> ... Our interpretation of these ndings is that cabdrivers (at least inexperi-
enced ones): (i) make labor supply decisions “one day at a time” instead of inter-
temporally substituting labor and leisure across multiple days, and (ii) set a loose
daily income target and quit working once they reach that target
They could maximize their earnings by working more on more profitable days and working less on the less profitable ones. However, many people overvalue stability and are scared of variable income.
https://www.cmu.edu/dietrich/sds/docs/loewenstein/NYCCabdriv...
> ... Our interpretation of these ndings is that cabdrivers (at least inexperi- enced ones): (i) make labor supply decisions “one day at a time” instead of inter- temporally substituting labor and leisure across multiple days, and (ii) set a loose daily income target and quit working once they reach that target