89 Citations
The Morale Effects of Pay Inequality
- Economics
- 2016
The idea that worker utility is affected by co-worker wages has potentially broad labor market implications. In a month-long experiment with Indian manufacturing workers, we randomize whether…
Labor Market Signaling and Self-Confidence: Wage Compression and the Gender Pay Gap
- EconomicsJournal of Labor Economics
- 2012
I extend Spence’s signaling model by assuming that some workers are overconfident—they underestimate their marginal cost of acquiring education—and some are underconfident. Firms cannot observe…
Labor Market Signaling with Overconfident Workers
- Economics
- 2010
I extend Spence’s (1974) labor market signaling model by assuming some workers are overconfident and some underconfident. Overconfident (underconfident) workers underestimate (overestimate) their…
Contracts for Agents with Biased Beliefs: Some Theory and an Experiment
- Economics
- 2011
This paper experimentally tests the predictions of a principal-agent model in which the agent has biased beliefs about his ability. Overconfi dent workers are found to earn lower wages than…
On the Economic Architecture of the Workplace: Repercussions of Social Comparisons among Heterogeneous Workers
- Economics, BusinessJournal of Labor Economics
- 2011
We analyze the impact on a firm’s profits and optimal wage rates, and on the distribution of workers’ earnings, when workers compare their earnings with those of coworkers. We consider a…
Overconfidence, Subjective Perception, and Pricing Behavior
- EconomicsJournal of Economic Behavior & Organization
- 2019
Nonstationary Relational Contracts with Adverse Selection
- Economics
- 2013
I develop a model of nonstationary relational contracts in order to study internal wage dynamics. Workers are heterogeneous, and each worker’s ability is both private information and fixed for all…
Positive Self-Image in Tournaments
- Economics
- 2003
This paper analyzes the implications of worker overestimation of productivity for firms in which incentives take the form of tournaments. Each worker overestimates his productivity but is aware of…
Positive Self-Image and Incentives in Organisations
- Economics
- 2008
This paper investigates the implications of individuals’ mistaken beliefs of their abilities on incentives in organizations using the principal-agent model of moral hazard. The paper shows that if…
Curb your enthusiasm: Optimistic entrepreneurs earn less
- Business, EconomicsEuropean Economic Review
- 2019
References
SHOWING 1-10 OF 31 REFERENCES
The Wage Policy of a Firm
- Economics
- 1994
Salary data from a single firm are analyzed in an effort to identify the firm's wage policy. We find that employees are partly shielded against changes in external market conditions; that wage…
Pay Equality and Industrial Politics
- EconomicsJournal of Political Economy
- 1989
Personnel managers often argue that equitable pay treatment manifested as wage compression is useful because it reduces disharmony among workers. But it is far from obvious that a compressed salary…
Perceptions of Equity and the Distribution of Income
- EconomicsJournal of Labor Economics
- 2002
This article develops a model in which quit rates, and thus the income distribution, depend on employee perceptions of the accuracy of employer assessments of individual productivity because these…
CEO Overconfidence and Corporate Investment
- Economics, Business
- 2002
We argue that managerial overconfidence can account for corporate investment distortions. Overconfident managers overestimate the returns to their investment projects and view external funds as…
Why Wages Don't Fall during a Recession
- Economics
- 1999
A deep question in economics is why wages and salaries don't fall during recessions. this is not true of other prices, which adjust relatively quickly to reflect changes in demand and supply.…
The Flow Approach to Labor Markets
- Economics
- 1992
The "flow approach" to labor markets builds up from the flows of workers and of jobs. It is based on three essential components, a specification of labor demand in terms of flows of job…
The Fair Wage-Effort Hypothesis and Unemployment
- Economics
- 1990
This paper introduces the fair wage-effort hypothesis and explores its implications. This hypothesis is motivated by equity theory in social psychology and social exchange theory in sociology.…
Overconfidence and Excess Entry: An Experimental Approach
- Economics
- 1999
Psychological studies show that most people are overconfident about their own relative abilities, and unreasonably optimistic about their futures (e.g. Shelly E. Taylor and J.D. Brown, 1988; Neil D.…
TRADE WITH HETEROGENEOUS PRIOR BELIEFS AND ASYMMETRIC INFORMATION
- Economics
- 1994
'No trade' theorems have shown that new information will not lead to trade when agents share the same prior beliefs. This paper explores the structure of no trade theorems with heterogeneous prior…