This paper surveys some of the strategic aspects that emerge if players fight in an alliance against an enemy. The survey includes the free-rider problem and the hold-up problem that emerges in the baseline model, the role of super-modularity in alliance members' effort contributions, the role...

This paper develops a competition theory framework that evaluates an important aspect of the OECD's Harmful Tax Practices Initiative against tax havens. We show that the sequential nature of the process is harmful and more costly than a "big bang" multilateral agreement. The sequentiality may...

We investigate redistributive taxation in a political economy experiment and determine how different patterns of social mobility affect the choices of redistributional taxes. In the absence of social mobility, voters choose tax rates that are very well in line with the prediction derived in the...

This paper studies the role of beliefs about own performance or appearance for compliance at the customs. In an experiment in which underreporting has a higher expected payoff than truthful reporting we find: a large share, about 15-20 percent of the subjects, is more compliant if they have...

This paper empirically studies the voting outcomes of Egypt’s first parliamentary elections after the Arab Spring. In light of the strong Islamist success in the polls, we explore the main determinants of Islamist vs. secular voting. We identify three dimensions that affect voting outcomes at...

This paper derives the optimal financial contract when an entrepreneur can evade taxes in a model of costly state verification. In contrast to the previous literature, we find that standard debt contracts are not optimal when tax evasion is possible. Instead, the optimal contract is debt-like...

This paper analyzes firms' tax evasion behavior in a principal-agent model with multitasking. A generalist firm-owner hires a specialist tax manager who chooses the quantity as well as the quality of tax evasion. Higher quality lowers the firm's expected fine for tax evasion. In contrast to...

The European Court of Justice has confirmed the compatibility of transfer pricing adjustments under the arm's length standard in its "SGI" judgment. In this decision, the ECJ has stated that transfer pricing control is justified as a means to fight "artificial arrangements" while commercially...

Recently, early investments in the human capital of children from socially disadvantaged environments have attracted a great deal of attention. Programs of such early intervention are spreading considerably in the U.S. and are currently tested in several European countries. In a discrete version...

We study conflict between two groups of individuals. Using Schaffer's (1988) concept of evolutionary stability we provide an evolutionary underpinning for in-group altruism combined with spiteful behavior towards members of the rival out-group. We characterize the set of evolutionarily stable...