The main goal of this study is two-fold: (1) to provide a general overview of thecontributions to the literature on the informal sector, with a special focus on the PublicChoice approach; and (2) to compare these contributions across two institutionallydifferent types of countries: developed and...

This discussion paper resulted in a publication in the <Journal of Economic Psychology</I> (2006). Volume 27, issue 3, pages 402-422.<P> A series of experiments in Albania and the Netherlands give us the opportunity to compare behavioral patterns related to tax evasion. Subjects have to decide between a random 'registered' income,...</p></journal>

Competition typically involves two main dimensions, a rivalry for resources and the ranking of relative performances. If socially recognized, the latter yields a ranking in terms of social status. The rivalry of resources resulting from interacting under a competitive incentive scheme has been...

We study how the number of traders affects the interaction between a centralized exchange and bilateral negotiations in an experimental labor market with excess supply and incomplete contracts. Our large markets are three times as large as our small markets. In bilateral negotiations firms...

This paper studies experimentally how firms choose between using a centralized market and bilateral negotiations to recruit new personnel. In the market firms interact with several workers but do not have information about workers' behavior in the past. In the bilateral negotiations firms...

When formal institutions are unfavorable for the development of a free market economy, one reaction in many countries is a spontaneous development of informal economies. This study analyzes the conditions for the informal sector to emerge in a transition country, to wit, Albania. The...

A field survey of households was conducted in Tirana, Albania in 2000. A response rate of 89.3% yielded 1.340 valid questionnaires, allowing us to test Feige's (1997) conjecture that more tax evasion will be observed, when formal and informal institutions clash. Respondents' attitudes towards...

A series of experiments among different social groups in both Albania and the Netherlands give the opportunity to compare behavioral patterns related to tax evasion. Aside from the decision whether or not to evade taxes, subjects have to choose a source of income, where one type enables...

This paper studies experimentally how the existence of social information networks affects the ways in which firms recruit new personnel. Through such networks firms learn about prospective employees performance in previous jobs. Assuming individualistic preferences social networks are predicted...