The Food Crisis,Industrialized Farming and the Imperial Regime

This paper argues that the food crisis cannot solely be equated with abrupt food price increases or seen as merely market induced. The unprecedented price increases of the first half of 2008, and the extremely low prices that followed, are expressions of a far wider and far more persistent underlying crisis, which has been germinating for more than a decade. It is the complex outcome of several combined processes, including the industrialization of agriculture, the liberalization of food and agricultural markets and the rise of food empires. The interaction of these processes has created a global agrarian crisis that has provoked the multifaceted food crisis. Both these crises are being accelerated through their interactions with the wider economic and financial crisis.     

Households' Decisions on Savings Accounts After Negative Experiences with Banks During the Financial Crisis

During the 2007–2008 financial crisis, consumers in many countries were suddenly confronted with the fact that their bank needed government support or had even failed. Using a detailed survey among households in the Netherlands, we show how these unexpected negative experiences have changed consumers' handling of their savings accounts. Our findings suggest that respondents who were customers of troubled banking institutions were subsequently more likely to spread their savings across accounts at several banks. They were also more likely to move funds across banks. Our results also suggest that the size of the shock is important as the strongest effects are found for respondents who experienced both a bank bailout and a bankruptcy.     

Does Auctioning of Entry Licences Induce Collusion? An Experimental Study

We use experiments to examine whether the auctioning of entry rights affects the behaviour of market entrants. Standard economic arguments suggest that the licence fee paid at the auction will not affect pricing since it constitutes a sunk cost. This argument is not uncontested though, and this paper puts it to an experimental test. Our results indicate that an auction of entry licences has a significant positive effect on average prices in oligopoly but not in monopoly. These results are consistent with the conjecture that entry fees induce players to take more risk in pursuit of higher expected profits. In oligopoly, entry fees increase the probability that the market entrants coordinate on a collusive price path. In monopoly, taking more risk does not make sense since average prices are already close to the profit-maximizing price.     

House‐Price Expectations,Alternative Mortgage Products,and Default

The goal of this paper is to better understand the forces that spurred use of alternative mortgages during the housing boom. A theoretical model shows that, when future house‐price expectations become more favorable, reducing default concerns, mortgage choices shift toward alternative products, which are characterized by backloading of payments. The empirical work confirms this prediction by showing that an increase in past house‐price appreciation, which captures more favorable expectations for the future, raises the market share of alternative mortgages. In addition, the paper tests the fundamental presumption that backloaded mortgages are more likely to default, finding support for this view.     

Cooperation in Experimental Games of Strategic Complements and Substitutes

We conduct a laboratory experiment aimed at examining whether strategic substitutability and strategic complementarity have an impact on the tendency to cooperate in finitely repeated two-player games with a Pareto-inefficient Nash equilibrium. We find that there is significantly more cooperation when actions exhibit strategic complementarities than in the case of strategic substitutes. The difference is to some extent driven by a difference in the speed with which some pairs reach stable full cooperation, but mainly by differences in choices of pairs that do not succeed in reaching full cooperation.     

How Changes in Financial Incentives Affect the Duration of Unemployment

This paper studies how changes in the two key parameters of unemployment insurance—the benefit replacement rate (RR) and the potential benefit duration (PBD)—affect the duration of unemployment. To identify such an effect we exploit a policy change introduced in 1989 by the Austrian government, which affected various unemployed workers differently: a first group experienced an increase in RR; a second group experienced an extension of PBD; a third group experienced both a higher RR and a longer PBD; and a fourth group experienced no change in the policy parameters. We find that unemployed workers react to the disincentives by an increase in unemployment duration, and our empirical results are consistent with the predictions of job search theory. We use our parameter estimates to split up the total costs to unemployment insurance funds into costs due to changes in the unemployment insurance system with unchanged behaviour and costs due to behavioural responses of unemployed workers. Our results indicate that costs due to behavioural responses are substantial.     

Sovereign to Corporate Risk Spillovers

The first Greek bailout on April 11, 2010 triggered a significant reevaluation of sovereign credit risk across Europe. We exploit this event to examine the transmission of sovereign to corporate credit risk. A 10% increase in sovereign credit risk raises corporate credit risk on average by 1.1% after the bailout. The evidence is suggestive of risk spillovers from sovereign to corporate credit risk through a financial and a fiscal channel, as the effects are more pronounced for firms that are bank or government dependent. We find no support for indirect risk transmission through a deterioration of macroeconomic fundamentals.