When experts have superior information on their customers' needs and appropriate treatment/repair/advice is a credence good, there are obvious incentives for opportunistic behavior. What compounds this is that experts regularly make treatment recommendations and price offers only after consumers...

We analyze the impact of social comparison on optimal contract design under imperfect labor market competition for managerial talent. Adding a disutility of social comparison as induced by a ranking of verifiable efforts to the multi-task model by Bénabou and Tirole (4238), we demonstrate that...

We analyze the impact of records of denied and withdrawn customer complaints on job separation in a dataset based on FINRA's Broker-Check database with more than 3 mio. financial advisers. Compared to misconduct that actually leads to a conviction of the adviser, denied and withdrawn complaints...

Credence goods markets - like for health care or repair services - with their informational asymmetries between sellers and customers are prone to fraudulent behavior of sellers and resulting market inefficiencies. We present the first model that considers both diagnostic uncertainty of sellers...

This study presents novel evidence showing that group payments distributed proportional to effort are as effective as payments targeted to individuals in increasing public good provision. The decision setting includes donors who make transfer payments to public good providers. The institutions...

Sustaining large-scale public goods, such as the environment, requires individuals to take action; however, motivating voluntary climate action (VCA) is difficult because decision-makers today do not stand to benefit from their investments. Here, we propose that parents invest more in VCA if...

In many (online) markets, consumers can readily observe prices, but need to examine individual products at positive cost in order to assess how well they match their needs. We propose a tractable model of price-directed sequential search in a market where firms compete in prices. Each product...

How should firms optimally choose prices and promotional strategies and how should they position their products when consumers are "relative thinkers"? We provide answers in a model that extends the seminal contributions of Varian (1980) and Narasimhan (1988) and derive both managerial...

In this paper we investigate the generalizability of the role of unequal opportunities and social group membership in redistributive preferences for the general population. We present results from a large-scale online experiment with more than 4,000 participants. The experiment consists of a...

We present the results of a randomized intervention in schools to study how teaching financial literacy affects risk and time preferences of adolescents. Following ore than 600 adolescents, aged 16 years on average, over about half a year, we provide causal evidence that teaching financial...