We study a small open economy characterized by two empirically important frictions- incomplete financial markets and an inability of the government to commit to policy. We characterize the best sustainable fiscal policy and show that it can amplify and prolong shocks to output. In particular,...

This paper studies the construction of social preferences in the lab. Experimental subjects have the opportunity to donate to a charity and to allocate money in a conventional dictator game. The results show that charitable donations and dictator game allocations are positively correlated. The...

We study a small open economy characterized by two empirically important frictions - incomplete financial markets and an inability of the government to commit to policy. We characterize the best sustainable fiscal policy and show that it can amplify and prolong shocks to output. In particular,...

The conflict between pro-self and pro-social behaviour is at the core of many key problems of our time, as, for example, the reduction of air pollution and the redistribution of scarce resources. For the well-being of our societies, it is thus crucial to find mechanisms to promote pro-social...

This paper studies the construction of social preferences in the lab. Experimental subjects have the opportunity to donate to a charity and to allocate money in a conventional dictator game. The results show that charitable donations and dictator game allocations are positively correlated. The...

Natural resource management often involves social dilemmas. Institutional and behavioural economics have shown that other-regarding preferences and pro-social behaviour can help overcome such dilemmas. Interventions that induce resource users to consider a perspective broader than their own may...

We test the importance of social norms for market interactions associated with negative real-world externalities in a large-scale experiment with a heterogeneous population sample from Germany. The majority of experimental participants refuses to trade, thus behaving in a moral way. Our data...

Does an economics education affect an individual's behavior? While it has been shown that choices made by those who have studied economics are different, what is unclear is whether differences in behavior are, in fact, due to the education or simply reflect the fact that those who choose to...

We propose a simple utility framework and design a novel two-part experiment to study the relevance of personal norms across various economic games and settings. We show that personal norms — together with social norms and monetary payoff — are highly predictive of individuals’ behavior....

Choosing what is morally right can be based on the consequences (ends) resulting from the decision - the Consequentialist view - or on the conformity of the means involved with some overarching notion of duty - the Deontological view. Using a series of experiments, we investigate the overall...