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Author:Ariely, Dan 

Working Paper
Tom Sawyer and the construction of value

This paper challenges the common assumption that economic agents know their tastes. After reviewing previous research showing that valuation of ordinary products and experiences can be manipulated by non-normative cues, we present three studies showing that in some cases people do not even have a pre-existing sense of whether an experience is good or bad ? even when they have experienced a sample of it.
Working Papers , Paper 05-10

Working Paper
Large stakes and big mistakes

Most upper-management and sales force personnel, as well as workers in many other jobs, are paid based on performance, which is widely perceived as motivating effort and enhancing productivity relative to non-contingent pay schemes. However, psychological research suggests that excessive rewards can in some cases produce supra-optimal motivation, resulting in a decline in performance. To test whether very high monetary rewards can decrease performance, we conducted a set of experiments at MIT, the University of Chicago, and rural India. Subjects in our experiment worked on different tasks and ...
Working Papers , Paper 05-11

Working Paper
Dishonesty in everyday life and its policy implications

Dishonest acts are all too prevalent in day-to-day life. In the current review, we examine some possible psychological causes for such dishonesty that go beyond the standard economic considerations of probability and value of external payoffs. We propose a general model of dishonest behavior that includes also internal psychological reward mechanisms for honesty and dishonesty, and we point to the implications of this model in terms of curbing dishonesty.
Working Papers , Paper 06-3

Working Paper
How small is zero price? : the true value of free products

When faced with a choice of selecting one of several available products (or possibly buying nothing), a standard theoretical perspective suggests that the option with the highest benefit-cost difference will be chosen. This analysis applies to all prices including the price of zero. In contrast, we propose that decisions about free products are different than simply subtracting costs from benefits, and that in fact the benefits associated with free products are perceived to be higher. We test this idea by contrasting the demands for two products (types of chocolate) across conditions that ...
Working Papers , Paper 06-16

Working Paper
Doing good or doing well? Image motivation and monetary incentives in behaving prosocially

This paper examines image motivation?the desire to be liked and well-regarded by others? as a driver in prosocial behavior (doing good), and asks whether extrinsic monetary incentives (doing well) have a detrimental effect on prosocial behavior due to crowding out of image motivation. ; By definition, image depends on one?s behavior being visible to other people. Using this unique property we show that image is indeed an important part of the motivation to behave prosocially. Moreover, we show that extrinsic incentives interact with image motivation and are therefore less effective in public ...
Working Papers , Paper 07-9

Working Paper
Public and private values

This paper experimentally examines whether looking at other people's pricing decisions is a type of heuristic - a decisionmaking rule - that people use even when it is not applicable, as in the case of clearly private value goods. We find evidence that this is indeed the case - an individual's valuation of a purely subjective experience under full information, elicited using an incentive compatible mechanism, is highly influence by valuations made by others. This result can shed light on price behavior, price rigidities, and rents.
Working Papers , Paper 10-5

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