This paper analyzes awards as a means of motivation prevalent in the scientific community, but so far neglected in the economic literature on incentives, and discusses their relationship to monetary compensation. Awards are better suited than performance pay to reward scientific tasks, which are typically of a vague nature. They derive their value, for instance, from signaling research talent to outsiders. Awards should therefore be taken seriously as a means of motivating research that may complement, or even substitute for, monetary incentives. While we discuss awards in the context of academia, our conclusions apply to other principal-agent settings as well.
This paper suggests a way to think about human well-being and psychological health. It distinguishes between mental stocks and flows. Central to thenanalysis is a concept we refer to as hedonic capital. This can be thought of as a level of emotional coping resources, or as the underlying stock to which the economist’s idea of a flow of utility corresponds. The model replicates the patterns found in the recent empirical psychology and economics literature: there is an approximately stable level of mental well-being and an automatic tendency to adapt back towards that level. Conventional economic theory does not fit these facts.
"This paper studies the mental distress caused by bereavement. The largest emotional losses are from the death of a spouse; the second-worst in severitynare the losses from the death of a child; the third-worst is the death of a parent. The paper explores how happiness regression equations might benused in tort cases to calculate compensatory damages for emotional harm and pain-and-suffering. We examine alternative well-being variables, discuss adaptation, consider the possibility that bereavement affects someone’s marginal utility of income, and suggest a procedure forncorrecting for the endogeneity of income. Although the paper’s contribution is methodological, and further research is needed, some illustrative compensation amounts are discussed."
In a recent paper, Hart and Moore (2008) introduce new behavioral assumptions that can explain long term contracts and important aspects of the employment relation. However, sonfar there exists no direct evidence that supports these assumptions and, in particular, Hart and Moore’s notion that contracts provide reference points. In this paper, we examine experimentally the behavioral forces stipulated in their theory. The evidence confirms the model’s prediction that there is a tradeoff between rigidity and flexibility in a tradingnenvironment with incomplete contracts and ex ante uncertainty about the state of nature. Flexible contracts – which would dominate rigid contracts under standard assumptions – cause a significant amount of shading on ex post performance while under rigid contracts much less shading occurs. Thus, although rigid contracts rule out trading in some states of thenworld, parties frequently implement them. While our results are broadly consistent with established behavioral concepts, they cannot easily be explained by existing theories. The experiment appears to reveal a new behavioral force: ex ante competition legitimizes the terms of a contract, and aggrievement and shading occur mainly about outcomes within thencontract.
If human beings care about their relative weight, a form of imitative obesity can emerge (in which people subconsciously keep up with the weight of the Joneses). Using Eurobarometer data on 29 countries, this paper provides cross-sectional evidence that overweight perceptions and dieting are influenced by a person’s relative BMI, and longitudinal evidence from the German Socioeconomic Panel that well-being is influenced by relative BMI. Highly educated people see themselves as fatter -- at any given actual weight -- than those with low education. These results should be treated cautiously, and fixed-effects estimates are not always welldetermined, but there are grounds to take seriously the possibility of socially contagious obesity.
In the course of history, a large number of politicians have been assassinated. Rational choice hypotheses are developed and tested using panel data covering more than 100 countries over a period of 20 years. Several strategies, in addition to security measures, are shown to significantly reduce the probability of politicians being attacked or killed: extended institutional and governance quality, democracy, voice and accountability, a well functioning system of law and order, decentralization via the division of power and federalism, larger cabinet size and strengthened civil society. There is also support for a contagion effect.
This paper explored the determinants of survival in a life and death situation created by an external and unpredictable shock. We are interested to see whether pro-social behaviour matters in such extreme situations. We therefore focus on the sinking of the RMS Titanic as a quasi-natural experiment do provide behavioural evidence which is rare in such a controlled and life threatening event. The empirical results support that social norm such as “women and children first” survive in such an environment. We also observe that women of reproductive age have a higher probability of surviving among women. On the other hand, we observe that crew members used their information advantage and their better access to resources (e.g. lifeboats) to generate a higher probability of surviving. The paper also finds that passenger class, fitness, group size, and cultural background matter.
Die Benediktinerklöster weisen im Vergleich zu anderen Institutionen eine ungewöhnlich lange Lebensdauer auf. Unsere empirische Untersuchung aller je existierenden Benediktinerabteien in Bayern, Baden-Württemberg und der Deutschschweiz zeigt, dass ein durchschnittliches Kloster fast 500 Jahren alt wird. Kombiniert mit dem Befund, dass nur rund ein Viertel der Klosterschliessungen auf Führungsversagen zurückzuführen ist, darf auf eine Organisationsform mit ausserordentlicher Langlebigkeit und Stabilität geschlossen werden. Dies ist nicht nur religiösen und kirchlichen Ursachen zuzuschreiben. Die Entwicklung einer ganz eigen geprägten Führungsstruktur, oder Governance, trägt wesentlich zur Erfolgsgeschichte dieser Institutionen bei. Ein ausgefeiltes System von internen und externen Kontrollmechanismen verhindert Missbrauch und Fehlverhalten von Äbten und Mönchen und fördert damit die Überlebensfähigkeit der Abteien.nIn diesem Beitrag folgt der empirischen Analyse eine detaillierte Betrachtung der benediktinischen Governance und deren Erfolgsfaktoren. Im Schlussabschnitt wird dargelegt, warum monastische Führungsprinzipien auch über das Klosterwesen hinaus Relevanz besitzen. Der Aufsatz wurde aus einer psychologisch ökonomischen Perspektive heraus verfasst:1 der erste Autor ist Betriebswirtschafter, der zweite Volkswirtschafter. Diese Herangehensweise, welche die in der Corporate Governance herausgebildeten Begrifflichkeiten aufnimmt, bedeutet in keiner Weise, dass Abteien auf rein wirtschaftliche Institutionen reduziert werden sollen.
The empirical failure of the uncovered interest rate parity condition seems to be the reflection of risk premia on foreign currencies. After the formation of foreign currency portfolios according to interest rate differentials or forward discounts, recent studies suggest that either consumption- or currency return-based pricing factors explain the cross-section of foreign currency portfolio returns. The contribution of this paper is twofold. It shows that the returnbased explanation applies to foreign currency portfolios sorted from the perspective of a Euro Area investor. Secondly, the main results of this paper suggest that the decisive pricing factor, the so called carry trade premium, mirrors business cycle related risks. Times of relatively large amounts of uninsured Euro Area consumption growth risk are associated with an expected increase of the carry trade premium.
The paper re-examines Sweden’s price level targeting during the 1930s which is regarded as a precursor of today’s inflation targeting. According to conventional wisdom the Riksbank was the first central bank to adopt price level targeting as the guideline for its activities, although in practice giving priority to exchange rate stabilisation over price level stabilisation. On the basis of econometric analysis (Bayesian VAR) and the evaluation of new archival sources we come to a more skeptical conclusion. Our results suggest that it is hard to reconcile the Riksbank’s striving for a fixed exchange rate with the claim that it adopted price level targeting. This finding has implications for the prevailing view of the 1930s as a decade of great policy innovations.
