How to Allocate R&D (and Other) Subsidies: An Experimentally Tested Policy Recommendation

This paper evaluates how R&D subsidies to the business sector are typically awarded. We identify two sources of ine_ciency: the selection based on a ranking of individual projects, rather than complete allocations, and the failure to induce competition among applicants in order to extract and use information about the necessary funding. In order to correct these ine_- ciencies we propose mechanisms that include some form of an auction in which applicants bid for subsidies. Our proposals are tested in a simulation and in controlled lab experiments. The results suggest that adopting our proposals may considerably improve the allocation

How to Allocate R&D (and Other) Subsidies: An Experimentally Tested Policy Recommendation

This paper evaluates how R&D subsidies to the business sector are typically awarded. We identify two sources of ine_ciency: the selection based on a ranking of individual projects, rather than complete allocations, and the failure to induce competition among applicants in order to extract and use information about the necessary funding. In order to correct these ine_- ciencies we propose mechanisms that include some form of an auction in which applicants bid for subsidies. Our proposals are tested in a simulation and in controlled lab experiments. The results suggest that adopting our proposals may considerably improve the allocation.Research; Subsidies; Experimental Economics

Suicidal altruism under random assortment

Questions: Can there be a selective explanation for suicide? Or are all suicides evolutionary mistakes, ever pruned by natural selection to the extent that the tendency to perform them is heritable? Model: A simple variant of trait group selection (where a population is divided into mutually exclusive groups, with the direct effects of behaviour limited to group-mates), employing predators as the mechanism underlying group selection. Predators evaluate groups to avoid potentially suicidal defenders (which, when present, limit a predator’s net return), thus acting as a group selection mechanism favouring groups with potentially suicidal altruists. Conclusion: The model supports contingent strong altruism (depressing one’s direct reproduction – absolute fitness – to aid others) without kin assortment. Even an extreme contingent suicidal type (destroying self for the sake of others) may either saturate a population or be polymorphic with a type avoiding such altruism. The model does not, however, support a sterile worker caste, where sterility occurs before life-history events associated with effective altruism; under random assortment, reproductive suicide must remain contingent or facultative.Publicad

Low Price Equilibrium in Multi-Unit Auctions: The GSM Spectrum Auction in Germany

The second-generation GSM spectrum auction in Germany is probably the most clear cut example of a low price outcome in a simultaneous ascending-bid auction.The present paper gives an account of the events, describes the auction rules and market conditions, and provides a theoretical explanation of low price equilibria in simultaneous, ascending-bid auctions.In particular it is shown that the low price equilibrium that implements the efficient allocation is the unique perfect equilibrium of that game.Multi-unit auctions, spectrum auctions, telecomm-unications, industrial organization, game theory

How eBay Sellers set “Buy-it-now” prices - Bringing The Field Into the Lab

In this paper we introduce a new type of experiment that combines the advantages of lab and field experiments. The experiment is conducted in the lab but using an unchanged market environment from the real world. Moreover, a subset of the standard subject pool is used, containing those subjects who have experience in conducting transactions in that market environment. This guarantees the test of the theoretical predictions in a highly controlled environment and at the same time enables not to miss the specific features of economic behavior exhibited in the field. We apply the proposed type of experiment to study seller behavior in online auctions with a Buy-It-Now feature, where early potential bidders have the opportunity to accept a posted price offer from the seller before the start of the auction. Bringing the field into the lab, we invited eBay buyers and sellers into the lab to participate in a series of auctions on the eBay platform. We investigate how traders' experience in a real market environment influences their behavior in the lab and whether abstract lab experiments bias subjects' behavior

Do individuals recognize cascade behavior of others? An Experimental Study

In an information cascade experiment participants are confronted with artificial predecessors predicting in line with the BHW model (Bikchandani et al., 1992). Using the BDM (Becker et al., 1964) mechanism we study participants' probability perceptions based on maximum prices for participating in the prediction game. We find increasing maximum prices the more coinciding predictions of predecessors are observed, regardless of whether additional information is revealed by these predictions. Individual price patterns of more than two thirds of the participants indicate that cascade behavior of predecessors is not recognized

A new methodology for the history of economic thought

Der Artikel unternimmt zu beweisen wie eine historische Vorgehensweise dazu beitragen kann verschiedene Probleme der modernen Wirtschaftstheorie besser zu verstehen. Erstens erläutern die Verfasser ihre 'Forschungsmethodologie', um die Relevanz der historischen Analyse in den Wirtschaftswissenschaften widerzuspiegeln. Die Verfasser betonen deren interdisziplinäre Vorgehensweise, da sie die Moral- und politische Philosophie, die Dogmengeschichte, die Wirtschaftstheorie sowie die modernen analytischen Instrumente einschließt. Zweitens präsentieren die Verfasser zwei Beispiele von vollendeten oder laufenden Arbeiten, die auf ihrer Methodologie beruhen.The article aims to stress that historical approach can contribute to address issues faced by modern economic theory. So as to show the relevance of historical analysis in economics, the author's first state the 'methodology' they use in their researches. The author's emphasize their interdisciplinary feature since it involves moral and political philosophy, history of economic thought, economic theory and modern analytical tools. Second, they suggest two examples of works, finished or current, which are based on their methodology

Wirtschaftskultur und Transformation

Die neoklassische Wirtschaftstheorie hatte die kulturelle Einbettung des Wirtschaftens nicht berücksichtigt. Die neuere Wirtschaftsforschung geht aber davon aus, dass die Kultur eine Rolle spielt. Wie wirken sich kulturelle Traditionen auf die wirtschaftliche Entwicklung aus? Welchen Einfluss hat die Kultur auf den Transformationsprozess? --

Reference Group Behaviour and Economic Incentives

These notes, published in 1981, introduce the concept of the social multiplier: If the behavior of agents is positively influenced by what members of their reference group do, this enhances the power of economic incentives