A recently much debated issue is why observed investment and growth rates inpoor countries are lower than traditional theory predicts. Empirical evidencesuggests that social and political instability is a major reason for thedivergence between poor and rich countries. However, there is still the...

This paper reports the results of experiments involving a 3-personcoalitionformation game with an ultimatumbargaining character. The grand coalition was always the efficientcoalition,whereas the values of the 2-personcoalitions are varied such that they lead to an efficiency loss inthe range...

This paper reports the results of a cross-country comparison between Austria andJapan for an experimental 3-personcoalition formation ultimatum game. The experimental design allows thecomparison with respect to three decisions. (i)The coalition decision, (ii) proposers' demand behavior in 2- and...

In this paper we investigate experimentally the functioning of a wage tax financed unemployment benefit system on the development of the budget deficit, unemployment, and some other indicators of economic performance in an international economy. We find support for the hypothesis that...

We investigate experimentally the economic effects of wage taxation to finance unemployment benefits for a closed economy and an international economy. The main findings are the following. (i) There is clear evidence of a vicious circle in the dynamic interaction between the wage tax and...

Tax Liability Side Equivalence (tax LSE) claims that the statutory incidence of a tax is irrelevant for its economic incidence. In gift-exchange labor markets, firms provide a gift to workers by paying high wages, and workers reciprocate by providing high efforts. Tax LSE is theoretically...

This paper is concerned with a policy oriented macroeconomic experiment involving an 'international' economy with a relatively small 'home' country and a large 'foreign' country. It compares the economic performance of two alternative tax systems as a means to finance unemployment benefits: a...

We investigate experimentally whether emotions affect bidding behavior in a firstprice auction. To induce emotions, we confront subjects after a first auction series with apositive or negative random economic shock. We then explore the relation between emotions andbidding behavior in a second...

In many business transactions, in labor-management relations, in internationalconflicts, and welfare state reforms bargainers hold strong entitlements that are oftengenerated by claims that are not feasible any more. These entitlements seem to considerablyshape negotiation behavior. By using the...