Resource title

Loss aversion and labor supply

Resource image

image for OpenScout resource :: Loss aversion and labor supply

Resource description

In many occupations workers? labor supply choices are constrained by institutional rules regulating labor time and effort provision. This renders explicit tests of the neoclassical theory of labor supply difficult. Here we present evidence from studies examining labor supply responses in ?neoclassical environments? in which workers are free to choose when and how much to work. Despite the favorable environment the results cast doubt on the neoclassical model. They are, however, consistent with a model of reference dependent preferences exhibiting loss aversion and diminishing sensitivity.

Resource author

Lorenz Goette, David Huffman, Ernst Fehr

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/20164

Resource license

Adapt according to the presented license agreement and reference the original author.