Present bias in the labor market-when it pays to be naive

• 成果类型: Article
• 署名作者: Fahn, Matthias; Seibel, Regina
• 署名单位: Johannes Kepler University Linz; Leibniz Association; Ifo Institut; University of Zurich
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2022.06.003
• 发表日期: 2022
• 页码: 144-167
• 关键词: Present bias; labor markets; On-the-job search; moral hazard

摘要

We study optimal employment contracts for present-biased employees if firms cannot commit to long-term contracts. Assuming that an employee's effort increases his chances to obtain a future benefit, we show that individuals who are naive about their present bias will actually be better off than sophisticated or time-consistent individuals. Moreover, firms might benefit from being ignorant about the extent of an employee's naivet & eacute;. Our results also indicate that naive employees might be harmed by policies such as employment protection or a minimum wage, whereas sophisticated employees are better off. (C) 2022 The Author(s). Published by Elsevier Inc.