Abstract:
Together these three chapters offer two advances in economics. The first chapter contains a review of labor economics specifically in regard to downward wage rigidity during a recession. Firm managers report in (unincentivzed) surveys that they believe nominal wage cuts would lower morale and productivity of their workforce. Next, the results from an original controlled experiment demonstrate the behavioral roots of wage rigidity. With precise measurement, we examine if the results of the surveys about wage cuts and productivity replicate. Lastly, using the same laboratory methodology, new information about how intellectual property protection incentivizes innovation illuminates the role of entrepreneurial individuals in the process of value creation from original inventions.
