The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories

This paper surveys recent experimental and field evidence on the impact of concerns for fairness, reciprocity and altruism on economic decision making. It also reviews some new theoretical attempts to model the observed behavior.Behavioural Economics; Other-regarding Preferences; Fairness; Reciprocity; Altruism; Experiments; Incentives; Contracts; Competition

The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories

Chapter written for the Handbook of Reciprocity, Gift-Giving and AltruismBehavioural Economics; Other-regarding Preferences; Fairness; Reciprocity; Altruism; Experiments; Incentives; Contracts; Competition

Giving or Taking: The Role of Dispositional Power Motivation and Positive Affect in Profit Maximization?

Socio-economic decisions are commonly explained by rational cost vs. benefit considerations, whereas person variables have not usually been considered. The present study aims at investigating the degree to which dispositional power motivation and affective states predict socio-economic decisions. The power motive was assessed both indirectly and directly using a TAT-like picture test and a power motive self-report, respectively. After nine months, 62 students completed an affect rating and performed on a money allocation task (Social Values Questionnaire). We hypothesized and confirmed that dispositional power should be associated with a tendency to maximize one’s profit but to care less about another party’s profit. Additionally, positive affect showed effects in the same direction. The results are discussed with respect to a motivational approach explaining socio-economic behaviour.economic decision-making, rational choice theory, personality, implicit power motive, positive affect, operant motive test

Налогообложение в реформах управления государственными финансами

Общепринятые теоретические подходы к реформированию государственной экономики, как правило, вполне пригодны для целей управления изменениями налоговых систем и их составляющих. В частности, в налоговом администрировании особенно проблемным представляется всемерное обеспечение реализации принципов горизонтальной справедливости, а также внедрение подходов, при которых для налогоплательщиков выполнение обязательств по внесению платежей становится более выгодным, чем уклонение от их уплаты. Во многих развивающихся странах неспособность правительства в связи с политическими причинами реализовать задекларированные программы часто является основным препятствием социально-экономического развития. Имплементация многих инициатив по реформированию не всегда успешна из-за отсутствия четких стратегий в государственной политике структурных изменений. Широко известны модели применения новых подходов в системах управления государственными финансами, в частности, при формировании и движении доходов, расходов и долгов. При стандартном анализе налоговых систем часто игнорируется результативность налогового администрирования, связанная с трансакционными издержками и влиянием теневой экономики: речь идет о затратах плательщиков обязательных платежей и сборов и налоговых органов, а также об иных, не подлежащих количественной оценке составляющих налогообложения, включая мотивацию нарушений законодательства. Большое значение имеет налоговое поведение, предотвращение оппортунизма, регулирование способов публичного раскрытия информации, применение системных инструментов взимания налогов. При разработке детальных планов реформирования необходимо стремиться к максимальной эффективности непрерывных циклов движения финансовых ресурсов в доходах и расходах, а также учитывать угрозы нарушения бюджетных процессов, при этом одним из главных должен быть вопрос выбора целей и приоритетов. Известны случаи, когда донорское сообщество и международные организации настаивали на необходимости внедрения определенных образцов «лучшей практики», особенно если реформирование осуществлялось при их финансовой поддержке. Отдавая должное многим позитивным примерам, следует иметь в виду, что для налоговой системы каждой страны характерны специфические черты, поэтому эффективность ее реформирования во многом будет зависеть от учета местных особенностей. В целом задача управления изменениями в системах государственных финансов усложняется внешними и внутренними факторами неопределенности, поэтому при любых обстоятельствах необходимо обеспечивать непрерывность бюджетного процесса и исполнение государством своих конституционных обязательств. Регуляторная функция экономики должна быть направлена на реализацию целей устойчивого экономического развития, соответственно, в рамках налоговой системы, как стратегического элемента госрегулирования, должны работать эффективные механизмы налогов, сборов, а также льгот и преференций во взаимосвязи с расходными статьями, трансфертами и субсидиями.Generally, standard theoretical approaches to reforming national economy are quite usable for goals of managing changes of taxation systems and their components. In particular, of most problematic issue for tax administration is all-round provision of implementing principles of horizontal justice, as well as introducing the approaches which allow the execution of commitments on making payments by taxpayers to be more profitable than evasion. In many developing countries, due to political reasons the government’s inability to implement their declared programs is frequently the main obstacle to improving the socio-economic progress. Implementation of many reform initiatives is not always successful due to absence of clear strategies in governmental policy of structural transformations. There are wide known models of applying new approaches in systems of public finance management (PFM), particularly, in regard of formation and dynamics of revenues, expenses, debts. The standard analysis of tax systems ignores, as a rule, the efficiency of tax administration connected with transaction costs and shadow economy influence: the issue is about the expenses, on one hand, for payers of obligatory payments and levies, and on the other hand, for taxation authorities, as well as about the other taxation components, non-subject to quantitative assessment, including motivation of breaching legislation. Of great significance is tax behavior, prevention of opportunism, regulation of not only tax rates and taxation basis but also of ways of public information accessibility, application of systemic toolkits of tax collection. While developing detailed plans of reforming, it is necessary to strain after maximum efficiency of continuous cycles of financial resource movements in terms of revenues and expenditures, as well as to consider challenges for interruption of the budget processes. At that, one of the main issue is, obviously, selection of targets and priorities. There are known cases, when the donor community and international organizations insist on “the best practices” introduction, especially if the reforming is carried out with their financial support. In justice to numerous positive examples, it should be borne in mind that each taxation system of every country is characterized by their specific traits, so the efficiency of its reforming will at large depend on considering local features. On the whole, the task of managing changes in the public finance systems is getting more complicated in the context of external and internal factors of uncertainty. Thus, in any circumstances it is vital to ensure continuity of the budget process, as well as execution by the state of its constitutional obligations. The regulatory potential of economy should be focused on implementing sustainable economic development goals. Accordingly, in the taxation system framework, as a strategic tool for governmental regulation, there must function efficient mechanisms of taxes and levies, as well as benefits and preferences in coordination with expenditure items, transfers and subsidies

Consistency in Organization (updated)

Internal organization relies heavily on psychological consistency requirements. This thought has been emphasized in modern compensation theory, but has not been extended to organization theory. The perspective sheds new light on several topics in the theory of the firm, like the boundaries of the firm, the importance of fairness concerns within firms, the attenuation of incentives, or the role of routines and incentives. It implies a perceptional theory of the firm that is realistic in the sense advocated by Ronald Coase (1937).disruptive technologies, skunkworks, ownership effect, fairness, employment relationship, Simon, theory of the firm, hierarchy, evolutionary theory of the firm, perceptional theory of the firm, consistency, small numbers, Williamson’s puzzle, centralization paradox, compensation, boundaries of the firm, fairness, idiosyncratic exchange, entitlements, obligations, routines, framing, Tayloristic organization, holistic organization

Perceptions of Fairness and Allocation Systems

This paper explores the conditions of acceptability of differing allocation systems under scarcity and evaluates what makes a price system more or less fair. We find that fairness in an allocation arrangement depend on the institutional settings inherent in the situation, such as information, transparency and competition and the perceived institutional quality (e.g., fiscal exchange and institutional trust). Results also indicate that the solution “weak people first” is seen as the fairest approach to an excess demand situation, followed by “first come, first serve”, the price system and an auction system. On the other hand, a random procedure or an allocation through the government is not perceived to be fair. Moreover, economics students seemed to be less sceptical towards the price system than other subjects although we observe that female students are more sceptical than male students.Fairness, Allocation System, Excess Demand, Price System, Institutions

Social value orientation as a moral intuition: Decision-making in the dictator game

We studied the decision making process in the Dictator Game and showed that decisions are the result of a two-step process. In a first step, decision makers generate an automatic, intuitive proposal. Given sufficient motivation and cognitive resources, they adjust this in a second, more deliberated phase. In line with the social intuitionist model, we show that one’s Social Value Orientation determines intuitive choice tendencies in the first step, and that this effect is mediated by the dictator’s perceived interpersonal closeness with the receiver. Self-interested concerns subsequently lead to a reduction of donation size in step 2. Finally, we show that increasing interpersonal closeness can promote pro-social decision-making.Dictator game; social dilemma; decision-making; two stage model; social value orientation, interpersonal closeness

Research communication

The aim of the article is to identify challenges for strategic planning at the municipal level in Russia in the light of local self-government practices in the Nordic countries. Data for the study were collected from literature sources, as well as through analysis of legal documents and statistics, participatory observations of Russian municipal practices, and participation in the Presidential Program for the training of young managerial staff for the national economy of Russia in Norway in 2012. Municipal practices in Russia and the Nordic countries are examined and compared, and the problems which hinder the Russian municipalities in the elaboration and successful implementation of strategic plans for their development are indicated. The study reveals that there are two major groups of problems: those that have an institutional origin and those that are related to the economic situation within which the local authorities in Russia must work. It is shown that formal institutions at the national level to stimulate strategic planning at the municipal level – especially, necessary laws and regulations – are lacking. The same applies to informal institutions such as traditions and the culture of strategic planning at the local level. A typical economic situation within which the local authorities have to work is extremely low budget security at the municipal level, which gives rise to the competition for funds from the regional consolidated budget between the regional and municipal administrations, prevents them from being partners in the process of municipal strategic planning. Taking Nordic experiences into account, policy suggestions for the improvement of strategic planning at the municipal level in Russia are made