We investigate a multi-agent moral-hazard model where agents have expectation-based reference-dependent preferences a la Koszegi and Rabin (2006, 2007). We show that even when each agent's probability of success in a project is independent, team incentives can be optimal. Because the agents are...

Firms often set long notice periods when consumers cancel a contract, and sometimes do so even when the costs of changing or canceling the contract are small. We investigate a model in which a firm offers a contract to consumers who may procrastinate canceling it due to naive present-bias. We...

We develop models of markets with procrastinating consumers where competition operates - or is supposed to operate - both through the initial selection of providers and through the possibility of switching providers. As in other work, consumers fail to switch to better options after signing up...

This paper theoretically investigates how labor-market tightness affects market outcomes if firms use informal and self-enforcing agreements to motivate workers. We characterize profit-maximizing equilibria and derive the following results. First, an increase in the supply of homogenous workers...

We propose a theoretical model of insecurity --- high-but-fragile self-esteem --- that seeks to integrate and help make sense of diverse strands of research in psychology. Adopting from behavioral economics the concept of a ``personal equilibrium" --- a situation in which an individual's...

This paper investigates how labor-market tightness affects market outcomes if firms use informal, self-enforcing, agreements to motivate workers. We characterize profit-maximizing equilibria and show that an increase in the supply of homogenous workers can increase wages. Moreover, even though...