Horvath Gergely, Assistant Professor of Economics is scheduled to give a seminar to introduce his research concept (see below). Please email fx28@duke.edu if you want to get the Zoom link.

Presentation date& time: March 12 (Friday) 9:30-10:30am Beijing Time via Zoom

• 9:00 -9:30 presentation
• 9:30-10:00 Q&A

In an online experiment, we study the effectiveness of policy interventions in reducing the impact of behavioral biases on the job search. Due to the present bias, individuals set a lower search effort and a lower reservation wage than the optimal values, while the sunk-cost fallacy makes individuals reduce their reservation wage over the search spell. We compare the effects of search cost reduction and nudging on alleviating these biases. We find that search cost reduction increases the investment in the search effort and the individual welfare but not the reservation wage. Conversely, nudging increases the reservation wage, but not the investment in search effort or individual welfare. Furthermore, we show that both search cost reduction and nudging are effective in alleviating the impact of sunk-cost fallacy on the choice of the reservation wage. Our results suggest that behavioral interventions should be part of active labor market policies.

  • Andrew Schotter, Professor of Economics, NYU