This paper studies whether institutions matter for economic performance. For this aim, we first construct a simple framework illustrating how to examine the interaction between institutions and economic performance from a different point of view. Then, using this framework, we introduce an...

Trust affects almost all human relationships - in families, organizations, markets and politics. However, identifying the conditions under which trust, defined as people's beliefs in the trustworthiness of others, has a causal effect on the efficiency of human interactions has proven to be...

Under weak contract enforcement the trading parties' trust, defined as their belief in other's trustworthiness, appears important for realizing gains from trade. In contrast, under strong contract enforcement beliefs about other's trustworthiness appear less important, suggesting that trust and...

The widespread use of markets leads to unprecedented material well-being in many societies. We study whether market interaction, as a side effect, erodes moral values. In an influential paper, Falk and Szech (2013) provide experimental data that seem to suggest that "market interaction erodes...

Under weak contract enforcement the trading parties' trust, defined as their belief in other's trustworthiness, appears important for realizing gains from trade. In contrast, under strong contract enforcement beliefs about other's trustworthiness appear less important, suggesting that trust and...

We exploit a sharp birthday discontinuity in a large and universal Swedish cash transfer program, creating plausibly exogenous variation in the default disbursement option, while holding entitlements and other financial incentives constant. When the cash transfer is paid out to the mother by...

Do people conform to social norms at least partly to signal their social preferences? Using a vignette experiment, we find that parents who do not marry off their under-age daughters in Malawian villages where child marriage is prevalent are perceived as less altruistic, reciprocal, and...

In Malawi, only 5% of parents state that the right age for a woman to marry is below 18, but 42% of girls get married before they reach that legal age. We document that social image concerns are likely an important mechanism behind that wedge: where the prevalence of child marriage is high,...

The process by which scholarly papers are selected for publication in a journal is faced with serious problems. The referees rarely agree and often are biased. This paper discusses two alternative measures to evaluate scholars. The first alternative suggests input control. The second one...

We study the bilateral trade problem put forward by Myerson and Satterthwaite (1983) under the assumption that agents are loss-averse, using the model developed by Koszegi and Rabin (2006, 2007). We show that the endowment effect increases the sellers information rent, and that the attachment...