Anomalies: Closed-End Mutual Funds

By Charles M. C. Lee, Andrei Shleifer, and Richard H. Thaler

Journal of Economic Perspectives, Fall 1990

The pricing of closed-end funds presents several puzzles. The following are the four sets of facts that any theory of closed-end fund pricing must address. 1) New funds appear on the market at a premium and move rapidly to a discount. 2) Closed-end funds ...

Anomalies: The Ultimatum Game

By Richard H. Thaler

Journal of Economic Perspectives, Fall 1988

This paper discusses simple ultimatum games, two-stage bargaining ultimatum games, and multistage ultimatum games. Finally, I discuss ultimatums in the market. Any time a monopolist (or monopsonist) sets a price (or wage), it has the quality of an ultimat...

Unemployment in an Interdependent World

By Gabriel J. Felbermayr, Mario Larch, and Wolfgang Lechthaler

American Economic Journal: Economic Policy, February 2013

How do changes in labor market institutions, like more generous unemployment benefits in one country, affect labor market outcomes in other countries? We set up a two-country Armingtonian trade model with frictions on the goods and labor markets. Contr...

Anomalies: The January Effect

By Richard H. Thaler

Journal of Economic Perspectives, Summer 1987

This feature will report successful searches for disconfirming evidence -- economic anomalies. As suggested by Thomas Kuhn, an economic anomaly is a result inconsistent with the present economics paradigm. Economics is distinguished from other social scie...

Anomalies: Foreign Exchange

By Kenneth A. Froot and Richard H. Thaler

Journal of Economic Perspectives, Summer 1990

In what follows, we discuss the efficiency of foreign exchange markets. To manage what would otherwise be an enormous task, the question of efficiency is viewed below from the perspective of a single type of test: the test for what is called the forward d...

Anomalies: Saving, Fungibility, and Mental Accounts

By Richard H. Thaler

Journal of Economic Perspectives, Winter 1990

Last New Year's day, after a long evening of rooting the right team to victory in the Orange Bowl, I was lucky enough to win $300 in a college football betting pool. I then turned to the important matter of splurging the proceeds wisely. Would a case of c...

Anomalies: A Mean-Reverting Walk Down Wall Street

By Werner F. M. De Bondt and Richard H. Thaler

Journal of Economic Perspectives, Winter 1989

Stock prices do appear to be somewhat predictable. In particular, if one takes a long-term perspective (3-7 years) or examines individual securities that have experienced extreme price movements, then stock returns display significant negative serial corr...

Anomalies: Interindustry Wage Differentials

By Richard H. Thaler

Journal of Economic Perspectives, Spring 1989

Firms advertise widely varying wages for jobs that appear to be very similar, such as secretary, data entry clerk, or "tele-marketing representative." Students who graduate from Cornell's MBA program often receive offers from several firms in the same cit...

Anomalies: Weekend, Holiday, Turn of the Month, and Intraday Effects

By Richard H. Thaler

Journal of Economic Perspectives, Fall 1987

This feature will report successful searches for disconfirming evidence -- economic anomalies. As suggested by Thomas Kuhn, an economic anomaly is a result inconsistent with the economics paradigm. Economics is distinguished from other social sciences by ...

Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias

By Daniel Kahneman, Jack L. Knetsch, and Richard H. Thaler

Journal of Economic Perspectives, Winter 1991

A wine-loving economist we know purchased some nice Bordeaux wines years ago at low prices. The wines have greatly appreciated in value, so that a bottle that cost only $10 when purchased would now fetch $200 at auction. This economist now drinks some of ...

From Homo Economicus to Homo Sapiens

[Symposium: Forecasts for the Future of Economics]

By Richard H. Thaler

Journal of Economic Perspectives, Winter 2000

In responding to a request for predictions about the future of economics, I predict that Homo Economicus will evolve into Homo Sapiens, or, more simply put, economics will become more related to human behavior. My specific predictions are that Homo Econom...

Anomalies: The Equity Premium Puzzle

By Jeremy J. Siegel and Richard H. Thaler

Journal of Economic Perspectives, Winter 1997

The equity premium is the difference in returns between equities and fixed income securities, such as Treasury bills. The puzzle refers to the fact that the premium has historically been very large--about 6 percent per year--too large to be easily explain...

The Flypaper Effect

By James R. Hines and Richard H. Thaler

Journal of Economic Perspectives, Fall 1995

What happens to a state's spending when it receives an unconditional grant from the federal government? The standard theoretical analysis predicts that the increase in spending will be the same as that generated by an equivalent increase in local incomes-...

Behavioral Economics: Past, Present, and Future

By Richard H. Thaler

American Economic Review, July 2016

Standing United or Falling Divided? High Stakes Bargaining in a TV Game Show

By Dennie van Dolder, Martijn J. van den Assem, Colin F. Camerer, and Richard H. Thaler

American Economic Review, May 2015

We examine high stakes three-person bargaining in a game show where contestants bargain over a large money amount that is split into three unequal shares. We find that individual behavior and outcomes are strongly influenced by equity concerns: those who ...

Anomalies: Cooperation

By Robyn M. Dawes and Richard H. Thaler

Journal of Economic Perspectives, Summer 1988

Much economic analysis -- and virtually all game theory -- starts with the assumption that people are both rational and selfish. The predictions derived from this assumption of rational selfishness are, however, violated in many familiar contexts. In this...

Anomalies: Risk Aversion

By Matthew Rabin and Richard H. Thaler

Journal of Economic Perspectives, Winter 2001

Economists ubiquitously employ a simple and elegant explanation for risk aversion: It derives from the concavity of the utility-of-wealth function within the expected-utility framework. We show that this explanation is not plausible in most applications, ...

Foreword

By Richard Thaler

American Economic Review, May 2015

Anomalies: Intertemporal Choice

By George Loewenstein and Richard H. Thaler

Journal of Economic Perspectives, Fall 1989

We examine a number of situations in which people do not appear to discount money flows at the market rate of interest or any other single discount rate. Discount rates observed in both laboratory and field decision-making environments are shown to depend...

Anomalies: Ultimatums, Dictators and Manners

By Colin F. Camerer and Richard H. Thaler

Journal of Economic Perspectives, Spring 1995

The recent research on ultimatum and dictator games is reviewed. New experiments reveal that the ultimatum game is quite robust to changes in stakes and the nationality of the players but dictator games are sensitive to many design features. Information i...