We study which policy tool and at what level a majority chooses in order to reduce activities with negative externalities. We consider three instruments: a rule, that sets an upper limit to the activity which produces the negative externality, a quota that forces a proportional reduction of the...

We study the dynamic taxation of capital and labor in the Ramsey model under the assumption that taxes and public good provision are decided by a self-interested politician who cannot commit to policies. We show that, as long as the politician is as patient as the citizens, the Chamley–Judd...

Argentina privatized most public utilities during the 1990s but re-nationalized the main water company in 2006. We study beliefs about the benefits of the privatization of water services measured immediately after the 2006 nationalization. Negative opinions about privatization prevail. We find...

We examine the effects of party platforms on the economic opportunities of firms using a unique data set from a political prediction market in Taiwan, a country with two dominant parties whose political cleavage derives mainly from a single issue: the “One China Principle”. We find that...

We examine determinants of immigration requirements in a public goods game experiment with endogenous groups. Initially, the game consists of in-group players who enjoy an existing public good and out-group players who may subsequently enter the group. Motivated by different current migration...

We conduct a controlled field experiment in 52 communities in rural Bolivia to investigate the effect that local authorities have on voluntary public good provision. In our study, community members pool resources to provide environmental education material for local schools. We find that...

Experimental studies have shown that sanctions effectively deter free riding within groups. However, the over-use of costly punishment may actually harm overall welfare. A main reason for over-punishment is that free-riders generate negative emotions that likely favor excessive punishments. In...

A normative conflict arises when multiple plausible rules exist, specifying how one ought to behave in a given situation. In such cases, enforcing one normative rule can lead to a sequence of mutual retaliatory sanctions, which we refer to as a feud. We investigate the hypothesis that normative...

We design an experiment to test whether incomplete crowding out in dictator games can be rationalized by the impurely altruistic preferences. By giving the recipients an endowment of varying levels, we create an environment in which crowding out may occur. We find that the behavior of 66% of the...

The data from experiments with the Voluntary Contributions Mechanism suggest five stylized facts, including the restart effect. To date, no theory has explained all of these facts simultaneously. We merge our Individual Evolutionary Learning model with a variation of heterogeneous...