This paper examines the Clean Development Mechanism (CDM) of the Kyoto Protocol and its welfare implications for the countries engaging in it. It uses a simultaneous public good game, the public good being emission abatement, to asses the impact of the CDM on the public good provision...

This study compares contests with exogenous alliance formation under proportional sharing rules with contests among individual players in a laboratory setting. The standard equilibrium predictions are identical for all players because the proportional rule ensures the same payoff incentives for...

In a principal-agent model, we analyze the consequences of bonus taxes agents need to pay, limited deductibility of bonuses from company profits and a corporate income tax (CIT). We explore how these tax instruments affect managerial incentives and how they change the design of incentive...

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...

Consumers often complain that retail prices respond faster to increases in wholesale prices than to decreases. Despite many empirical studies confirming this "Rockets-and-Feathers" phenomenon for different industries, the mechan¬ism driving it is not well understood. In this paper, we show...

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...