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Behavioral and Personnel Economics

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This page is maintained by Steffen Altmann.

What makes some employment relationships successful, and causes others to fail? What is the role of government and the law in enhancing the performance of existing and new employment relationships? These are key questions for personnel economics. Its primary goal is to understand the relationship between institutions and employee performance. Recent research in behavioral economics has begun to enhance our understanding of the psychological foundations of incentives. Most importantly, this research has shown that workplace performance does not depend only on the relationship between measured performance and pay, but also on many other features of the workplace environment, including employee morale, job security, and the perceived "fairness" of one's pay. Recent evidence from economics and psychology has also demonstrated that individuals’ advancement in the labor market does not solely depend on their cognitive abilities. Rather, individual preferences and personality characteristics such as risk attitudes, patience and perseverance, or extraversion, are equally important for understanding people’s educational attainment and their success in the labor market. IZA’s program area “Behavioral and Personnel Economics” analyses how to model the relationship between such psychological factors, individual workplace performance, and general labor market outcomes. The results from this research can inform both businesses and policy makers on the best strategies to manage employment relationships, and on ways to improve existing laws and regulations.

For general information about this program area, please contact: persecon@iza.org

Core members of this program area:
Dr. Steffen Altmann, Senior Research Associate

Affiliated members of this program area:
Alpaslan Akay, Ph.D., Senior Research Associate
Dr. Patrick Arni, Research Associate
Prof. Dr. Marco Caliendo, Program Director and Visiting Research Fellow
Philipp Doerrenberg, Resident Research Affiliate
Dr. Anne C. Gielen, Senior Research Associate
Prof. Peter J. Kuhn, Ph.D., Visiting Research Fellow
Prof. Hartmut Lehmann, Ph.D., Program Director and Visiting Research Fellow
Núria Rodríguez-Planas, Ph.D., Visiting Research Fellow

Please click here to see the full list of IZA Research Fellows affiliated with this program area.

   
Armin Falk,
Program Director, University of Bonn

Email: armin.falk@uni-bonn.de
 
Steffen Altmann,
Deputy Program Director, IZA

Tel.: +49-228-38 94 403
Email: altmann@iza.org

 

Events
Projects
Recent Discussion Papers
Selected Publications
 

Events

Date Title Location Deadline
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Projects

Understanding Default Effects: Psychological Foundations, Economic Consequences and Implications for Public Policy



Funded by: Volkswagen Foundation
Project Start: 2011/04/01
Project leader(s): Steffen Altmann (IZA)
Participants: Armin Falk (University of Bonn and IZA),  Nicolas Kaufung (IZA)
Short Description: In many important situations of economic and social life, people make choices that are embedded into a system of non-binding default rules. These default options specify what happens if a decision maker stays passive and omits making an active decision. Although from a traditional economic perspective default rules should not influence decisions, a growing body of literature documents substantial effects of default rules on behavior, e.g., in decisions on retirement savings, registration for organ donation, or purchasing of cars and other consumption goods.

The research project aims at enhancing our understanding of such default effects, their economic consequences, and policy implications. The following questions will be addressed: Why do non-binding default rules influence behavior? Are there systematic differences in the degree to which defaults affect individual behavior? How does the specification of defaults interact with other environmental factors, such as the complexity of the decision environment or the identity of the institution that implements the default rule? What are the welfare implications of default rules? In particular, can and should defaults be used as an instrument of public policy in the spirit of a “libertarian paternalistic” policy approach, and is there need for regulating the use of default rules by companies in order to protect consumers? The questions will be analyzed using a multidisciplinary approach that relies on economic theory and behavioral experiments and integrates insight from cognitive psychology and neurobiology.
Last updated: 2011/06/29
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Recent Discussion Papers

No. Author(s) Title Date PDF Link to Abstract
7411 Sebastian Fehrler, Michael Kosfeld Can You Trust the Good Guys? Trust Within and Between Groups with Different Missions May 2013 Abstract
7396 Jason M. Lindo Aggregation and the Estimated Effects of Local Economic Conditions on Health May 2013 Abstract
7395 Ana C. Dammert, Jose C. Galdo, Virgilio Galdo Digital Labor-Market Intermediation and Job Expectations: Evidence from a Field Experiment
(forthcoming in: Economics Letters, 2013)
May 2013 Abstract
7392 Albrecht Glitz Coworker Networks in the Labour Market May 2013 Abstract
7383 Behnud Mir Djawadi, René Fahr The Impact of Risk Perception and Risk Attitudes on Corrupt Behavior: Evidence from a Petty Corruption Experiment May 2013 Abstract
7382 Stephen V. Burks, Bo Cowgill, Mitchell Hoffman, Michael Housman The Value of Hiring through Referrals May 2013 Abstract
7376 Alberto Alesina, Paola Giuliano Family Ties April 2013 Abstract
7374 Johannes Abeler, Daniele Nosenzo Self-Selection into Economics Experiments Is Driven by Monetary Rewards April 2013 Abstract
7373 Johannes Abeler, Simon Jäger Complex Tax Incentives: An Experimental Investigation April 2013 Abstract
7372 Benjamin Enke, Florian Zimmermann Correlation Neglect in Belief Formation April 2013 Abstract
7365 Nattavudh Powdthavee, Warn N. Lekfuangfu, Mark Wooden The Marginal Income Effect of Education on Happiness: Estimating the Direct and Indirect Effects of Compulsory Schooling on Well-Being in Australia April 2013 Abstract
7363 Robert Dur, Jan Tichem Altruism and Relational Incentives in the Workplace April 2013 Abstract
7361 Christian Grund, Andreas Schmitt Works Councils, Quits and Dismissals in Germany April 2013 Abstract
7357 Abel Brodeur Smoking, Income and Subjective Well-Being: Evidence from Smoking Bans April 2013 Abstract
7355 Jason M. Lindo, Jessamyn Schaller, Benjamin Hansen Economic Conditions and Child Abuse April 2013 Abstract
7353 Betsey Stevenson, Justin Wolfers Subjective Well‐Being and Income: Is There Any Evidence of Satiation?
(shorter version forthcoming in: American Economic Review P&P, May 2013)
April 2013 Abstract
7350 Andrea Garnero, Francois Rycx The Heterogeneous Effects of Workforce Diversity on Productivity, Wages and Profits April 2013 Abstract
7345 Thomas Deckers, Armin Falk, Hannah Schildberg-Hörisch Nominal or Real? The Impact of Regional Price Levels on Satisfaction with Life April 2013 Abstract
7340 Chad Kendall, Tommaso Nannicini, Francesco Trebbi How Do Voters Respond to Information? Evidence from a Randomized Campaign April 2013 Abstract
7336 Gustavo Adolfo Garcia, Catia Nicodemo Job Search Channels, Neighborhood Effects and Wages Inequality in Developing Countries: The Colombian Case April 2013 Abstract
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Selected Publications


Journal Articles:

Armin Falk "Gift Exchange in the Field", in: Econometrica, 2007, 75 (5), 1501-1511.
Klaus Fliessbach, Bernd Weber, Peter Trautner, Thomas Dohmen, Uwe Sunde, Christian E. Elger, Armin Falk "Social Comparison Affects Reward-Related Brain Activity in the Human Ventral Striatum", in: Science, 2007, 318 (5854), 1305-1308.
Armin Falk, James J. Heckman "Lab Experiments Are a Major Source of Knowledge in the Social Sciences", in: Science, 2009, 326 (5952), 535 - 538.
Johannes Abeler, Steffen Altmann, Sebastian Kube, Matthias Wibral "Gift Exchange and Workers' Fairness Concerns: When Equality Is Unfair", in: Journal of the European Economic Association, 2010, 8(6).
Thomas Dohmen, Armin Falk, David Huffman, Uwe Sunde "Are Risk Aversion and Impatience Related to Cognitive Ability?", in: American Economic Review, 2010, 100(3), 1238-1260.
David A. Jaeger, Holger Bonin, Thomas Dohmen, Armin Falk, David Huffman, Uwe Sunde "Direct Evidence on Risk Attitudes and Migration", in: Review of Economics and Statistics, 2010, 92(3), 684-689.
Sebastian Goerg, Sebastian Kube, Ro'i Zultan "Treating Equals Unequally: Incentives in Teams, Workers' Motivation and Production Technology", in: Journal of Labor Economics, 2010, 28 (4), 747 - 772.
Johannes Abeler, Armin Falk, Lorenz Goette, David Huffman "Reference Points and Effort Provision", in: American Economic Review, 2011, 101 (2), 470-492.
Thomas Dohmen, Armin Falk "Performance Pay and Multidimensional Sorting: Productivity, Preferences, and Gender", in: American Economic Review, 2011, 101 (2), 556-590.
Thomas Dohmen, Armin Falk, David Huffman, Uwe Sunde "The Intergenerational Transmission of Risk and Trust Attitudes", in: Review of Economic Studies, 2012, forthcoming.
Steffen Altmann, Armin Falk, Matthias Wibral "Promotions and Incentives: The Case of Multi-Stage Elimination Tournaments", in: Journal of Labor Economics, 2012, 30 (1), 149-174.
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