We investigate whether violations of canonical axioms of choice under risk are mistakes or a manifestation of true preferences. First, we elicit axiom and gamble preferences and then allow subjects to revise their potentially conflicting preferences. Among the behavioral patterns that allow for...

We investigate whether violations of canonical axioms of choice under risk are mistakes or a manifestation of true preferences. First, we elicit axiom and gamble preferences and then allow subjects to revise their potentially conflicting preferences. Among the behavioral patterns that allow for...

In this study, we enrich a standard principal-agent model with hidden action by introducing salience-biased perception on the agent's side. The agent's misguided focus on salient payoffs, which leads the agent's and the principal's probability assessments to diverge, has two effects: First, the...

We present a theory of context-dependent risk preferences under which within-state payoff comparisons and regret aversion shape decisions. Defining the attraction and compromise effect in reference to a state-space-based description of the choice problem, we show that our theory can account for...

Earlier work has shown that procrastination can be explained by quasihyperbolic discounting. We present a model of effort choice over time that shifts the focus away from completion to performance on a single task. We show that quasi-hyperbolic discounting is detrimental for performance. More...

This paper extends the standard principal-agent model with moral hazard to allow for agents having reference-dependent preferences according to Köszegi and Rabin (2006, 2007). The main finding is that loss aversion leads to fairly simple contracts. In particular, when shifting the focus from...

This paper investigates - in a large heterogeneous sample - the relationship between social preferences on the one hand, and socioeconomic factors and political preferences on the other hand. Socioeconomic factors correlate with social preferences, and social preferences robustly shape political...

This paper dissects distributional preferences with group identity in a modified dictator game. I estimate individual-level utility functions with two parameters that govern the trade-offs between equity and efficiency and giving to self and to other. Subjects put on average less weight on...