Performance-contingent pay raises productivity, yet in the German Socio-Economic Panel (SOEP) only about 16% of workers report receiving performance pay, with the incidence being roughly seven percentage points higher among university graduates than among non-graduates. This coexistence of low...

This paper develops an axiomatic framework for decision making when preferences depend not only on the current alternative but also on the past frequency with which alternatives have been chosen. We identify key independence axioms that characterize frequency-dependent preferences. In addition,...