An anticipated benefit of the prospective European Banking Union is stronger supervision of European banks. Another benefit would be enhanced resolution of banks in distress. While national governments confine themselves to the domestic effects of a banking failure, a European Resolution...

Cross‐border banking needs cross‐border recapitalisation mechanisms. Each mechanism, however, suffers from the financial trilemma, which is that cross‐border banking, national financial autonomy and financial stability are incompatible. In this paper, we study the efficiency of different...

The financial trilemma states that financial stability, financial integration and national financial policies are incompatible. Any two of the three objectives can be combined but not all three; one has to give. This paper develops a model to underpin the financial trilemma. Our findings for...

Customary law has been criticized from very different angles. Rational choice theorists claim that what looks like custom is nothing but self-interest. Positivists doubt that anything beyond consent assumes the force of law. In this paper, we adopt an experimental approach to test these claims....

This paper demonstrates the effects of ethnic and religious diversity on the quality of public spaces. Its identification strategy relies on the exogeneity of public housing allocations in France, and thereby eliminates the bias from endogenous sorting. The paper uses micro evidence of social...

Punishees regularly ask for justification. But is justification also effective? To answer this question under controlled conditions, we have conducted a public goods experiment with central punishment. The authority is neutral – she does not benefit from contributions to the public good....

Cartels are inherently instable. Each cartelist is best off if it breaks the cartel, while the remain-ing firms remain loyal. If firms interact only once, if products are homogenous, if firms compete in price, and if marginal cost is constant, theory even predicts that strategic interaction...

The most famous element in Bentham’s theory of punishment, the Panopticon Prison, expresses his view of the two purposes of punishment, deterrence and special prevention. We investigate Bentham’s intuition in a public goods lab experiment by manipulating how much information on punishment...

The standard tool for analysing social dilemmas is game theory. They are reconstructed as prisoner dilemma games. This is helpful for understanding the incentive structure. Yet this analysis is based on the classic homo oeconomicus assumptions. In many real world dilemma situations, these...

We analyze the effects of ostracism on cooperation in a linear public good experiment. Our results show that introducing ostracism increases contributions. Despite reductions in group size due to ostracism, the net effect on earnings is positive and significant.