Do Emotions Improve Labor Market Outcomes?

Lorenz Goette and David Huffman

Working Papers from eSocialSciences

Abstract: Traditionally, models of economic decision-making assume that individuals are rational and emotionless. This chapter argues that the neglect of emotion in economic models explains their inability to predict important aspects of the labor market. We focus on one example: the scarcity of nominal wage cuts. [IZA Discussion Paper No. 1895]

Keywords: wage rigidity; affect; emotions; money illusion; loss aversion (search for similar items in EconPapers)
Date: 2010-08
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-hpe, nep-lab, nep-neu and nep-upt
Note: Institutional Papers
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Working Paper: Do Emotions Improve Labor Market Outcomes? (2005)
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