Business students are portrayed as behaving too egoistically. The critics call for more socialnresponsibility and good citizenship behavior on the part of business students. We present evidence ofnpro-social behavior in business students. Every student at the University of Zurich has to decide eachnsemester whether he/she wants to contribute to two social funds administrated by the University. Withnthis large panel data set, we can analyze whether business students indeed behave less pro-socially thannother students. Two specific hypotheses are tested: do students select into business studies or does thentraining in business studies indoctrinate students in a negative way? The evidence suggests that therenmay be a selection effect going on. Therefore, economics education does not change the citizenshipnbehavior of business students.
"Happiness research in economics takes reported subjective well-being as a proxynmeasure for utility and has already provided many interesting insights about human well-beingnand its determinants. We argue that future research on happiness in economics has a lot ofnpotential, but that it needs to be guided more by theory. We propose two ways to test theories ofnhappiness, and illustrate them with two applications. First, reported subjective well-being canncontribute towards a new understanding of utility in economics. Here, we study the introductionnof income aspirations in individuals’ utility functions in order to improve our understanding ofnhow income affects individual well-being. Second, happiness data offers a new possibility ofndiscriminating between different models of behavior. This is studied for theories of marriage,nwhich crucially depend on auxiliary assumptions as to what contributes to well-being innmarriage. Both applications are empirically tested with panel data for Germany."
We present an economic experiment on network formation, in which subjects can decide to form links to one another. Direct links are costly but being connected is valuable. The game-theoretic basis for our experiment is the model of Bala and Goyal (2000). They distinguish between two scenarios regarding the flow of benefits through a network, the so-called 1-way and 2-way flow model. Our main results show that the prediction based on Nash and strict Nash equilibrium works well in the 1-way flow model but fails largely in the 2-way flow model. We observe a strong learning dynamic in the 1-way flow model but less so in the 2-way flow model. Finally, costs of a direct link have a positive impact on the occurrence of (strict) Nash networks in the 1-way flow model but a negative impact in the 2-way flow model. In our discussionnon possible explanations for these results we focus on strategic asymmetry and asymmetry with respect to payoffs. We find that the latter asymmetry, i.e., payoff inequity, plays an importantnrole in the network formation process.
"Typically, laboratory experiments suffer from homogeneous subject pools and self-selection biases. The usefulness of survey data is limited by measurement error and by the questionability of their behavioral relevance. Here we present a method integrating interactive experiments and representative surveys thereby overcoming crucial weaknesses of both approaches. One of the major advantages of our approach is that it allows for the integration of experiments, which require interaction among the participants, with a survey of non-interacting respondents in a smooth and inexpensive way. We illustrate the power of our approach with the analysis of trust and trustworthiness in Germany by combining representative survey data with representative behavioral data from a social dilemma experiment. We identify which survey questions intended to elicit people’s trust correlate well with behaviorally exhibited trust in the experiment. People above the age of 65, highly skilled workersnand people living in bigger households exhibit less trusting behavior. Foreign citizens, Catholics andnpeople favoring the Social Democratic Party or the Christian Democratic Party exhibit more trust.nPeople above the age of 65 and those in good health behave more trustworthy or more altruistically,nrespectively. People below the age of 35, the unemployed and people who say they are in favor ofnnone of the political parties behave less trustworthy or less altruistically, respectively."
In recent years a large number of experimental studies have documented the existence of strong reciprocity among humans. Strong reciprocity means that people willingly repay gifts and punish the violation of cooperation and fairness norms even in anonymous one-shot encounters with genetically experimental evidence suggesting that ultimate evolutionary explanations of strong reciprocity. can rationalize strong reciprocity only if it is viewed as maladaptive behavior whereas the evidence suggests that it is an adaptive trait. Thus, we conclude that alternative evolutionary approaches are needed to provide ultimate accounts of strong reciprocity.
Based on an experimental analysis of a simple monetary economy we argue that a monetarynsystem is more stable than one would expect from individual rationality. We show thatnpositive reciprocity stabilizes the monetary system, provided every participant considers thenfeedbacks of his choice to the stationary equilibrium. If however the participants do not playnstationary strategies and some participants notoriously refuse to accept money then due tonnegative reciprocity their behavior will eventually induce a break down of the monetarynsystem.
Deterrence has been a crucial element in fighting terrorism, both in actual politics and rational choice analyses of terrorism. But there are superior strategies to deterrence. One is to make terrorist attacks less attractive. Another to raise the opportunity cost – rather than the material cost – to terrorists. These alternative strategies effectively dissuade potential terrorists. The strategies suggested here build on the “benevolence” system and tend to produce a positive sum game among the interacting parties. In contrast, the deterrence system is based on “threats” and tends to produce a negative sum game interaction.
Present anti-terrorist policy concentrates almost exclusively on deterrence. It seeks to fend off terrorism by raising the cost of undertaking terrorist acts. This paper argues that deterrence policy is less effective than generally thoughtnand induces in some cases even more terrorism. This is, in particular, the case if deterrence policy induces a centralisation of decision-making in the polity and economy. Therefore, an effective anti-terrorist policy should focus more on reducing the expected benefits of terrorist acts to prospective terrorists. Such a policy is based on strengthening rather than weakening decentralised decision-making.
