Gift Exchange and the Separation of Ownership and Control

Numerous gift exchange experiments have found a positive relationship between employers' wage offers and workers' effort levels. In (almost) all these experiments the employer both owns and controls the firm. Yet in reality many firms are characterized by the separation of ownership and control. In this paper we explore to what extent this affects the wage-effort relationship observed. We compare the standard bilateral gift exchange game between an owner-manager and a worker with two trilateral ones where the firm is owned by a shareholder and controlled by a manager. The wage-effort relationship we observe is the same in all three situations. Most strikingly, workers still reward higher wages with higher effort levels, even when the manager responsible for choosing the wage does not share in the firm's profits at all. The results of a fourth treatment in which the wage is exogenously given suggest that workers feel reciprocal towards the firm as a whole; both ownership and control are important for the gift exchange relationship

Can Parents Afford to Work? Childcare Costs, Tax-Benefit Policies and Work Incentives

Childcare policies play a crucial role in helping parents reconcile care and employment-related tasks. This paper quantifies the net cost of purchasing full-time centre-based childcare in OECD countries taking into account a wide range of influences on household budgets, including fees charged by childcare providers as well as childcare-related tax concessions and cash benefits available to parents. Building on these calculations, family resources are evaluated for different employment situations in order to assess the financial trade-offs between work and staying at home. Results are disaggregated to identify the policy features that present barriers to work for parents whose employment decisions are known to be particularly responsive to financial work incentives: lone parents and second earners with young children requiring care. The results indicate that the cost of purchasing childcare services should be analysed in conjunction with other social and fiscal policies that affect family incomes. While childcare fees can be very high, high prices may not impede employment if tax-benefit systems incorporate well-balanced provisions that help parents pay for these services. Conversely, even highly subsidised childcare markets can leave parents with little financial gain from employment if high tax burdens or benefit claw-back rates give rise to adverse work incentives

Behind Closed Doors: Revealing the ECB’S Decision Rule

This paper aims at discovering the decision rule the Governing Council of the ECB uses to set interest rates. We construct a Taylor rule for each member of the council and for the euro area as a whole, and aggregate the interest rates they produce using several classes of decision-making mechanisms: chairman dominance, bargaining, consensus, voting, and voting with a chairman. We test alternative scenarios in which individual members of the council pursue either a national or a federal objective. We then compare the interest-rate path predicted by each scenario with the observed euro area's interest rate. We find that scenarios in which all members of the Governing Council are assumed to pursue Euro-area-wide objectives are dominated by scenarios in which decisions are made collectively by a council consisting of members pursuing national objectives. The best-performing scenario is the one in which individual members of the Governing Council follow national objectives, bargain over the interest rate, and their weights are based on their country's share of the zone's GDP

Anti-tumour necrosis factor discontinuation in inflammatory bowel disease patients in remission: study protocol of a prospective, multicentre, randomized clinical trial

Background: Patients with inflammatory bowel disease who achieve remission with anti-tumour necrosis factor (anti-TNF) drugs may have treatment withdrawn due to safety concerns and cost considerations, but there is a lack of prospective, controlled data investigating this strategy. The primary study aim is to compare the rates of clinical remission at 1?year in patients who discontinue anti-TNF treatment versus those who continue treatment. Methods: This is an ongoing, prospective, double-blind, multicentre, randomized, placebo-controlled study in patients with Crohn?s disease or ulcerative colitis who have achieved clinical remission for ?6?months with an anti-TNF treatment and an immunosuppressant. Patients are being randomized 1:1 to discontinue anti-TNF therapy or continue therapy. Randomization stratifies patients by the type of inflammatory bowel disease and drug (infliximab versus adalimumab) at study inclusion. The primary endpoint of the study is sustained clinical remission at 1?year. Other endpoints include endoscopic and radiological activity, patient-reported outcomes (quality of life, work productivity), safety and predictive factors for relapse. The required sample size is 194 patients. In addition to the main analysis (discontinuation versus continuation), subanalyses will include stratification by type of inflammatory bowel disease, phenotype and previous treatment. Biological samples will be obtained to identify factors predictive of relapse after treatment withdrawal. Results: Enrolment began in 2016, and the study is expected to end in 2020. Conclusions: This study will contribute prospective, controlled data on outcomes and predictors of relapse in patients with inflammatory bowel disease after withdrawal of anti-TNF agents following achievement of clinical remission. Clinical trial reference number: EudraCT 2015-001410-1

Positive Expectations Feedback Experiments and Number Guessing Games as Models of Financial Markets

In repeated number guessing games choices typically converge quickly to the Nash equilibrium. In positive expectations feedback experiments, however, convergence to the equilibrium price tends to be very slow, if it occurs at all. Both types of experimental designs have been suggested as modeling essential aspects of financial markets. In order to isolate the source of the differences in outcomes we present several new treatments in this paper. We conclude that the feedback strength (i.e. the ‘p-value’ in standard number guessing games) is essential for the results. Furthermore, positive expectations feedback experiments may provide good representations of highly speculative markets while standard number guessing games model financial markets with more emphasis on dividend yield and value stocks

Strategic Coordination in Forecasting. An Experimental Study

Reputational herding has been considered as a driving force behind economic and financial forecasts clustered around consensus values. Strategic coordination can consequently explain poor performances of prediction markets as resulting from the distinct incentives that forecasters face. While this notion has been considered theoretically and empirically, the underlying behavioral working mechanisms have not yet been described. We thus put forth an exploratory experiment on the emergence and robustness of coordination in a forecasting setting implementing contradictory incentives for accurate forecasts and coordination. Forecasts are shown to be inaccurate and biased toward current values. This in turn has subjects aiming at coordination benefits. Predominantly, coordination is achieved through the risk-dominant equilibrium as the game proceeds. Once established, coordination is fairly stable and adds to overall welfare. Our results support the assumption of rational herding as a driving force for predictions of poor accuracy that are systematically biased towards focal points