This paper examines how past effort can impact subsequent effort, such as when effort is reduced following an interruption. I conducted 3 incentivized real-effort experiments in which both piece rates and leisure options were manipulated and find effort displays significant stickiness, even in the absence of switching costs. I demonstrate that this intertemporal evidence is indicative of effort momentum , rather than on-the-job learning, reciprocity, or income targeting. Five minutes after incentives return to baseline, 45% of the effort increase or decrease persists. This finding is especially relevant for studies employing individual fixed effects and for organizations concerned with worker disruptions.
Risky Choices Over Goods
This paper examines how risk preferences differ over goods and in-kind monetary rewards. I study an incentivized experiment in which control subjects allocate Amazon.com credit over uncertain states, whereas treated subjects allocate self-selected Amazon.com goods over uncertain states. Under a standard model with perfect information of prices, I demonstrate allocations would be identical between treatments. In practice, subjects demonstrate considerable differences across goods and monetary rewards, with credit being more evenly allocated among the uncertain states. Using an additional information treatment, I find no evidence that price or product uncertainty explains these differences. I further show that these results are not being driven by fungibility, functional form, or good discreteness.
(with David Dillenberger, Daniel Gottlieb, and Pietro Ortoleva)
We study preferences over lotteries that pay a specific prize at uncertain dates. Expected Utility with convex discounting implies that individuals prefer receiving $x in a random date with mean t over receiving $x in t days for sure. Our experiment rejects this prediction. It suggests a link between preferences for payments at certain dates and standard risk aversion. Epstein-Zin (1989) preferences accommodate such behavior, and fit the data better than a model with probability weighting. We thus provide another justification for disentangling attitudes toward risk and time, as in Epstein-Zin, and suggest new theoretical restrictions on its key parameters.
Altruism, Reciprocal Giving, and Information
A theoretical work on the impossibility of reciprocal giving equilibria. With modest assumptions, I find that
two individuals cannot both prefer to give to the other. As an example, I find that a child will never purchase
a gift that the parent could otherwise buy in the marketplace. Using this as a starting point, I consider
the three person extension and find that a gift will never pass through the hands of all three individuals,
completing a cycle. I also explore altruism with imperfect information. With imperfect knowledge regarding
preferences, I explore two models. The first is when a husband assumes his wife has the same preferences as
himself, and vice versa. If both have separately additive concave utility functions, I prove that reciprocal
giving equilibria cannot occur. The second case looks at altruistic learning and concludes that altruistic
individuals want to learn more about "happier-than-average" individuals.