Our experimental analysis of alliances in conflicts leads to three main findings. First, even in the absence of repeated interaction, direct contact or communication, free-riding among alliance members is far less pronounced than what would be expected from non-cooperative theory. Second, this...

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...

Countries differ in their governmental architectures and in the rules that describe the allocation of tasks, rights and duties across the various levels of government. In this paper, we present a short and selective survey of the development of the theory of optimal allocation of rights and...

This paper studies corporate tax competition if it is costly to learn some of the elements that determine the effective tax burden. Search cost may, but need not, eliminate the tax competition pressure. The outcome depends on the boundaries of tax rate and tax base choices. Search cost can...

Considering several main types of dynamic contests (the race, the tug-of-war, elimination contests and iterated incumbency fights) we identify a common pattern: the discouragement effect. This effect explains why the sum of rentseeking efforts often falls considerably short of the prize that is...

We study the explanatory role of fundamentals versus the effects of nation brands for the size of foreign direct investment (FDI) flows. Using the EUROSTAT data on FDI flows we find that the Anholt Nation Brands Index has a significant and strong impact on FDI flows in a multi-variate analysis...

We analyze the incidence and welfare effects of unit sales taxes in experimental monopoly and Bertrand markets. We find, in line with economic theory, that firms with no market power are able to shift a high share of a tax burden on to consumers, independent of whether buyers are automated or...

This paper studies corporate tax competition if it is costly to learn some of the elements that determine the effective tax burden. Search cost may, but need not, eliminate the tax competition pressure. The outcome depends on the boundaries of tax rate and tax base choices. Search cost can...

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...

We study how norms can solve distributional conflict inside a clan and the efficient coordination of collective action in a conflict with an external enemy. We characterize a fully non-cooperative equilibrium in a finite game in which a self-enforcing norm coordinates the members on efficient...