The effects of externalities and framing on bribery in a petty corruption experiment

Using a simple one-shot bribery game simulating petty corruption exchanges, we find evidence of a negative externality effect and a framing effect. When the losses suffered by third parties due to a bribe being offered and accepted are high and the game is presented as a petty corruption scenario instead of in abstract terms bribes are less likely to be offered. Higher negative externalities are also associated with less bribe acceptance. However, framing has no effect on bribe acceptance, indicating that the issue of artificiality may be of particular importance in bribery experiments.     

Measuring altruism in a public goods experiment: a comparison of U.S. and Czech subjects

This paper compares contributions to an experimental public good across the United States and Czech Republic, using a design that allows us to distinguish between altruism and decision error. Czech subjects contribute significantly more than American subjects, and further analysis reveals that this result cannot be attributed to the confounding effects of gender or decision error. Instead, preferences for altruism appear to differ across groups: Czechs are more altruistic than Americans and men are more altruistic than women.     

Teachers’ versus parental choice and the tracking distribution of students: a natural experiment

This article studies the secondary school track choice and considers to what extent parents’ and teachers’ assessment of students diverge. We take advantage of a reform in the German state of North Rhine-Westphalia (NRW) in 2006. The reform replaced parents’ choice about their children’s secondary school type by a binding teacher recommendation. Our data comprise class-level information on all public primary schools in the state. We find that teachers tend to recommend higher school types than parents. However, more precise analysis shows that this effect can be limited to districts with above average proportion of immigrants.     

Is corruption in China “out of control”? A comparison with the US in historical perspective

This paper compares corruption in China over the past 15 years with corruption in the US between 1870 and 1930, periods that are roughly comparable in terms of real income per capita. Corruption indicators for both countries and both periods are constructed by tracking corruption news in prominent US newspapers. Several robustness checks confirm the reliability of the constructed corruption indices for both countries. The comparison indicates that corruption in the US in the early 1870s, when its real income per capita was about $2800 (in 2005 dollars), was 7–9 times higher than China’s corruption level in 1996, the corresponding year in terms of income per capita. By the time the US reached $7500 in 1928, approximately equivalent to China’s real income per capita in 2009, corruption was similar in both countries. The findings imply that, while corruption in China is an issue that merits attention, it is not at alarmingly high levels, compared to the US historical experience. In addition, the paper articulates a theoretical framework within which the relationship between corruption and economic development can be understood. The model is used to explain the “life-cycle” of corruption in the development process–rising at the early stages of development, and declining after modernization has taken place. Hence, as China continues its development process, corruption will likely decline.     

‘Expressive’ obligations in public good games: Crowding-in and crowding-out effects

We study individual contributions in a repeated linear public good experiment in which, in each period, subjects are required to contribute a minimum amount and face a certain probability of being audited. Audited subjects who contribute less than the required amount are convicted to pay the difference between the obligation and the voluntary contribution. We investigate the ‘expressive’ force of the obligations. While at early stages subjects contribute the minimum level, with repetition contributions decline below the required amount. We observe that expressive obligations exert a rather robust crowding-out effect on voluntary contributions as compared to a linear public good game. Crowding-out is stronger when payments collected through the auditing procedure are distributed to subjects rather than when they are a deadweight loss.     

What leads to official corruption in China? A politico-economic analysis of economic opportunities and government corruption across China’s provinces

This paper investigates the relationship between economic opportunities and official corruption in China. We construct a cross-province sample of corrupted officials to analyse the effects on official corruption of mineral reserve, coal production, real estate and road construction, while including control variables such as population, GDP per capita, economic growth rate, private assets, provincial government capacity, fiscal transparency and distance of the province from Beijing. Spanning from December 2012 to November 2015, our sample contains 526 high-level government officials who worked in various provinces in China. We find through multivariate regression that economic opportunities represented by coal, minerals, real estate and road construction all have a positive and significant effect on official corruption in China at the levels of provincial department director or deputy director; meanwhile, capacity of political extraction, road construction and coal production are better indicators of official corruption at the level of governor or deputy governor.     

On the incentive effects of monitoring: evidence from the lab and the field

Several experimental studies have shown that the crowding-out effect of monitoring may outweigh its disciplining effect through intrinsic motivation destruction, thereby reducing effort. However, most of these experiments use numeric effort tasks that subjects may not be intrinsically motivated to complete. This paper aims to analyze the incentive effects of monitoring using a real-effort task for which intrinsic motivation is more likely to exist. We conducted two similar experiments, in the lab in Montreal and in the field in Ouagadougou. In contrast to the lab, subjects in the field are unaware they are taking part in an experiment.     

Θ The cultural transmission of trust norms: Evidence from a lab in the field on a natural experiment

We conduct trust games in three villages in a northeastern Romanian commune. From 1775–1919, these villages were arbitrarily assigned to opposite sides of the Austrian and Ottoman/Russian border despite being located seven kilometers apart. This plausibly exogenous border assignment affected local institutions and late-18th century migration in a manner that likely also affected trust. Conditional on trust norms being affected by these centuries-old historical circumstances, our experimental design tests the degree to which such norms are transmitted intergenerationally. Consistent with theoretical predictions, we find that participants on the Austrian side that also have family roots in the village are indeed more likely to trust outsiders.     

Catch-up strategy of latecomer firms in Asia: a case study of innovation ambidexterity in PC industry

ABSTRACT

Over the last decade, more and more East Asian firms have moved beyond imitation and are delivering innovative products and services to the market. This study examines (a) how a latecomer firm in East Asia transformed its business model in pursuit of manufacturing its own brand and (b) how it managed its exploration and exploitation of the market and technology in response to growth and competition. Given the lack of research on firms transitioning from contract manufacturing (CM) to own-brand manufacturing (OBM), this study offers fresh insights into how Acer, a leading Taiwanese original equipment manufacturer (OEM), has pursued new ways of creating value using an innovation ambidexterity strategy to maximise its customer value and boost performance.

Acer is chosen for this case study because of its significance and impact in the global PC industry. Data were collected through interviews and secondary data analysis. Our findings show that innovation ambidexterity is a deliberate transition process, taking firms years to reshape their business models. Our findings also present a viable solution to sustainable competitive advantage and keys to firms’ renewal in face of environmental change. This study contributes to the innovation management literature, and the use of the innovation ambidexterity framework examines how firms explore new ways of creating and capturing value and face challenges.     

Markups in the Euro area and the US over the period 1981–2004: a comparison of 50 sectors

This article provides estimates of price–marginal cost ratios or mark-ups for 50 sectors in eight Euro area countries and the US over the period 1981–2004. The estimates are obtained applying the methodology developed by Roger (J Polit Econ 103:316–330, 1995) on the EU KLEMS March 2007 database. Five stylized facts are derived. First, perfect competition can be rejected for almost all sectors in all countries; markup ratios are generally larger than 1. Second, average markups are heterogeneous across countries. Third, markups are heterogeneous across sectors, with services having higher markups on average than manufacturing. Fourth, services sectors generally have higher markups in the euro area than the US, whereas the pattern for manufacturing is the reverse. Fifth, there is no evidence that there is a broad range change in markups from the 1980s to the 1990s.     

Black–white wage differentials: duration and probability unemployment effects in a multiple of sample selection bias model

The extent to which probability and duration of unemployment affect the black–white wage differentials is examined in this paper. The paper simultaneously incorporates in the wage equation the multiple sample selection bias that occurs as a result of individuals’ propensity to be in the labor force, and the firm’s hiring decisions. The results reveal a substantial contribution of the duration of unemployment variable to the black–white wage differential, but a small portion of the differential is explained by the probability of unemployment. The results also indicate a sizeable difference between the contribution of the duration of unemployment variable to the male’s wage differentials (26%) and to the female’s (35%). The study finds that an individual’s labor force decision as well as a firm’s hiring decision are important in the wage determination process and that failure to account for the sample selectivity bias due to these two decisions will result in either underestimating or overestimating the wage differentials between black and white workers. At the macro level, the results seem to suggest that promotion of racial wage equality should be associated with policies that will minimize blacks’ incidence of unemployment and duration of unemployment spells.     

Tax cuts and enterprises’ R&D intensity: Evidence from a natural experiment in China

This paper studies the impact of tax cuts on enterprises’ R&D intensity. We use a natural experiment involving China’s business tax changing to value-added tax (“BT to VAT”) to identify any causality. The results reveal that this tax reform has prompted enterprises to increase their research and development (R&D) investment. Specifically, a stronger ability to transfer tax, results in this change having a more significant promotional effect on enterprises’ R&D intensity. Further analysis demonstrates that firms with different ownership types and in different industries respond differently to the “BT to VAT” policy. Our findings are only significant for non-state-owned and other modern service enterprises. This paper provides a theoretical and empirical basis for detailed analyses of the effects of “BT to VAT” policy, particularly the government’s subsequent improvement to the tax reform policy, to further stimulate enterprise investments in R&D as well as industrial upgrading.     

A field experiment to estimate the effects of anchoring and framing on residents’ willingness to purchase water runoff management technologies

Watersheds throughout the world have been severely polluted by nutrient-laden runoff that comes from industrial, agricultural, and residential sources. Efforts to reduce this runoff have focused on industrial and agricultural sources, while little attention has been paid to encouraging residents to reduce runoff from their properties. To study residents’ willingness to adopt landscaping practices that reduce runoff, we conducted a field experiment in the Delaware River watershed. In the experiment, over three hundred adults participated in a series of random-price auctions that revealed their willingness to pay (WTP) for five products that reduce nutrient runoff. To study how WTP can be influenced by attributes of the choice architecture, we randomized the starting bid values (anchors) and the way in which the external benefits of the five practices were framed. Compared to a neutral framing, a positive framing (using the product can improve water quality) increased average WTP by about one-third, while the estimated effect of a negative framing (failing to use the product can worsen water quality) was also positive, but smaller and not statistically different from zero. The estimated effect on average WTP from the anchor depends on how bids of $0 are modeled, but the results imply that higher anchors lead to higher WTP. Although we believe the magnitudes of our results should be considered suggestive and we recommend replications with higher statistical power, the results add to the evidence base that environmental programs can achieve policy-relevant gains in program performance through a series of small changes to the decision environment.     

Assessing students’ equality of opportunity in OECD countries: the role of national- and school-level policies

This article analyses the relationship between equality of opportunity and the characteristics of the educational system, jointly considering country- and school-level policies. Because school social environment represents a fundamental channel in shaping educational opportunities, we consider all policies, recorded in PISA 2012 dataset, that affect the sorting of students to schools. We show that including sorting policies enriches the explanation of the socio-economic gradient, that is, the association between students’ performances and parental background, with respect to previous studies including only country-level features. The negative impact of early tracking on equality of opportunity is overvalued without including other sorting policies, while grouping students’ within-school by ability increases the socio-economic gradient and a greater students’ heterogeneity in the school reduces the gradient.     

Healthcare costs for Crohn’s disease patients treated with infliximab: a propensity weighted comparison of the effects of treatment adherence

Objective:

The objective for the research was to evaluate the direct healthcare costs for Crohn’s disease (CD) patients categorized by adherence status.

Methods:

Adult patients with ≥1 claim for infliximab and ≥2 claims for CD who were continuously insured for 12 months before and after their first infliximab infusion (index date) were identified in a 2006–2009 US managed care database. Patients were excluded if they had rheumatoid arthritis claims, received infliximab billed as a pharmacy benefit, or received another biologic drug. Patients were categorized as being either adherent or intermittently adherent to infliximab using a pre-defined algorithm. Total and component direct costs, CD-related costs, rates of surgery, and days of hospitalization were estimated for the 360-day post-index period. Propensity weighted generalized linear models were used to adjust the cost estimates for potential confounding variables.

Results:

The total propensity weighted cost for infliximab adherent patients was $40,425 (95% CI?=?[$38,686, $42,242]), compared to $41,082 (95% CI?=?[$38,163, $44,223]) for the intermittently adherent (p?=?0.71). However, adherent patients had lower total direct medical costs, exclusive of infliximab, that were $13,097 (95% CI?=?[$12,141, $14,127]) compared with $20,068 (95% CI?=?[$17,676, $22,784]) for intermittently adherent patients as a result of substantially lower hospital and outpatient costs (p?Conclusions:

Greater drug-related costs for infliximab adherent patients were offset by lower costs from hospitalization and outpatient visits. These findings indicate that adherent patients have improved clinical outcomes, at a similar aggregate cost, than patients who are only intermittently adherent to therapy.     

Income–happiness paradox in Australia: Testing the theories of adaptation and social comparison

This paper investigates whether the theories of adaptation and social comparison can explain the income–happiness puzzle (Easterlin Paradox) in Australia. Alternative specifications of happiness model that incorporate adaption, comparison incomes and other relevant variables are estimated using the panel data from the five waves (2001–2005) of the Household Income and Labour Dynamics in Australia (HILDA) surveys. The statistical tests provide no support for the adaptation effect on happiness. However, we find strong support for the theory of social comparison as an explanation for the happiness paradox. An increase in peer group income hurts the poor more than the rich, suggesting that a redistribution of income is likely to enhance the overall wellbeing of society. A sensitivity analysis is conducted to check the robustness of results.     

More than words: the effects of cheap talk in a volunteer’s dilemma

We theoretically and experimentally investigate a game in which exactly one person should make a costly effort to achieve a socially efficient outcome. This setting is commonly known as the volunteer’s dilemma. We implement one-way communication by allowing one player to send a message indicating whether she intends to volunteer and investigate the message’s effects on behavior and efficiency in the subsequent game. We theoretically demonstrate that there are asymmetric mixed-strategy equilibria in the volunteer’s dilemma and argue that one of these is likely to emerge through one-way communication. The experimental data support this notion. We find that the actions of both the sender and receiver of the message are crucially affected by the cheap talk stage and that efficiency in the volunteer’s dilemma increases with one-way communication.     

Economic liberalization and sources of productivity growth in Indonesian Banks: is it efficiency improvement or technological progress?

This article investigates the sources of productivity growth in the Indonesian banking sector during 23 years period from 1993 to 2015. The industry has gone through several episodes of policy reforms, starting from the radical deregulation in the late 1980s, the restructuring period following the 1997 Asian financial crisis, the consolidation period in the mid-2000s to the economic expansion in the 2010s. Using panel data of 98 commercial banks, we explore productivity growth using Malmquist indices complemented with bootstrapping technique to provide measures of the statistical precision of the results. The Malmquist index measures total factor productivity, efficiency change and technological change. Results show that productivity improves moderately and appears to be less volatile towards the end of the period. Furthermore, efficiency change tends to be the main source of productivity improvement rather than technological change.     

Choice of angiotensin receptor blocker in moderate hypertension. A UK-based cost–benefit comparison of olmesartan- and candesartan-based regimens

Abstract

Introduction:

Selection of antihypertensive therapy hinges on an appropriate combination of efficacy, tolerability and compatibility with co-morbidities. Within a given class of antihypertensives, the choice of agent is often driven by cost, with the cheapest appropriate agent being chosen. Amongst the angiotensin receptor blockers (ARBs), this choice will often be losartan, as it is available in generic form. However, as the blood pressure lowering efficacy of losartan is modest, some patients will require an alternative ARB. In the UK this choice is often candesartan, although the agent with greatest BP lowering efficacy is olmesartan. The objective of this study was to use a cost-benefit model to compare the costs associated with target achievement using each of these two agents, in order to guide optimum use of prescribing budgets.

Method:

A probabilistic cost-benefit model was constructed for a cohort of patients with moderate hypertension, based on a standardised titration and maintenance algorithm using either olmesartan or candesartan, combined with thiazide and calcium channel blocker where required. Direct treatment costs were recorded, along with the proportion of patients achieving pre-defined treatment targets at each treatment level. Results were expressed as mean treatment cost per patient reaching target.

Results:

Based on the current QoF target of 150?mmHg systolic, 94.3% of patients on the olmesartan-based regimen reached target of 150?mmHg, compared with 89.0% of those on the candesartan-based regimen. 86% of olmesartan patients reached target on <3 drugs, compared with 74% of candesartan patients. The mean 12-month cost per patient reaching target was £171.36 for olmesartan versus £189.91 for candesartan. Ongoing annual maintenance costs for patients at target were £169.97 and £182.64, respectively. Similar results were obtained when considering alternative treatment targets

Limitations:

The study only compared two ARBs – candesartan and olmesartan and the results relate to prescribing costs only and do not include other healthcare costs. Additionally, the chosen outcome was blood pressure target achievement, rather than clinical endpoints. Given the stated objectives of the model, we do not believe these issues will have introduced bias in the direction of either comparator

Conclusion:

Although olmesartan has an apparently higher acquisition cost than candesartan, its superior BP lowering efficacy means that the overall cost per patient treated to target is actually lower. This result could have significant implications for making savings within primary care prescribing budgets in the UK.