It is generally understood that people care about their absolute income position, and several studies have in fact moved beyond this, showing that people also place considerable significance on their relative income position. However, empirical evidence about the behavioural consequences is...

The risk of external interventions crowding-out intrinsic motivation has long been established in economics. This paper introduces a new dimension by arguing that a crowding-out effect does become possible if individuals receive higher relative compensation. Using a unique, large data set that...

Taxpayers are more compliant than the traditional economic models predict. Why? The literature calls it the “puzzle of tax compliance”. In this paper we use field, experimental and survey data to investigate the empirical evidence on whether presence of tax morale helps to resolve this...

Do employees care about their relative (economic) position among co-workers in an organization? And if so, does it raise or lower their performance? Behavioral evidence on these important questions is rare. This paper takes a novel approach to answering these questions, working with sports data...

The experimental literature and studies using survey data have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. Individuals are concerned about social comparisons....

Many taxpayers truthfully declare their income to the tax administration. Why? In this paper we have found a significant correlation between tax morale and tax evasion, controlling a variety of factors. Furthermore we have analysed tax morale as dependent variable and studied the determinants...

We argue that the decision to bribe bureaucrats depends on the frequency of corruption within a society. We provide a behavioral model to explain this conduct: engaging in corruption results in a disutility of guilt. This implies that people observe a lower probability to be involved in...

Old elites can block changes, but not all do. Why is it that stronger elites may allow more changes than weaker elites? Why do economies with larger stocks of natural resources not grow faster than economies poorer in natural resources? We argue that old elites hold some power to extract rents...

We propose an endogenous growth model that incorporates the importance of business contacts and informal contacts. In our model, sold output increases with the stock of business contacts. The modelling of contact creation is based on matching theory. The cost of creating contacts decreases with...

Contacts and the way they are organized in different economic systemsmatter for the economy. In this paper we introduce the notion of Relational Capital to model contacts. Contacts are an input into sold output in our macro model based on matching theory (Pissarides, 1990). We argue that the...