1898 essay why is economics not an evolutionary science before 1897 and partly under the influence of c lloyd morgan veblen rejected biological reductionism veblen s 1897 endorsement of a critique of marxism by max lorenz shows that he found karl marx s account of human action too limiting by this time veblen had also rejected the idea of either the individual or society as exclusive foundations for social science instead he embraced an evolutionary framework of explanation along darwinian lines involving multiple levels of explanation and emergent properties copyright 1998 by oxford university press

experimental labor markets and policy considerations incomplete contracts and macroeconomic aspects this survey focuses on experimental labor markets investigating two aspects that are important for a better understanding of labor market relations and their consequences for labor market policies the first part of the survey is dedicated to papers that assess the prevalence of reciprocal considerations in incomplete labor contracts the second part summarizes the relatively small but growing experimental literature exploring labor market issues in macroeconomics and public finance studying the interaction between taxation and labor market outcomes

reciprocity under brief and long time delays we report the results from three experiments embedded in the same overarching design which extends the gift exchange paradigm for the study of worker employer relationships we focus on the effect of the length of the delay between the time at which workers learn their wage and when they choose an effort level on the relationship between wage and effort we compare effort choices made within a few hours with those made several weeks afterward we find that the strength of the wage effort relationship decreases over time and this change appears to be driven by workers who receive low wages jel c91 j33 m52

when does weight matter most past empirical work establishes a wage penalty from being overweight in this paper i exploit variation in an individual s weight over time to determine the age when weight has the largest impact on labor market outcomes for white men controlling for weight at younger ages does not eliminate the effect of older adult weight on wage being overweight as a young adult only adds an additional penalty to adult wages however for white women what they weigh in their early twenties solely determines the existence of an adult wage penalty the female early twenties weight penalty has a persistent effect on wages and differences in marital characteristics occupation status or education cannot explain it it also is not a proxy for intergenerational unobservables

compliance with endogenous audit probabilities in this paper we study the effect of endogenous audit probabilities on reporting behavior in a face to face compliance situation such as at customs in an experimental setting in which underreporting has a higher expected payoff than truthful reporting we find an increase in compliance of about 80 percent if subjects have reason to believe that their behavior towards an officer influences their endogenous audit probability higher compliance is driven by considerations about how their own appearance and performance affect their audit probability rather than by the social and psychological effects of face to face contact

gender bias and credit access we extract an exogenous measure of gender bias from survey responses by descendants of u s immigrants on questions about the role of women in society we then use data on around 6 000 small business firms from 17 countries and find that in high gender bias countries female entrepreneurs are more likely to opt out of the loan application process and to resort to informal finance even though banks do not appear to actively discriminate against them these results are not driven by credit risk differences between female and male owned firms or by any idiosyncrasies in the set of countries in our sample

lloyd shapley s matching and game theory this is a survey of lloyd shapley s contributions to matching theory and game theory in general starting with the work that inspired the swedish academy to award the 2012 nobel memorial prize in economic sciences to lloyd shapley and alvin roth

performance in competitive environments gender differences even though the provision of equal opportunities for men and women has been a priority in many countries large gender differences prevail in competitive high ranking positions suggested explanations include discrimination and differences in preferences and human capital in this paper we present experimental evidence in support of an additional factor women may be less effective than men in competitive environments even if they are able to perform similarly in non competitive environments in a laboratory experiment we observe as we increase the competitiveness of the environment a significant increase in performance for men but not for women this results in a significant gender gap in performance in tournaments while there is no gap when participants are paid according to piece rate this effect is stronger when women have to compete against men than in single sex competitive environments this suggests that women may be able to perform in competitive environments per se

on authority distributions in organizations equilibrium abstract one assumption in the shapley shubik power index is that there is no interaction nor influence among the voting members this paper will apply the command structure of shapley 1994 to model members interaction relations by simple games an equilibrium authority distribution is then formulated by the power in power out mechanism it turns out to have much similarity to the invariant measure of a markov chain and therefore some similar interpretations are followed for the new setting in some sense one s authority distribution quantifies his general administrative power in the organization and his long run influence on all members we provide a few applications in conflict resolution college and journal ranking and organizational choice