Reliable institutions - i.e., institutions that live up to the norms that agents expect them to keep - foment cooperative behavior. We experimentally confirm this hypothesis in a public goods game with a salient norm that cooperation was socially demanded and corruption ought not to occur. When...

In fiscal interaction, a policy is evolutionarily stable if, once adopted by all governments, jurisdictions that deviate from it fare worse than those that stick to it. Evolutionary stability is the appropriate solution concept for models of imitative learning (policy mimicking). We show that...

We analyze the interplay of group identity and inter-group conflict in a contest where each of two conflicting groups can develop either a group or an individualistic identity. Contest structures impact on the adoption of identities which themselves influence behavior in the contest. We show the...

One of the main reasons to include pay-as-you-go (PAYG) schemes in multi-pillared pension systems is that they may entail beneficial risk-sharing and diversification features However, depending on the pension formula these features vary significantly for different types of PAYG schemes. We...

We propose a dynamic general equilibrium model with human capital accumulation to evaluate the economic consequences of compulsory services (such as military draft or social services). Our analysis identifies a so far ignored dynamic cost arising from distortions in time allocation over the...

According to many observers, the world is currently getting riskier along many of its dimensions. In this paper we analyse how the welfare state, i.e., social insurance that works through redistributive taxation, should deal with this trend. We distinguish between risks that can be insured by...

We analyse tax competition with corporate income taxes in a common market where tax revenues are allocated according to an apportionment formula. Generally, tax competition is sharper (i.e., equilibrium tax rates are lower) the more tax-elastic is the apportionment formula. This depends on the...

Although voter turnout in the 2013 general election to the German Bundestag differed considerably across income brackets, the income distribution of voters did not differ, in a statistically significant way, from that of the entire population. The non-uniform turnout, thus, is unlikely to affect...

We interpret the Open Method of Coordination (OMC), recently adopted by the EU as a mode of governance in the area of social policy and other ¯elds, as an imitative learning dynamics of the type considered in evolutionary game theory. The best-practise feature and the iterative design of the...