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Do High Stakes and Competition Undermine Fairness? Evidence from Russia

This paper reports the results of a series of competitive labour market experiments in which subjects have the possibility to reciprocate favours. In the high stake condition subjects earned between two and three times their monthly income during the experiment. In the normal stake condition the stake level was reduced by a factor of ten. We observe that both in the high and the…

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English / 01/07/2002

Resuscitating the Cobweb Cycle

"This note shows that permanent fluctuations in the Cobweb model — though inconsistent with a rational expectations equilibrium — can be justified as being rational when reinterpreting the model in the theory of rational beliefs."

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English / 01/07/2002

How Special Interests Shape Policy - A Survey

This paper surveys recent approaches towards lobbying if interest groups influence the decision of an incumbent government. It describes the two main channels of influence which mainly exist in parallel, namely contribution payments and the transmission of information through lobbying. Recent extensions to the two basic lobbying models are discussed in great detail. Thereafter…

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English / 01/07/2002

Subjektive Daten in der empirischen Wirtschaftsforschung: Probleme und Perspektiven

Preise, Einkommen, und Nachfrage – die zentralen zu erklaerenden Variablen in den Wirtschaftswissenschaften sind objektiv messbar. Daneben gibt es jedoch zwei nicht minder zentrale Groessen, Erwartungen und Praeferenzen, die sich einer direkten objektiven Messung entziehen. Es sind subjektive Variablen, also solche, die von persoenlichen Meinungen und Erfahrungen bestimmt sind.…

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English / 01/07/2002

Museums between Private and Public - The Case of the Beyeler Museum

"In Europe, ever more private museums are now entering the field. This paper investigates the behavior of one of these private museums, using an institutional approach of cultural economics. The Beyeler museum in Basle, Switzerland, is a privately founded art museum with an extraordinary collection of art works. Though less than five years old, it is acknowledged to be the most…

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English / 01/06/2002

"Publishing as Prostitution? Choosing Between One‘s Own Ideas and Academic Failure"

Survival in academia depends on publications in refereed journals. Authors only get their papers accepted if they intellectually prostitute themselves by slavishly following the demands made by anonymous referees without property rights on the journals they advise. Intellectual prostitution is neither beneficial to suppliers nor consumers. But it is avoidable. The editor (with…

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English / 01/06/2002

Lobbying Activities of Multinational Firms

This paper investigates if multinationals in.uence the political process through lobbying more effectively than national firms. First, I introduce a model which contrasts a multinational’s incentives for lobbying with those of a national firm. Then the effect of lobbying on the political decision is analyzed. I conclude that multinationals have smaller incentives to lobby because…

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English / 01/06/2002

Product-Market Competition in the Water Industry: Voluntarily Nondiscriminatory Pricing

This paper presents an attempt to create competition in the water market by means of direct competition. We argue that the usual liberalisation device, competition for the market by franchise bidding, is problematic due to particular features in the water industry. Our approach proposes the implementation of product market competition, i.e. competition in the market. In such a…

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English / 01/05/2002

From Imperialism to Inspiration: A Survey of Economics and Psychology

Economics and psychology are both sciences of human behaviour. This paper gives a survey of their interaction. First, the changing relationship between the two sciences isndiscussed: while economics was once imperialistic, it has become a science inspired by psychological insights. In order to illustrate this, recent developments and evidence for three major areas are presented:…

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English / 01/05/2002

Do Incentive Contracts Undermine Voluntary Cooperation?

In this paper we provide experimental evidence indicating that incentive contracts may undermine voluntary cooperation. This suggests that explicit incentives may have costly side effects that have been largely neglected by economists. In our experiments the undermining effect is so strong that the incentive contracts are less efficient than contracts without any incentives. Buyers,…

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English / 01/04/2002

Benefit Entitlement and Unemployment Duration: The Role of Policy Endogeneity

"The potential duration of benefits is generally viewed as an important determinant of unemployment duration. This paper evaluates a unique policy change that prolonged entitlement to regular unemployment benefits from 30 weeks to a maximum of 209 weeks for elderly individuals in certain regions of Austria. In the evaluation, we explicitly account for the fact that the program…

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English / 01/04/2002

On the Micro-foundations of Money: The Capitol Hill Baby-Sitting Co-op

We suggest a new micro-foundation of money in which markets are well-organized but consumers' preferences are stochastic. In this model, we solve for stationary equilibria and show that there is an optimum quantity of money. The rational solution of our model is compared with actual behavior in a laboratory experiment. It turns out that the experiment gives support to our…

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English / 01/03/2002

The Effect of Benefit Sanctions on the Duration of Unemployment

This paper investigates the effectiveness of benefit sanctions in reducing unemployment duration. Data from the Swiss labor market allow making a distinction between the effect of a warning that a person is not complying with eligibility requirements and the effect of the actual enforcement of a benefit sanction. We find that both warning and enforcement have a positive effect on the…

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English / 01/03/2002

Structural Change and the Kaldor Facts of Economic Growth

"We present a model in which two of the most important features of the long-run growth process are reconciled: the massive changes in the structure of production and employment; and the Kaldor facts of economic growth. We assume that households expand their consumption along a hierarchy of needs and firms introduce continuously new products. In equilibrium industries with an…

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English / 01/03/2002

Why do firms recruit internationally? Result from the IZA International Employer Survey 2000

The paper studies the demand for foreign university graduates at the firm level. Using a unique dataset on recruitment policies of firms in four European countries, the determinants of demand for internationally mobile highly skilled employees are established. I investigate the number, origin, skills, and functions of foreign graduates, as well as the experiences of firms recruiting…

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English / 01/03/2002

Work and health in Switzerland: Immigrants and Natives

This paper is concerned with a comparison of immigrants and Swiss citizens with respect to level of education, labor market outcomes and healthcare utilization. The evidence is based on data for 1999 from the first wave of the Swiss Household Panel. In order to control for confounding influences, linear and non-linear (negative binomial) regressio nmodels are used. The main result is…

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English / 01/03/2002

Work and health in Switzerland: Immigrants and Natives

This paper is concerned with a comparison of immigrants and Swiss citizens with respect to level of education, labor market outcomes and healthcare utilization. The evidence is based on data for 1999 from the first wave of the Swiss Household Panel. In order to control for confounding influences, linear and non-linear (negative binomial) regressio nmodels are used. The main result is…

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English / 01/03/2002

Contractual Incompleteness and the Nature of Market Interactions

"We provide experimental evidence that contractual incompleteness, i.e., the absence of third party enforcement of workers’ effort or the quality of the good traded, causes a fundamental change in the nature of market interactions. If contracts are complete the vast majority of trades are initiated by public offers. Most trades take place in one-shot transactions and…

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English / 01/02/2002

The Impact of Active Labor Market Programs on the Duration of Unemployment

In 1997, the Swiss government introduced active labor market programs on a large scale to improve the job chances of unemployed workers. This paper evaluates the effect of these programs on the duration of unemployment. Our evaluation methodology allows for selectivity affecting the inflow into programs. We find that in most cases the programs do not reduce the duration of…

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English / 01/02/2002

Pro-Social Behavior, Reciprocity or Both?

Empirical evidence is provided for the importance of non-reciprocal pro-social behavior of individuals in an anonymous, n-person pure public good setting. A unique panel data set of 136,000 observations is matched with an extensive survey.nEven under anonymous conditions, a large number of individuals are prepared to donate a not insignificant sum of money. Cooperation conditional on…

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English / 01/02/2002

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