(Job Market Paper)
This paper examines how past effort can impact current effort, such as when effort is reduced following an interruption. I study 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. When employing an instrumental variables (IV) approach, approximately 50% of the effort increase persists for 5 minutes after incentives return to baseline. Thus, if a worker suffers a complete interruption in productivity, it would take an average of 15 minutes to return to 90% of prior work effort. While there are serious caveats with extrapolation, these findings indicate the productivity loss due to effort momentum alone costs the US economy as much as $200 billion annually. I further demonstrate that advanced knowledge does not significantly reduce this productivity loss. This finding of effort momentum is especially important for potential labor economics studies that intend to employ individual fixed effects.
(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.