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This paper experimentally examines image motivation—the desire to be liked and well-regarded by others—as a driver in prosocial behavior (doing good), and asks whether extrinsic monetary incentives (doing well) have a detrimental effect on proso-cial behavior due to crowding out of image motivation. By definition, image depends on one's behavior being(More)
Dishonesty plays a large role in the economy. Causes for (dis)honest behavior seem to be based partially on external rewards, and partially on internal rewards. Here, we investigate how such external and internal rewards work in concert to produce (dis)honesty. We propose and test a theory of self-concept maintenance that allows individuals to engage to(More)
Almost all jobs require a combination of cognitive effort and labor effort. This paper focuses on the effect that competitive incentive schemes have on the chosen combination of these two types of efforts. We use an experimental approach to show that competitive incentives may induce agents to work harder but not necessarily smarter. This effect was(More)
Optimism-bias is inconsistent with the independence of decision weights and payo¤s found in models of choice under risk, such as expected utility theory and prospect theory. Hence, to explain the evidence suggesting that agents are optimistically biased, we propose an alternative model of risky choice, a¤ective decision-making, where decision weights —(More)
The public phase of a capital campaign is typically launched with the announcement of a large seed donation. Andreoni (1998) argues that such a fundraising strategy may be particularly effective when funds are being raised for projects that have fixed production costs. The reason is that the introduction of fixed costs may give rise to both positive and(More)
People like to think of themselves as honest. However, dishonesty pays—and it often pays well. How do people resolve this tension? This research shows that people behave dishonestly enough to profit but honestly enough to delude themselves of their own integrity. A little bit of dishonesty gives a taste of profit without spoiling a positive self-view. Two(More)
The authors use a laboratory experiment to examine the impact of relative wages on labor supply. They test the hypothesis that, ceteris paribus, making a given wage high (low) relative to other wage levels will lead to an increase (decrease) in labor supply. They find that labor supply does respond significantly to relative pay, and in the expected(More)
This paper suggests incorporating affective considerations into models of decision making and insurance decisions in particular. The model is based on, and explores the implication of, a distinction between two internal thinking processes. This distinction is supported by numerous studies in psychology, and is a formalization of what is often refered to as(More)
We propose Keynesian utilities as a new class of non-expected utility functions representing the preferences of investors for optimism, defined as the composition of the investor's preferences for risk and her preferences for ambiguity. The optimism or pessimism of Keynesian utilities is determined by empirical proxies for risk and ambiguity. Bulls and(More)