It is well known that ex post efficient mechanisms for the provision of indivisible public goods are not interim individually rational. However, the corresponding literature assumes that agents who veto a mechanism can enforce a situation in which the public good is never provided. This paper...

This paper provides a theoretical foundation which supports the degressive proportionality principle in apportionment problems. The core of the argument is that each individual derives utility from the fact that the collective decision matches her own will with some frequency, with marginal...

We consider hybrid procedures: a first step of reducing the game by iterated elimination of weakly dominated strategies (IEWDS) followed by a second step of applying an equilibrium refinement. We show that the set of perfect/proper outcomes of a reduced normal-form game might be larger than the...

This paper provides a theoretical foundation that supports the degressive proportionality principle in apportionment problems, such as the allocation of seats in a federal parliament. The utility assigned by an individual to a constitutional rule is a function of the frequency with which each...

We study how banks should protect their credit departments against the external influence from potential borrowers. We analyze four mechanisms that are widespread in practice: a credit board with unanimity or simple majority, a hierarchy and an advisory system. A bank faces a trade-off between...

Capital market theory predicts that the wealth distribution of an economy affects real interest rates. This paper empirically analyzes this relationship for the US, the UK and Sweden. We obtain that measures of wealth inequality are positively linked to the real rate on government securities in...

What drives people's support of governmental reduction of income inequality? We employ data from a large international survey in order to evaluate the explanatory power of three competing forces, referred to as the ‘homo oeconomicus effect’, the ‘public values effect’, and the ‘social...

About a decade ago, papers by Grüner and Hefeker (1999) and Cukierman and Lippi (2001) predicted that European Monetary Union may lead to higher inflation and unemployment in some participating countries. Meanwhile, we know that these predictions have not come true. The present paper develops a...