Whether people seek or avoid risks on gambling, insurance, asset, or labor markets crucially depends on the skewness of the underlying probability distribution. In fact, people typically seek positively skewed risks and avoid negatively skewed risks. We show that salience theory of choice under...

We examine whether compliance with the law is associated with prosocial behavior. We test whether people who comply with parking rules are more likely to reply to a survey than people who did not comply with parking rules. We find that parking rule followers have significantly higher response...

This study focuses on luck as a source of inequality, including (1) sheer luck and (2) luck that correlates with individual characteristics, such as gender and ethnicity. While the former is more random, the latter is more discriminatory. A strand of previous literature treats luck more...

We examine whether compliance with the law is associated with prosocial behavior. We test whether people who comply with parking rules are more likely to reply to a survey than people who did not comply with parking rules. We find that parking rule followers have significantly higher response...

Whether people seek or avoid risks on gambling, insurance, asset, or labor markets crucially depends on the skewness of the underlying probability distribution. In fact, people typically seek positively skewed risks and avoid negatively skewed risks. We show that salience theory of choice under...

This study focuses on luck as a source of inequality, including (1) sheer luck and (2) luck that correlates with individual characteristics, such as gender and ethnicity. While the former is more random, the latter is more discriminatory. A strand of previous literature treats luck more...

Consumers frequently overinsure modest risks. I argue that confining consumers' insurance motives to a single motive - risk aversion - is responsible for the difficulty to rationalize this behavior. People who perform mental accounting have an additional motive for buying insurance. They...

In a tedious real effort task, subjects know that their piece rate is either low or ten times higher. When subjects are informed about their piece rate realization, they adapt their performance. One third of subjects nevertheless forego this instrumental information when given the choice - and...

This paper analyzes contract choices and the effectiveness of consumer protection policies when firms can offer voluntary add-on insurance for their products at the point of sale. We develop a model in which a base product can be sold together with a voluntary extended warranty contract that...

The psychology literature provides ample evidence that people have difficulties taking the perspective of less informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader...