A different look at Lenin’s legacy: Social capital and risk taking in the Two Germanies

What are the long-term effects of Communism on economically relevant notions such as social trust, fairness, and scope of cooperation? To answer this question, we study the post-unification trajectory of convergence between East and West German individuals with regard to trust, cooperation, and risk. Our hypotheses are derived from a model of German unification that incorporates individual responses both to incentives and to values inherited from earlier generations as recently suggested in the literature. Using two waves of balanced panel data, we find that despite twenty years of unification East Germans are still characterized by a persistent level of social distrust. In comparison to West Germans, they are less inclined to see others as cooperative. East Germans are also found to have been more risk loving than West Germans. However, risk attitudes fully converged recently.     

Who trusts others more? A cross-European study

Using the European Social Survey, the paper documents the endowments and the individual determinants of trust across Europe. Self-declared trust is higher in northern countries, in particular Scandinavia; it is lower in southern countries, in particular Italy, Portugal and Greece. At the EU-15 level, we find that a number of factors, such as schooling, family background, labor market status, and a recent history of traumatic experiences, are associated with trust. We also find evidence of heterogeneity for some of the determinants across European countries.     

Too tall to be smart? The relationship between height and cognitive abilities

Recent research suggests for height–wage premiums because of differentials in cognitive abilities. This note adds to the discussion and examines whether verbal and non-verbal competencies are related to height. The results indicate that height is non-linearly associated to males' abilities.     

Networking beyond the software code? an explorative examination of the development of an open source car project

At present, several initiatives have emerged that claim to be innovative while acting according to the mechanisms of open source software (OSS), a field frequently deemed to be a role model for open innovation. Against this background, this study focuses on a case study of the development of an automobile. Based on a commons-based peer production-informed perspective, we show that this project displays a variety of characteristics that are usually associated with OSS projects. In particular, parallels can be drawn between the intrinsic and extrinsic motivations, the ability to ‘broadcast’ ideas due to the virtual nature of the tasks, and the self-selection of tasks due to their modular nature. The drawing of such parallels, however, must be done cautiously because diverse factors, such as opportunity costs, regulations, and feasibility studies, limit the applicability of OSS principles to this non-software related network of dispersed voluntary contributors within a commons-based peer production framework. Herein, we attempt to clarify how OSS projects can and cannot work as role models for open innovation in the automotive as well as other product-oriented industries.     

Financial instruments with sports betting components: Marketing gimmick or a domain for behavioral finance?

We examine theoretically and experimentally a certain class of new financial instruments which are designed as lotteries on the outcome of prominent sports events like the Soccer World Cup 2006. From a theoretical point of view, sports betting products may be superior to a fixed rate investment because of heterogeneous expectations, risk-loving behavior of investors or additional non-monetary utility components. In comparison to the direct placement of bets at bookmakers’, sports betting products may be preferable in cases of hedonic framing. Our experimental section, however, reveals the limited practical relevance of these theoretical arguments for “average” decision makers. Despite this, financial instruments with sports betting components offer a certain profit potential due to the diversity of preferences across individuals. Summarizing, the issuance of sports betting products may actually be mainly driven by marketing aspects, nevertheless sports betting products may be considered to be “viable” niche products with low cost of capital for banks.     

Automated Integration of Enterprise Accounting Models Throughout the Systems Development Life Cycle

This paper summarizes and projects research in the field of automated software engineering as that work has been applied to the domain of accounting-centered enterprise models. In particular, we review the basic concepts and goals of the REA (Resource–Event–Agent) accounting model and speculate on its past, present, and future use as an embedded domain theory of enterprise economic activity within computer-aided systems engineering (CASE) tools. The REA CASE tools reviewed here include ones like REAVIEWS, CREASY, and REAtool that have already been built plus others like REACH, FREACC, and REAVERSE that have been specified only in theory. The entire systems development life cycle is used as a discussion vehicle to treat these tools and projected future work in an integrated way.     

On the bad reputation of reputational concerns

Can reputational concerns do any good? Economists have shown how they lead agents to ignore valuable information, to herd, and to become overly risk averse. We explore how they may be a social blessing. An agent may exert effort to become informed about the uncertain benefits of a project. A smart agent's efforts make him better informed; a dumb agent's efforts are to no avail. If an agent does not know his type, reputational concerns are socially beneficial. If an agent knows his type, reputational concerns may be socially beneficial. A dumb agent takes inefficient, unconventional decisions to mimic a smart agent. The latter exerts more effort in order not to be mistaken for a dumb. This holds whether or not project rejection is a safe haven for the dumb.     

Price/Wage Staggering and Persistence: A Unifying Framework

Abstract.  In this paper, we provide a general unified framework to clarify the issue of persistence of real effects of money shocks in staggered wage/price models. We mainly aim to: (i) highlight which features of the underlying economy, and particularly of the labour market, are crucial for generating output persistence; (ii) analyse the differences between price and wage staggering.