Traditional analyses of standards in international trade identify standards as government regulations and investigate the potential for distortion of trade flows. In reality, however, private industry groups exercise critical influence on the determination of technical standards. The composition...

The US Corporate Average Fuel Economy (CAFE) regulation mandates, subject to a civil penalty, producers to achieve a certain fleet average fuel economy on sales of new passenger cars. Analysing the incentive effects of CAFE, we find that it affords differential tax treatment to car models with...

This paper examines the role of liability for past environmental contamination in the privatization processes of Central and Eastern Europe. The theoretical section establishes a link between a risk-averse investor’s amount of information regarding the extent of past environmental...

Because standards and regulations respond to a society's demand for specific public goods, we expect them to be shaped by preferences, endowments, technologies - the fundamental determinants of this demand. There is no a priori reason why standards should be equal in different societies. This...

The objective of this paper is to develop an analytical framework for estimation of the parameters of a structural model of an incentive contract under moral hazard, taking into account agents heterogeneity in preferences. We show that allowing the principal to strategically distribute the...

Plurilateral agreements in the WTO context allow sub-sets of countries to agree to commitments in specific policy areas that only apply to signatories, and thus allow for ‘variable geometry’ in the WTO. Current WTO rules make it much more difficult to pursue the plurilateral route than to...

This Paper analyses the welfare effects of price restrictions on private contracting in a world where agents have a limited cognitive ability. People compute the costs and benefits of entering a transaction with an error. The government knows the distribution of true costs and benefits as well...

We conduct a laboratory experiment in which we expose participants to situational social norms of approval or disapproval of lying. While participants on average conform to the situational pressure, the results highlight important differences in individual reactions. Situational norms crowd out...

This paper presents an industry equilibrium model where firms can choose to engage in corporate social responsibility (CSR) activities. We model CSR activities as an investment in customer loyalty and show that CSR decreases systematic risk and increases firm value. These effects are stronger...