Team reasoning theory: an experimental analysis of common reason to believe and social distance

The aim of this paper is to study the role of the “common reason to believe” (Sugden in Philos Explor 16:165–181, 2003) and the reduction of social distance within the theory of team reasoning. The analysis draws on data collected through a Traveler’s Dilemma experiment. To study the role of the common reason to believe, players’ beliefs in their counterparts’ choices are elicited, and the correlation between the endorsement of team reasoning and beliefs is considered. The relation between social distance and team reasoning is analyzed by introducing a meeting between the two players after the game. We show that the common reason to believe appropriately explains the internal logic of team reasoning and that a reduction of social distance does not produce any statistically significant effect on the probability that team reasoning will be used.     

Feasible taxation in advanced democracies

One usually considers tax pressure as the result of the policymakers’ efforts to increase public expenditure, while populism is resorted to in order to alleviate tensions among the taxpayers. This paper takes a different view. It assumes that populism is exogenous in the short run and defines the tolerable degree of tax pressure required to bring about redistribution; however, taxpayers also resent disappointing economic performances and low-quality public expenditure. Within this context, therefore, policymakers try to find a compromise between their desire to engage in rent-seeking and their electoral ambitions. This paper shows under which circumstances compromise is obtained, how tensions arise, and what outcomes the taxpayers’ reactions may generate.     

In search of stabilization and recovery: macro policy and reforms in Venezuela

Venezuela is currently immersed in a severe economic crisis as a result of years of domestic mismanagement and the recent reversal in oil prices. This article attempts to formulate a proposal for stabilization and recovery that includes upfront key policy actions to deal with the drastic foreign exchange constraint. We consider the recovery of foreign currency liquidity to be of paramount importance. This will allow not only the lifting of exchange control and the implementation of a stable and competitive real exchange rate, but also the removal of shortages across the board and output recovery. The recovery of domestic activity will also require supply-side relief in the form of broad deregulation, institutional changes, and a sensible policy to lift price controls. To maintain a stable and competitive exchange rate, we propose a whole set of policy measures for rapid suppression of inflation and the causal mechanisms that have formed over the years. A monetary reform and the support of monetary and fiscal policy for successful stabilization and recovery efforts are also discussed.     

Does a clustered location matter for high-technology companies' performance? The case of biotechnology in the Netherlands

Young entrepreneurial companies in biotechnology tend to cluster in space, nearby research universities and research centers. This pattern is often ascribed to the availability of external economies, mainly local knowledge spillovers that help to reduce the uncertainty from a disruptive technology faced by these companies. Given a shortage of empirical research on cluster advantages and performance of clustered companies, we present results of a comparative analysis of clustered and non-clustered companies in biotechnology and Bionanotechnology in the Netherlands. It appears that, among other influences, a clustered location has no significant influence on innovation and speed of growth. However, a location in the largest cluster (Leiden) does contribute to a better performance in terms of innovativeness compared with all other locations. The kind of external economies involved seems to vary according to the stage in the knowledge value chain and the segment in biotechnology industry. Knowledge spillovers tend to be local for companies involved in new drugs and diagnostics research only in the first stage of the knowledge chain and for service companies regardless of the stage in the knowledge chain.     

The effect of fair trade affiliation on child schooling: evidence from a sample of Chilean honey producers

We evaluate the impact of Fair Trade (FT) affiliation on child schooling within a sample of Chilean honey producers with a retrospective panel data approach. From a theoretical point of view, we argue that FT should have a positive effect on child schooling since it generates a short-run pure income effect together with a medium-run productivity effect on both adult and child wages. On the other hand, because of the higher productivity generated by the medium-run effect, the opportunity cost of child education increases if they work with their parents. The direction of the impact of FT affiliation on child schooling is therefore uncertain and requires empirical testing. Our econometric findings document a positive and significant impact of affiliation years on child schooling after controlling for endogeneity and heterogeneity between the treatment and control sample.     

Estimating food demand in Paraguay from household survey data

We estimate a food demand system in Paraguay based on the 1997 national household survey, considering 12 food categories. To obtain demand elasticity estimates from household survey data accounting for quality effects, measurement errors, and censored observations, price indexes are obtained from ordinary least squares predictions of changes in unitary values caused by spatial and temporal variations, and the two‐step estimation procedure ( Shonkwiler and Yen, 1999 ) is applied. Our approach yields reasonable estimates of combined quantity and quality responses with respect to price. Results suggest distinct consumption behavior in urban and rural areas, particularly for chicken, eggs, dairy, and fats and oils, which are likely because of differences in the food distribution system and availability of nonmarket food sources.     

How do banks set interest rates?

This paper studies cross-sectional differences in banks interest rates. It adds to the literature in two ways. First, it analyzes systematically the micro and macroeconomic factors that influence the price-setting behaviour of banks. Second, by using banks’ prices (rather than quantities) it provides an alternative way of disentangling loan supply from loan demand shift in the “bank lending channel” literature. The results suggest that heterogeneity in the banking rates pass-through - depending on liquidity, capitalization and relationship lending - exists only in the short run.     

Productivity, wages and intrinsic motivations

There is a long-standing debate in labour economics on the impact of workers’ intrinsic motivations on equilibrium wages. One direction in economic theory suggests that intrinsically motivated workers are willing to accept lower wages and “donate” work, for example, in terms of unpaid overtime (the donative-labour hypothesis). In the other direction, intrinsic motivations are expected to increase worker productivity and, in turn, wages (the intrinsic motivation-productivity hypothesis). Using a new database of a sample of workers in the cooperative non-profit sector, we find that, consistently with the motivation-productivity hypothesis, more motivated workers earn significantly higher wages, which signals higher productivity. Evidence supporting the donative-labour hypothesis is weaker, even though a generally positive connection between motivations and work-donation is confirmed. We interpret these findings by arguing that the impact of the donative-labour effect is dominated by the intrinsic motivation-productivity effect.