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Eqilibrium contracts for the central bank of a monetary union
Dixit, Avinash K.; Jensen, Henrik - 2000
We consider the political economy of a monetary union where member governments attempt to influence the policy of the common central bank. Modeling this as a common agency with incentive contracts, we show that if incentives are all that matters for the bank, the equilibrium implements a...
Persistent link: https://www.econbiz.de/10001554692
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Living in two neighborhoods : social interactions in the LAB
Falk, Armin; Fischbacher, Urs; Gächter, Simon - 2003
Field evidence suggests that agents belonging to the same group tend to behave similarly, i.e., behavior exhibits social interaction effects. Testing for such effects raises severe identification problems. We conduct an experiment that avoids these problems. The main design feature is that each...
Persistent link: https://www.econbiz.de/10001771994
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A theory of reciprocity
Falk, Armin; Fischbacher, Urs - 2001
This paper presents a formal theory of reciprocity. Reciprocity means that people reward kind actions and punish unkind … ones. The theory takes into account that people evaluate the kindness of an action not only by its consequences but also … the intention underlying this action. The theory explains the relevant stylized facts of a wide range of experimental …
Persistent link: https://www.econbiz.de/10001590591
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Monetary and fiscal policy design under EMU: a dynamic game approach
Aarle, Bas van (contributor) - 2000
This paper analyses the problem of designing macroeconomic stabilization policies within the European Monetary Union (EMU) as a dynamic game between a centralized monetary authority, the European Central Bank (ECB), and national fiscal policy makers. Non-cooperative feedback Nash equilibrium and...
Persistent link: https://www.econbiz.de/10001473958
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Social ties in a public good experiment
Dijk, Frans van; Sonnemans, Joep; Winden, Frans A. A. M. van - 2000
The formation of social ties is examined in an experimental study of voluntary public good provision. The experimental design consists of three parts. In the first part the value orientation (attitude to a generalized other) is measured. In the second part couples play a multi-period public good...
Persistent link: https://www.econbiz.de/10001474389
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Optimal education with mobile capital : an OLG approach
Viaene, Jean-Marie; Zilcha, Itzhak - 2000
The paper considers a two-country model of overlapping generations economies with intergenerational transfers carried out in the form of bequest and investment in human capital. The authors examine in competitive equlibrium the optimal provision of education with and without capital markets...
Persistent link: https://www.econbiz.de/10001489391
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Tax competition and international public goods
Bjorvatn, Kjetil; Schjelderup, Guttorm - 2000
A well known result in the tax competition literature is that tax rates are set too low in the Nash equilibrium to finance an efficient level of public consumption goods. In this model we introduce international spillovers in public goods provision and show that such spillovers reduce, and in...
Persistent link: https://www.econbiz.de/10001554661
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Nominal wage flexibility, wage indexation and monetary union
Calmfors, Lars; Johansson, Åsa - 2002
Persistent link: https://www.econbiz.de/10001689350
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Democratic mechanisms : double majority rules and flexible agenda costs
Gersbach, Hans - 2002
We introduce democratic mechanisms where individual utilities are not observable by other people at the legislative stage. We show that the combination of three rules can yield e±cient provision of public projects: first, flexible and double majority rules where the size of the majority depends...
Persistent link: https://www.econbiz.de/10001689878
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Optimal design of intergovernmental grants under asymmetric information
Huber, Bernd; Runkel, Marco - 2003
This paper develops a theoretical explanation why it may be optimal for higher-level governments to pay categorical block grants or closed-ended matching grants to local governments. We consider a federation with two types of local governments which differ in the cost of providing public goods....
Persistent link: https://www.econbiz.de/10001750832