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 mechanism driving it is not well understood. In this paper, we show that,...

Various experimental studies have shown that the availability of a punishment option can increase the prevalence of cooperative behaviour in repeated social dilemmas. A punishment option should only matter if it is a credible threat. We investigate if the degree of credibility depends on...

If either property rights or institutions are weak, agents who create wealth by cooperating will later have an incentive to fight over the distribution of it. In this paper we investigate theoretically and experimentally the circumstances under which welfare losses from investment in...

This paper presents a theoretical model and empirical evidence to explain the occurrence of tax amnesties. We treat amnesties as endogenous, resulting from a strategic game between many taxpayers discounting future payments from punishment and a government that balances costs and benefits of...

Traditional micro-lending schemes suffer from high transaction costs relative to the loan size, which renders many small loans uneconomical. This paper proposes an alternative lending protocol with lower transaction costs and shows that in theory repayment rates are not compromised. We then use...

This paper presents a theoretical model and empirical evidence to explain the occurrence of tax amnesties. We treat amnesties as endogenous, resulting from a strategic game between many taxpayers discounting future payments from punishment and a government that trades off costs and benefits of...

We derive necessary and sucient conditions for data sets composed of state-contingent prices and consumption to be consistent with two prominent models of decision making under uncertainty: variational preferences and smooth ambiguity. The revealed preference conditions for subjective expected...

We develop a moral hazard model with auditing where both the principal and the agent can influence the probability that the true state of nature is verified. This setting is widely applicable for situations where fraudulent reporting with costly state verification takes place. However, we use...

This paper re-examines the individual tax-evasion decision. The standard portfolio approach is used to explain why higher tax rates and a higher gross income induce more tax evasion. These empirical facts could not be explained simultaneously with thin the standard framework before. We show...

We present an experimental study on the wasted resources associated with tax evasion. This waste arises from taxpayers and tax authorities, investing costly effort in concealment, respectively detection, of tax evasion. We show that (socially inefficient) efforts depend positively on the...