While many preceding studies on R&D discuss the equilibrium amount and speed of the R&D investment, this paper focuses on its equilibrium direction. Under a broad class of parametric conditions, there is a pure-strategy equilibrium in which multiple firms "cluster", i.e. search for the same...

I study the implications of agency frictions for the pricing policy of institutional market makers. In a setting where a market maker cannot observe the actions of an employed trader, I derive the optimal compensation structure and pricing policy. The theory demonstrates that incentive...

Many empirical questions about economic growth and development are left open due to the lack of long time series of reliable GDP estimates. The share of the labor force employed in agriculture can fill this gap. Agricultural employment shares are highly correlated with GDP per capita, less prone...

Cooperation can be induced by an authority with the power to mete out sanctions for free riders, but law enforcement is prone to error. This paper experimentally analyzes preferences for and consequences of errors in formal sanctions against free riders in a public goods game. With type I...

We show that societies with a history of irrigation-based agriculture have been less likely to adopt democracy than societies with a history of rainfed agriculture. Rather than actual irrigation, the empirical analysis is based on how much irrigation potentially can increase yields. Irrigation...

I establish a positive relationship between family ties and civic virtues, as captured by disapproval of tax and benefit cheating, corruption, and a range of other dimensions of exploiting others for personal gain. I find that family ties are a complement to social capital, using within country...

We experimentally investigate information aggregation through majority voting when some voters are biased. In such situations, majority voting can have a "?dark side"?, i.e. result in groups making choices inferior to those made by individuals acting alone. We develop a model to predict how two...

This paper estimates the effect of trust on internet use by studying the general population as well as second generation immigrants in 29 European countries with ancestry in 87 nations. There is a significant positive effect of trust on internet use. The positive trust effect is not universal to...

We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of...

This study analyses determinants of citation success among authors publishing in economic history journals. Bibliometric features, like article length and number of authors, are positively correlated with the citation rate up to a certain point. Remarkably, publishing in top-ranked journals...