Essays in Behavioral Economics

Abstract

<p>This dissertation aims at continuing and expanding three lines of research prominent in behavioral economics today. The first chapter deals with the role of reciprocity in labor contracts and explores which factors determine whether a payment scheme is perceived as fair. The second chapter studies whether people integrate money from various income sources. This question is related to the notion of fungibility and narrow bracketing. Chapter 3 tests whether people evaluate their outcome in comparison to a reference point. More specifically, it tests whether an individual's rational expectations serve as a reference point.<br /> Even though the three chapters cover different areas of behavioral economics, they share the same underlying questions: To which degree are fundamental assumptions of economics in line with real world behavior and where do they need to be refined? And how can we use this new knowledge to design economic institutions serving people that are neither fully rational nor completely selfish? All chapters present empirical analyses of laboratory or field experiments. Experiments provide a maximum of control and allow for a causal interpretation as treatments are assigned exogenously. The results presented in this dissertation are potentially important for many fundamental economic questions, especially in the areas of labor and public economics, but also for the understanding of investment and consumption decisions.<br /></p>