Why it pays for aid recipients to take note of the Millennium Challenge Corporation: Other donors do!

We empirically analyze how other aid agencies, within and outside the United States, reacted to the Millennium Challenge Corporation (MCC). We find that positive signaling effects dominate possible substitution effects. Striving for MCC eligibility thus pays.     

It pays to be ignorant: A simple political economy of rigorous program evaluation

This paper attempts to explain the scarcity of rigorous evaluations of public policy. I build a positive model to explain the "stylized fact" that there is under investment in the creation of reliable empirical knowledge about the impacts of public sector actions. The model shows how "advocates" of particular issues or solutions - the public action equivalent of entrepreneurs - have incentives to under invest in knowledge creation because having credible estimates of the impact of their preferred program may undermine their ability to mobilize political (budgetary) support.     

It is Hobbes, not Rousseau: an experiment on voting and redistribution

We perform an experiment which provides a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothing to redistribute. A solution to the repeated game allows for redistribution and high effort, sustained by the threat to revert to the worst of these equilibria. Our results show that redistribution with high effort is not sustainable. The main reason for the absence of redistribution is that rich agents do not act differently depending on whether the poor have worked hard or not. The equilibrium in which redistribution may be sustained by the threat of punishing the poor if they do not exert effort is not observed in the experiment. Thus, the explanation of the behavior of the subjects lies in Hobbes, not in Rousseau.     

Giving gifts to groups: How altruism depends on the number of recipients

When a single gift goes to a group of recipients, how does giving depend on the size of the group? This question is important for understanding charitable giving and fund-raising, public goods provision, family altruism, and more. If we think of the gift as giving up a dollar to create a social surplus, then we want to know how the number of recipients of that surplus affects its value to the giver. In other words, how congestible is altruism? This paper builds a theoretical framework for this question and begins to answer it with a controlled experiment. The finding is that for most subjects altruism is congestible. For the average subject, a gift that results in one person receiving x is equivalent to one in which n people receive x / n^0.68 each.     

A class of monotone economies in which rational expectations equilibria exist but prices do not reveal all information

Some economies having excess demands which depend monotonically on agents' information signals are examined. If there are no multiple market clearing prices, then these economies have strict rational expectations equilibria in which equilibrium prices alone do not transmit all information.     

Return of the lost letter: Experimental framing does not enhance altruism in an everyday context

Debate surrounds interpretation of prosocial behavior in experimental games. Skeptics of the thesis that evolution produced a propensity for noncontingent altruism speculate that such results reflect the presence of information suggesting reputational consequences, including awareness that one is participating in an experiment. To examine the effects on prosocial behavior of awareness that research is being conducted, return rates were measured on ‘lost’ envelopes, some of which carried the message that they were dropped as part of an investigation. Return rates were not enhanced by such messages, indicating that awareness that one is in an experiment does not increase prosocial behavior.     

Reciprocity, loyalty, and the growth of the underground-economy: A theoretical note

Taken the growth of the underground-economy for granted, this paper develops an explanation for its existence that is different from those usually provided. Presupposing a ‘generalized norm of reciprocity’ that guides the relationship between individuals and the state, it is argued that a reduction of certain payments from the government to individuals, e.g. in order lower budget deficits, may lead to an erosion of loyalty with possibly “catastrophical consequences” on overall economic activity: a situation that may ask for different policy measures than usually thought of as being appropriate.     

Efficiency wages, employment, and the marginal income-tax rate: A note

In the framework of an efficiency-wage model, Hoel [Journal of Economics (1990) 51: 89–99] argues that a reduction in the marginal income-tax rate reduces employment. The present note shows that this result depends on how the tax reform is assumed to change the burden per worker. If the tax payment per worker is held constant, it cannot be ruled out that a lower marginal tax rate leads to an increase in employment.     

Using experimental economics to measure the effects of a natural educational experiment on altruism

Economic research examining how educational intervention programs affect primary and secondary schooling focuses largely on test scores although the interventions can affect many other outcomes. This paper examines how an educational intervention, a voucher program, affected students' altruism. The voucher program used a lottery to allocate scholarships among low-income applicant families with children in K-8th grade. By exploiting the lottery to identify the voucher effects, and using experimental economic methods, we measure the effects of the intervention on children's altruism. We also measure the voucher program's effects on parents' altruism and several academic outcomes including test scores. We find that the educational intervention positively affects students' altruism towards charitable organizations but not towards their peers. We fail to find statistically significant effects of the vouchers on parents' altruism or test scores.     

A note on the duty of disclosure

This letter studies the possibility of voluntary breach of contract in the presence of new information. If the information had to be disclosed prior to the agreement, it is shown by example that all individuals may be worse off than if the act of disclosure is itself voluntary.     

论我国资源替代技术工业化路线的政策选择

我国正处在资源替代技术工业化路线的关键时期,正确的国内外资源方针政策是确保获得充分的资源投入,促进我国工业持续发展的日益重要因素。全球资源竞争加速了资源所有者的重组及国家垄断步伐,并凸显了资源及其相关政策、制度的重要意义。因此,如何以正确的资源替代技术工业化产业政策,引导我国工业顺利过渡到低资源消耗意义重大。     

A note on the diffusion of innovation

The paper deals with the process of substitution between technologies in a framework of increasing returns to scale. The approach stresses the interaction between capacity expansion and market demand as explanations of the diffusion of technologies into their niches. The demand and supply sides of the diffusion process are therefore brought together to determine simultaneously patterns of output and prices.It analyzes the dynamics of the substitution path, where a logistic diffusion process for the new technology is assumed, and determines the substitution curve between the old technology and the new one.     

A note on the pricing of IPOs

This paper studies the pricing of IPOs in a tractable model in which an investment bank faces some investors with superior information. We show how this can lead to underpricing and we make a number of empirical predictions.