Kurs "Behavioral Labor Economics" |
 |
Prof. Dr. Armin Falk
Titel: Behavioral Labor Economics
Ort und Zeit: 2 Std., Do 9-11 in Hörsaal G (ggf. IZA, Schaumburg-Lippe-Str. 9), Beginn am 19.10.2006
Termin für die Klausureinsicht: Dienstag, 8. Mai von 17.00h bis 18.00h im IZA (Schaumburg-Lippe-Str. 7)
Kursnummer: T015 (4 Punkte)
Sprechstunde: Nach Vereinbarung (Anmeldung bei Iwona Werner, Tel.: 0228 38 94 509)
Zielpublikum: Hauptstudium und Graduiertenprogramm, Master "Economics" und Bachelor "VWL"
Course Description: (download in PDF)
The goal of behavioral economics is to increase the explanatory power of economics by providing it with a more realistic psychological foundation. This is of particular importance in labor economics, which typically studies how workers and employers interact in firms, organizations and markets. In this course we discuss the empirical relevance of non-standard preferences and boundedly rational behavior for selected labor market issues, focusing on the psychology of incentives, labor supply and market behavior. The evidence suggests that traditional labor economics tends to constrain attention to a very narrow and empirically questionable view of human motivation.
Program
I.
Introduction (Slides updated Jan. 17, 2007)
a. Advances
in Behavioral Economics, ed. By Colin C. Camerer, G. Loewenstein and M. Rabin,
b. Falk, A., Fehr, E., Why Labour Market Experiments, Labour Economics 10 (2003) 399–406.*
II.
Psychology of incentives (Slides updated Jan. 17, 2007)
a. Reciprocity
and contract enforcement
i.
Fehr, E., Falk, A., 2002. Psychological Foundations of Incentives, European Economic Review 46, 687-724.*
ii. Fehr, E., Gächter, S., Kirchsteiger, G., 1997. Reciprocity as a contract enforcement device – experimental evidence. Econometrica 65, 833–860.*
iii. Abeler, J., Altmann, S., Kube, S., Wibral, M. 2006. Reciprocity and Payment Schemes: When Equality Is Unfair, IZA DP 2500
iv.
Dohmen, T.,
Falk, A., Huffman, D., Sunde, U. 2006. Homo Reciprocans: Survey Evidence
on Prevalence, Behavior and Success, IZA DP 2205
v.
Gächter, S., Falk, A., 2002. Reputation and Reciprocity - Consequences for the Labour Relation, in: Scandinavian Journal of Economics 104 (2002), 1-26.*
vi. Fehr, E., Klein, A., Schmidt, K.M., 2007. Fairness and Contract Design. Econometrica 75, 121-154.
b. Dysfunctional
effects of explicit incentives
i. Falk, A., Kosfeld, M., 2006. The Hidden Costs of Control. American Economic Review 96, 1611-1630. *
ii.
Fehr E. and
S. Gächter, 2002. Do Incentive Contracts Crowd Out Voluntary
Cooperation?, Institute for Empirical Research in Economics,
iii.
Fehr E., Rockenbach, B., 2002. Detrimental effects of
sanctions on human altruism, NATURE 422,
iv.
Fehr. E., List J., 2004. The Hidden Costs and Returns
of Incentives – Trust and Trustworthiness among CEOs, JEEA 2, 743-771*
v.
Gneezy, U.,
Rustichini, A., 2000a. A Fine is a price. Journal of Legal Studies 29,
1–17.*
vi.
Gneezy, U., Rustichini, A., 2000b. Pay enough or don’t
pay at all. Quarterly Journal of Economics 115 (2), 791–810.*
vii.
Gneezy, U. 2004. The W effect of incentives. The University of
c. Peer
effects
i. Falk, A., Ichino, A., 2006. Clean Evidence on Peer Effects. Journal of Labor Economics 24, 39-57.*
ii.
Falk, A., Fischbacher, U., Gächter, S. 2004 Living in Two Neighborhoods - Social Interactions in the Lab,
IZA DP 1381
iii.
Ichino A. and G. Maggi, 2000. Work Environment and
Individual Background: Explaining Regional Shirking Differentials
in a Large Italian Firm. Quarterly Journal of Economics 115 (2000), 1057-1090.
iv. Zajonc, Robert B., “Social Facilitation”, Science 149 (1965), 269-274.
d. Sorting
i.
Dohmen, T., Falk, A., 2006. Performance Pay and
Multi-Dimensional Sorting: Productivity, Preferences and Gender, IZA DP 2001*
e. Loss
aversion, collusion and sabotage in the presence of tournament incentives
i.
Bull, C., Schotter, A., Weigelt, K., 1987. Tournaments
and piece rates: an experimental study. Journal of Political Economy 95, 1 –
33.
ii.
Falk, A., Fehr, E. 2002. The Power and Limits of
Tournament Incentives, unpublished manuscript.
iii.
Harbring, C., Irlenbusch, B., 2003. An experimental
study on tournament design. Labour Economics 10, 443–464.
III.
Labor supply (Slides1 updated Dec. 21, 2006, Slides2 updated Jan. 15, 2007)
i.
Camerer, C., Babcock, L., Loewenstein, G., Thaler, R.,
1997. Labor Supply of
ii. Fehr, E., Götte, L., 2005. Do Workers Work More if Wages Are High? Evidence from a Randomized Field Experiment. IEW Working Paper No. 125 (forthcoming in American Economic Review)
iii.
Götte, L., Huffman, D., 2006. Incentives and the
Allocation of Effort Over Time: The Joint Role of Affective and Cognitive
Decision Making. IZA Discussion Paper No. 2400.
IV.
Market behavior (Slides updated Jan. 17, 2007)
a. Monopsony
and minimum wages
i.
Card, David and Krueger, Alan B. 1994. Minimum Wages
and Employment: A Case Study of the Fast-Food Industry in
ii. Falk, A., Fehr, E., Zehnder, C., 2006. Fairness Perceptions and Reservation Wages – The Behavioral Effects of Minimum Wage Laws. Quarterly Journal of Economics 121, 1347-1381.*
b. Fairness,
efficiency wages and wage rigidities
i.
Fehr, E., Kirchsteiger, G., Riedl, A., 1993. Does
fairness prevent market clearing? An experimental investigation. Quarterly
Journal of Economics 58, 437– 460.
ii.
Fehr, E. and Falk, A. 1999. Wage Rigidity in a
Competitive Incomplete Contract Market. Journal of Political Economy 10.
106-134.*
c. Incomplete
contracts, fairness and the functioning of markets
i. Brown, M., Falk, A., Fehr, E. 2004 Relational Contracts and the Nature of Market Interactions”, Econometrica 72, 747-781.*
ii. Kirchsteiger, G., Niederle, M., Potters, J., 2005. Endogenizing Market Institutions: An Experimental Approach. European Economic Review 49, 1827-1853.
iii.
Brown,
M., Falk, A., Fehr, E., 2003. Competition and Implicit Contracts. Working
paper, Institute for Empirical Research in Economics,