An anonymous social choice function for a large atomless population maps cross-section distributions of preferences into outcomes. Because any one individual is too insignificant to affect these distributions, every anonymous social choice function is individually strategy-proof. However, not every anonymous social choice function is group strategy-proof. If the set of outcomes is linearly ordered and participants have single-peaked preferences, an anonymous social choice function is group strategy-proof if and only if it can be implemented by a mechanism involving binary votes between neighbouring outcomes with nondecreasing thresholds for “moving higher up”. Such a mechanism can be interpreted as a version of Moulin’s (1980) generalized median-voter mechanism for a large population.
{"title":"Social Choice in Large Populations with Single-Peaked Preferences","authors":"M. Hellwig","doi":"10.2139/ssrn.3941828","DOIUrl":"https://doi.org/10.2139/ssrn.3941828","url":null,"abstract":"An anonymous social choice function for a large atomless population maps cross-section distributions of preferences into outcomes. Because any one individual is too insignificant to affect these distributions, every anonymous social choice function is individually strategy-proof. However, not every anonymous social choice function is group strategy-proof. If the set of outcomes is linearly ordered and participants have single-peaked preferences, an anonymous social choice function is group strategy-proof if and only if it can be implemented by a mechanism involving binary votes between neighbouring outcomes with nondecreasing thresholds for “moving higher up”. Such a mechanism can be interpreted as a version of Moulin’s (1980) generalized median-voter mechanism for a large population.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125399491","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper studies efficient public-good provision in a model with private values whose distribution depends on a macro shock; conditionally on this shock, values are independent and identically distributed. A generalization of the Bayesian mechanism of d’Aspremont and Gérard-Varet is shown to implement an efficient provision rule with budget balance. However, first-best implementation and budget balance are incompatible with a requirement of weak robustness whereby incentive compatibility of the mechanism is independent of the stochastic specification within the class of specifications defined by the structure of the model. Budget imbalances with robust implementation are small if there are many participants, as surplus from the Clarke-Groves mechanism converges to zero in probability when the number of participants becomes large. In the limit, with a continuum of agents, a first-best provision rule with equal cost sharing is robustly incentive-compatible. In this limit, information about the macro shock, which is the only thing that matters for public-good provision, can be elicited without any efficiency loss.
{"title":"Public-Good Provision with Macro Uncertainty about Preferences: Efficiency, Budget Balance, and Robustness","authors":"M. Hellwig","doi":"10.2139/ssrn.3941832","DOIUrl":"https://doi.org/10.2139/ssrn.3941832","url":null,"abstract":"The paper studies efficient public-good provision in a model with private values whose distribution depends on a macro shock; conditionally on this shock, values are independent and identically distributed. A generalization of the Bayesian mechanism of d’Aspremont and Gérard-Varet is shown to implement an efficient provision rule with budget balance. However, first-best implementation and budget balance are incompatible with a requirement of weak robustness whereby incentive compatibility of the mechanism is independent of the stochastic specification within the class of specifications defined by the structure of the model. Budget imbalances with robust implementation are small if there are many participants, as surplus from the Clarke-Groves mechanism converges to zero in probability when the number of participants becomes large. In the limit, with a continuum of agents, a first-best provision rule with equal cost sharing is robustly incentive-compatible. In this limit, information about the macro shock, which is the only thing that matters for public-good provision, can be elicited without any efficiency loss.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121766158","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper contributes to a symposium of the Oxford Review of Economic Policy on “Capitalism: What has Gone Wrong, What Needs to Change, and How can it be Fixed?”. The analysis starts from the observation that, in the United States, the United Kingdom and continental Europe, widespread discontent has become an important political force. I attribute this discontent to a sense on unfairness in developments of the past few decades. I relate this sense of unfairness to: (i) negative effects of structural change, including joblessness and regional decline, (ii) the observation of extraordinary growth in executive remuneration and financial-sector remuneration, coupled with government bailouts in the global financial crisis, and (iii) changes in public policy and public discourse, with a retrenchment of public services and public investment, except for bailouts and a focus on “efficiency”, the meaning of which is driven by the perceptions of corporate executives rather than standard welfare economics. To capture these developments, one needs to think about “capitalism” in the sense of French “capitalism” or German “Kapitalismus”, with a focus on the symbiosis of wealth and power, including the elimination of competition, rather than the English sense of merely another term for the market economy.
这篇论文是《牛津经济政策评论》(Oxford Review of Economic Policy)关于“资本主义:哪里出了问题，什么需要改变，以及如何修复?”的研讨会的一部分。分析的出发点是观察到，在美国、英国和欧洲大陆，普遍的不满情绪已经成为一股重要的政治力量。我把这种不满归因于对过去几十年发展中的不公平的感觉。我把这种不公平的感觉与:(i)结构性变化的负面影响，包括失业和区域衰退;(ii)观察到高管薪酬和金融部门薪酬的异常增长，加上全球金融危机中的政府救助;(iii)公共政策和公共话语的变化，除了救助和对“效率”的关注外，公共服务和公共投资有所缩减。它的含义是由企业高管的观念而不是标准的福利经济学所驱动的。为了抓住这些发展，人们需要从法语的“资本主义”或德语的“资本主义”的意义上思考“资本主义”，关注财富和权力的共生关系，包括消除竞争，而不是从英语的意义上仅仅是市场经济的另一个术语。
{"title":"'Capitalism: What Has Gone Wrong?' Who Went Wrong? Capitalism? The Market Economy? Governments? 'Neoliberal' Economics?","authors":"M. Hellwig","doi":"10.2139/ssrn.3903244","DOIUrl":"https://doi.org/10.2139/ssrn.3903244","url":null,"abstract":"The paper contributes to a symposium of the Oxford Review of Economic Policy on “Capitalism: What has Gone Wrong, What Needs to Change, and How can it be Fixed?”. The analysis starts from the observation that, in the United States, the United Kingdom and continental Europe, widespread discontent has become an important political force. I attribute this discontent to a sense on unfairness in developments of the past few decades. I relate this sense of unfairness to: (i) negative effects of structural change, including joblessness and regional decline, (ii) the observation of extraordinary growth in executive remuneration and financial-sector remuneration, coupled with government bailouts in the global financial crisis, and (iii) changes in public policy and public discourse, with a retrenchment of public services and public investment, except for bailouts and a focus on “efficiency”, the meaning of which is driven by the perceptions of corporate executives rather than standard welfare economics. To capture these developments, one needs to think about “capitalism” in the sense of French “capitalism” or German “Kapitalismus”, with a focus on the symbiosis of wealth and power, including the elimination of competition, rather than the English sense of merely another term for the market economy.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133589347","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Matthias Sutter, Michael Weyland, Anna Untertrifaller, Manuel Froitzheim
We present the results of a randomized intervention in schools to study how teaching financial literacy affects risk and time preferences of adolescents. Following more than 600 adolescents, aged 16 years on average, over about half a year, we provide causal evidence that teaching financial literacy has significant short-term and longer-term effects on risk and time preferences. Compared to two different control treatments, we find that teaching financial literacy makes subjects more patient, less present-biased, and slightly more risk-averse. Our finding that the intervention changes economic preferences contributes to a better understanding of why financial literacy has been shown to correlate systematically with financial behavior in previous studies. We argue that the link between financial literacy and field behavior works through economic preferences. In our study, the latter are also related in a meaningful way to students’ field behavior.
{"title":"Financial Literacy, Risk and Time Preferences – Results from a Randomized Educational Intervention","authors":"Matthias Sutter, Michael Weyland, Anna Untertrifaller, Manuel Froitzheim","doi":"10.2139/ssrn.3676095","DOIUrl":"https://doi.org/10.2139/ssrn.3676095","url":null,"abstract":"We present the results of a randomized intervention in schools to study how teaching financial literacy affects risk and time preferences of adolescents. Following more than 600 adolescents, aged 16 years on average, over about half a year, we provide causal evidence that teaching financial literacy has significant short-term and longer-term effects on risk and time preferences. Compared to two different control treatments, we find that teaching financial literacy makes subjects more patient, less present-biased, and slightly more risk-averse. Our finding that the intervention changes economic preferences contributes to a better understanding of why financial literacy has been shown to correlate systematically with financial behavior in previous studies. We argue that the link between financial literacy and field behavior works through economic preferences. In our study, the latter are also related in a meaningful way to students’ field behavior.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"98 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133708877","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Narratives pervade almost any aspect of our life and play a particularly important role in moral and prosocial decision-making. We study how positive (stories in favor of a prosocial action) and negative (stories in favor of a selfish action) narratives influence prosocial behavior. Our main findings are that positive narratives increase giving substantially, especially for selfish types, compared to a baseline with no narratives. Negative narratives, on the other hand, have a differential effect. Prosocial types decrease their giving, while selfish types give more than in the baseline. We also find that positive narratives lead to a binary response (comply or not comply), while negative narratives induce a more gradual trade-off.
{"title":"The Differential Effect of Narratives on Prosocial Behavior","authors":"Adrian Hillenbrand, Eugenio Verrina","doi":"10.2139/ssrn.3303744","DOIUrl":"https://doi.org/10.2139/ssrn.3303744","url":null,"abstract":"Narratives pervade almost any aspect of our life and play a particularly important role in moral and prosocial decision-making. We study how positive (stories in favor of a prosocial action) and negative (stories in favor of a selfish action) narratives influence prosocial behavior. Our main findings are that positive narratives increase giving substantially, especially for selfish types, compared to a baseline with no narratives. Negative narratives, on the other hand, have a differential effect. Prosocial types decrease their giving, while selfish types give more than in the baseline. We also find that positive narratives lead to a binary response (comply or not comply), while negative narratives induce a more gradual trade-off.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"73 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127396871","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the enforcement of fines. We randomly assign 80,000 speeding tickets to treatments that increase the salience of the payment deadline, late penalties, or both. Stressing the penalties significantly and persistently increases payment rates. Emphasizing only the deadline is not effective. The findings from the RCT are consistent with a survey experiment which documents the treatments' impact on priors about parameters of the compliance problem. Exploiting discontinuous variation in fines, we then document a strong price responsiveness: a 1% increase in the payment obligation induces a 0.23 percentage point decrease in timely compliance. This semi-elasticity suggests that the impact of the salience nudges is equivalent to the effect of a 4-9% reduction in fines.
{"title":"Salience, Incentives, and Timely Compliance: Evidence from Speeding Tickets","authors":"L. Dušek, Nicolas Pardo, C. Traxler","doi":"10.2139/ssrn.3600770","DOIUrl":"https://doi.org/10.2139/ssrn.3600770","url":null,"abstract":"This paper studies the enforcement of fines. We randomly assign 80,000 speeding tickets to treatments that increase the salience of the payment deadline, late penalties, or both. Stressing the penalties significantly and persistently increases payment rates. Emphasizing only the deadline is not effective. The findings from the RCT are consistent with a survey experiment which documents the treatments' impact on priors about parameters of the compliance problem. Exploiting discontinuous variation in fines, we then document a strong price responsiveness: a 1% increase in the payment obligation induces a 0.23 percentage point decrease in timely compliance. This semi-elasticity suggests that the impact of the salience nudges is equivalent to the effect of a 4-9% reduction in fines.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132354508","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Parampreet Christopher Bindra, Rudolf Kerschbamer, Daniel Neururer, Matthias Sutter
Credence goods markets with their asymmetric information between buyers and sellers are prone to large inefficiencies. In theory, poorly informed consumers can protect themselves from maltreatment through sellers by asking for second opinions from other sellers. Yet, empirical evidence whether this is a successful strategy is scarce. Here we present a natural field experiment in the market for computer repairs. We find that revealing a second opinion from another expert to the seller does neither increase the rate of successful repairs nor decrease the average repair price. We assess under which conditions gathering a second opinion can be valuable.
{"title":"Reveal It or Conceal It: On the Value of Second Opinions in a Low-Entry-Barriers Credence Goods Market","authors":"Parampreet Christopher Bindra, Rudolf Kerschbamer, Daniel Neururer, Matthias Sutter","doi":"10.2139/ssrn.3604912","DOIUrl":"https://doi.org/10.2139/ssrn.3604912","url":null,"abstract":"Credence goods markets with their asymmetric information between buyers and sellers are prone to large inefficiencies. In theory, poorly informed consumers can protect themselves from maltreatment through sellers by asking for second opinions from other sellers. Yet, empirical evidence whether this is a successful strategy is scarce. Here we present a natural field experiment in the market for computer repairs. We find that revealing a second opinion from another expert to the seller does neither increase the rate of successful repairs nor decrease the average repair price. We assess under which conditions gathering a second opinion can be valuable.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123611681","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
M. Stefan, J. Huber, Michael Kirchler, Matthias Sutter, M. Walzl
Rankings are intended as incentive tools on labor markets. Yet, when agents perform multiple tasks - not all of which can be ranked with respect to performance -, rankings might have unintended side-effects. Based on a dynamic model of multi-tasking, we present an experiment with financial professionals in which we identify hidden ranking costs when performance in one task is ranked while in another prosocial task it is not. We find that subjects lagging behind (leading) in the ranked task devote less (more) effort to the prosocial task. We discuss implications for optimal incentive schemes in organizations with multitasking.
{"title":"Monetary and Social Incentives in Multi-Tasking: The Ranking Substitution Effect","authors":"M. Stefan, J. Huber, Michael Kirchler, Matthias Sutter, M. Walzl","doi":"10.2139/ssrn.3604902","DOIUrl":"https://doi.org/10.2139/ssrn.3604902","url":null,"abstract":"Rankings are intended as incentive tools on labor markets. Yet, when agents perform multiple tasks - not all of which can be ranked with respect to performance -, rankings might have unintended side-effects. Based on a dynamic model of multi-tasking, we present an experiment with financial professionals in which we identify hidden ranking costs when performance in one task is ranked while in another prosocial task it is not. We find that subjects lagging behind (leading) in the ranked task devote less (more) effort to the prosocial task. We discuss implications for optimal incentive schemes in organizations with multitasking.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"346 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122559421","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Volunteering is a widespread allocation mechanism at the workplace and emerges naturally in open-source software development, the generation of online knowledge platforms, and to some extent in “agile” work environments. Using a field experiment with 8 treatments and close to 2,800 workers on an online labor market, we study the effect of team size on volunteering at the workplace under incomplete information. In stark contrast to the theoretical predictions, we find no effect of team size on volunteering behavior. With the use of our control treatments, we can show that workers react to free-riding incentives provided by the volunteering setting in general, but do not react strategically to the team size. We show that the result is robust to several further factors.
{"title":"Volunteering at the Workplace under Incomplete Information: Teamsize Does Not Matter","authors":"Adrian Hillenbrand, T. Werner, Fabian Winter","doi":"10.2139/ssrn.3537569","DOIUrl":"https://doi.org/10.2139/ssrn.3537569","url":null,"abstract":"Volunteering is a widespread allocation mechanism at the workplace and emerges naturally in open-source software development, the generation of online knowledge platforms, and to some extent in “agile” work environments. Using a field experiment with 8 treatments and close to 2,800 workers on an online labor market, we study the effect of team size on volunteering at the workplace under incomplete information. In stark contrast to the theoretical predictions, we find no effect of team size on volunteering behavior. With the use of our control treatments, we can show that workers react to free-riding incentives provided by the volunteering setting in general, but do not react strategically to the team size. We show that the result is robust to several further factors.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115673110","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Rapid technological developments in online markets fundamentally change the relationship between consumers and sellers. Online platforms can now easily gather data about the consumer and his search behavior, that allow for price discrimination. Therefore the consumers’ product search becomes a strategic choice. Consumers face a trade-off: Search intensely and receive a better fit at a potentially higher price or restrict search behavior – be strategically inattentive – and receive a worse fit, but maybe a better deal. We study the resulting strategic buyer-seller interaction theoretically as well as experimentally. Our experimental results shed a critical light on the added value for consumers through the rise of online platforms.
{"title":"Strategic Inattention in Product Search","authors":"Adrian Hillenbrand, Svenja Hippel","doi":"10.2139/ssrn.3048205","DOIUrl":"https://doi.org/10.2139/ssrn.3048205","url":null,"abstract":"Rapid technological developments in online markets fundamentally change the relationship between consumers and sellers. Online platforms can now easily gather data about the consumer and his search behavior, that allow for price discrimination. Therefore the consumers’ product search becomes a strategic choice. Consumers face a trade-off: Search intensely and receive a better fit at a potentially higher price or restrict search behavior – be strategically inattentive – and receive a worse fit, but maybe a better deal. We study the resulting strategic buyer-seller interaction theoretically as well as experimentally. Our experimental results shed a critical light on the added value for consumers through the rise of online platforms.","PeriodicalId":247961,"journal":{"name":"Max Planck Institute for Research on Collective Goods Research Paper Series","volume":"94 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131094933","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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