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We carry out an experiment on a macroeconomic price setting game where prices are complements. Despite relevant information being common knowledge and price flexibility we observe significant deviation from equilibrium prices and history dependence. In a first treatment we observe that...
Persistent link: https://www.econbiz.de/10009646651
We run an experiment where groups of six subjects must set prices in a non-stationary macroeconomic environment, where prices are complements. The exogenous variable, a business indicator, is common knowledge and prices are flexible, disregarding sticky prices or sticky information. In a first...
Persistent link: https://www.econbiz.de/10011051925
Psychology has inspired economics to recognize intentions in addition to outcomes as being relevant for utility and behavior. Reciprocal behavior, in particular, has been related to the kindness of chosen actions and how kindness can be derived from the benefits obtained in unchosen...
Persistent link: https://www.econbiz.de/10010956820
The latest Argentinean debt restructuring was the first time the resolution of a modem financial crisis was completely handed over to the private financial markets without official intervention by public institutions. We argue that the resulting harshest haircut for private creditors in history...
Persistent link: https://www.econbiz.de/10009646625
The Transparency International Corruption Perceptions Index is a composite index with a focus on cross-section information. The usage of the data in the form of time series has been discouraged in the past, due to changes in the composition of sources. Basing assessments only on sources that...
Persistent link: https://www.econbiz.de/10009646626
Corruption among central banks induces distorted policies by, first, increasing the inflation bias and, second, potentially inducing a pro-cyclical adjustment of employment. In response to a negative supply shock a corrupt central banker is tempted to decrease money supply. In this case, he...
Persistent link: https://www.econbiz.de/10009646627
Recent empirical studies claim that, in addition to levels of corruption, investors are deterred by its unpredictability. I claim instead that it is petty corruption that deters investors. I employ seven subcomponents of corruption for a sample of 102 countries that appear in the 2003 Global...
Persistent link: https://www.econbiz.de/10009646628
The bank lending channel (BLC) has found entrance into standard economic textbooks. But the approach, as presented by Bernanke and Blinder [1988] operates with lopsided loan demand, money demand and money supply functions. This invalidates the idea that potential changes in the supply of loans...
Persistent link: https://www.econbiz.de/10009646630
Persistent link: https://www.econbiz.de/10009646632
Corrupt arrangements are characterized by a high risk of opportunism. Moreover, denunciation and extortion add another layer of uncertainty for participants in corrupt transactions. This paper demonstrates how legislators can use an asymmetric design of criminal sanctions to amplify these...
Persistent link: https://www.econbiz.de/10009646635