Regulation in the market for education and optimal choice of curriculum

We analyze educational institutions’ incentives to set up demanding or lax curricula in duopolistic markets for education with endogenous enrolment of students. We assume that there is a positive externality from student achievement to the local economy. Comparing the case of regulated tuition fees with an unregulated market, we identify the following inefficiencies: Under regulated tuition fees schools will set up inefficiently lax curricula in an attempt to please low-quality students even if schools internalize some of the externality. On the other hand, unregulated schools set up excessively differentiated curricula in order to relax competition in tuition fees. Deregulation gets more attractive if a larger fraction of the externality is internalized.     

The Liberalisation of Rail Transport in the EU

On 1 January 2007 the European rail freight market, which has long suffered from fragmentation and a declining share of total transport services, will be fully opened to competition. What will be the consequences for the transport sector and the economy as whole? What further measures are needed to stabilise or increase the railways' share in the freight market? * Member and speaker of the EPP-ED Group (Christian Democrats) in the Committee on Transport and Tourism; rapporteur of the European Parliament responsible for railway issues. ** Views expressed here are not those of NDU or Minnesota.     

Punishment Motives for Small and Big Lies

Corporate fraud typically involves deceptive financial statements that are harmful for some stakeholders. We analyze how preferences for honesty and economic fairness shape the punishment of such untruthful statements. Our laboratory experiment disentangles the crucial confound that, for deceptive financial statements, larger deviations from the truth imply both a stronger violation of the honesty norm and an increase in economic harm. Our study measures how people punish increased dishonesty controlling for the corresponding economic harm. We find that punishment increases with the size of the lie. This behavioral pattern is driven by people who are honest themselves. Our results suggest that popular demand for punitive measures in case of financial scandals reflects a genuine interest in the enforcement of social norms.     

Die Verkehrsinfrastruktur in Deutschland: marode und unterfinanziert

In German transport infrastructure provision, political decision-making and a lack of user charges are the main reasons for inefficiencies, such as underinvestment, misallocation of funds and congestions. In the last decades, transport policy in Germany has focused on network extensions, while maintaining and renewing the infrastructure have been neglected. Additional financial resources will be needed to restore the quality of the federal, state and local transportation networks, in order of magnitude of yy7.2 billion p.a. in the next 15 years. Although the government collects about yy45 billion in taxes and infrastructure charges from road transport, it is unable to fund the transport infrastructure adequately. Several committees have suggested new concepts to provide sufficient funding, continuity and efficiency for renewing the transport infrastructure, and different options of raising more funds are under discussion (launching a fund, increasing general or energy taxes, extending road charges). Special attention is paid to the political economy of public funding and both tax and charge resistance which are considered to be the main obstacle rather than a lack of ideas or scientific knowledge. In the end, German transport infrastructure does not only need additional money but also structural reforms to increase efficiency in the infrastructure sector.     

Mobilität auf dem Klimaprüfstand: Bahnverkehr

Wirtschaftsdienst - Im Zuge der politisch und gesellschaftlich propagierten „Verkehrs- und Klimawende“ wird der Stärkung des Schienenverkehrs in Deutschland eine zunehmend...     

Naïve Responses to Kind Delegation

People do not like to delegate the distribution of favors. To explain this reluctance, we disentangle reward motives in an experiment in which an investor can directly transfer money to a trustee or delegate this decision to another investor. Varying the transfer values of the investor and delegate, we find that the trustee's rewards follow a rather simple pattern. In all situations, both investors are rewarded, but the person who ultimately decides gets a higher reward. Unlike studies on the punishment of delegated unkind decisions, our results do not reveal a more sophisticated reward behavior that takes people's responsibility into account. Copyright © 2014 John Wiley & Sons, Ltd.