Inconsistent time preferences and on-the-job search - when it pays to be naive

Matthias Fahn and Regina Seibel

No 7604, CESifo Working Paper Series from CESifo

Abstract: We study optimal employment contracts for present-biased employees who can conduct on-the-job search. Presuming that firms cannot offer long-term contracts, we find that individuals who are naive about their present bias will actually be better off than sophisticated or time-consistent individuals. Moreover, they search more, which partially counteracts the inefficiencies caused by their present bias.

Keywords: present bias; on-the-job search (search for similar items in EconPapers)
JEL-codes: D21 D83 D90 J31 J32 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-lma, nep-mic and nep-upt
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Related works:
Working Paper: Inconsistent Time Preferences and On-the-job Search - When it Pays to be Naive (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7604

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