Till labor cost do us part. On the long run convergence of EMU countries

A sustainable long-run pattern in the relative competitiveness of euro area countries is a key factor for the survivorship of the monetary union. We analyze the issue focussing on unit labor cost dynamics using cointegration analysis for the whole economy and for the manufacturing sector separately. Our findings show that the introduction of the euro has increased, rather than decreased, the distance among member countries, as measured in the metric of unit labor costs. Dispersion of productivity rather than wage compensation suggests that persisting idiosyncratic dynamics are driven by real factors, i.e. diverging technological patterns rather than by monetary factors, expressed by wage compensation.

Are Self-regarding Subjects More Strategic?

To investigate the relationship between the depth of strategic thinking and social preferences we ask subjects in an experiment to perform dictator games and a guessing game. The guessing game measures depth of strategic thinking while dictator games control for social preferences. When performing a comparison within the same degree of strategic reasoning, self-regarding subjects show more strategic sophistication than other subjects.

The Minority Game Unpacked: Coordination and Competition in a Team-based Experiment

In minority games, players in a group must decide at each round which of two available options to choose, knowing that only subjects who picked the minority option obtain a positive reward. Previous experiments on the minority and similar congestion games have shown that players interacting repeatedly are remarkably able to coordinate eciently, despite not conforming to Nash equilibrium behavior. We conduct an experiment on a Minority-of-three game in which each player is a team composed by three subjects. Each team can freely discuss its strategies in the game and decisions must be adopted through a majority rule. Team discussions are recorded and their content analyzed to detect evidence of strategy co-evolution between teams playing together. Our main results of group discussion analysis show no evidence supporting the mixed strategy Nash equilibrium solution, suggesting that individuals' non conformity to Nash at the choice data level does not derive from imperfect ability to randomize, but by players intentionally not pursuing this type of strategy. In addition, teams that are more successful tend to be more self-centered over time, paying more attention to their own past successful strategies than to the behavior of other teams. Moreover, we nd evidence of mutual adaptation between players' strategies, as teams that are more sophisticated (i.e., they pay more attention to other teams' moves) tend, on average, to induce other teams to be less sophisticated and more self-centered. Our results contribute to the understanding of coordination dynamics resting on heterogeneity and co-evolution of decision rules rather than on conformity to equilibrium behavior, both at the aggregate and at the individual level.

Reflectivity relates differently to pro sociality in na\uefve and strategic subjects

Is pro sociality a natural impulse or the result of a self-controlled behavior? We investigate this issue in a lab in the field experiment with participants from the general adult population in Italy. We find two key results: first, that there is a positive relationship between pro sociality and strategic reasoning. Second, that reflectivity relates to lower pro sociality but only among strategic subjects, indicating that the intuitive view of pro sociality is valid only among strategic individuals. Non-strategic individuals are instead intuitively selfish. We surmise that these results emerge due to a common cognitive root between strategizing and pro sociality, namely empathy

Reflexivity reduces pro-sociality but only among strategic subjects

Is pro-sociality a natural impulse or the result of a self-controlled behavior? The literature is not quite univocal on the cognitive mechanisms behind this key feature of observed human behavior. We investigate this issue in a lab in the field experiment with participants selected among the general adult population in Italy. We test prosociality with a Distribution game (or three player dictator game), reflexive versus impulsive behavior with an extended version of the Cognitive Reflection Test and strategic reasoning with the guessing game. In the latter, we request to participants to provide also a motivation of the choice they made in the game. We find two important results: first, that there is a positive relationship between pro-sociality and strategic reasoning. Second, reflexivity reduces pro-sociality but only among strategic subjects. Our results support the intuitive view of pro-sociality: naive individuals that do not control their impulses behave pro-socially, while among strategic subjects the ability to suppress the pro-social impulse is achieved by those subjects making a more selfcontrolled and reflexive choice

A test of the Behavioral versus the Rational model of Persuasion in Financial Advertising

We present a test of the behavioral versus the rational model of advertising in the financial market. We analyze the Granger-causality relationship existing between Comit stock market index and advertising of financial products and services from the most important daily published financial newspaper in Italy. We run the test for both the risky and non-risky advertising, finding that the behavioral model of advertising is supported when risky financial products and services are considered, while the rational model is true for the non-risky. We ascribe this result to the dual process of reasoning: When investors evaluate the decision to buy risky financial products and services, they activate the automatic, rapid decision making process. The behavioral model of advertising copes with it and provides an advertising strategy that responds to market evolutions. When non-risky financial products and services are considered, a different mental process, requiring slow and sequential reasoning, operates, compatibly with a rational decision making process

Reputation and punishment sustain cooperation in the optional public goods game

Cooperative behaviour has been extensively studied as a choice between cooperation and defection. However, the possibility to not participate is also frequently available. This type of problem can be studied through the optional public goods game. The introduction of the 'Loner' strategy' allows players to withdraw from the game, which leads to a cooperator-defector-loner cycle. While pro-social punishment can help increase cooperation, anti-social punishment - where defectors punish cooperators - causes its downfall in both experimental and theoretical studies. In this paper, we introduce social norms that allow agents to condition their behaviour to the reputation of their peers. We benchmark this with respect both to the standard optional public goods game and to the variant where all types of punishment are allowed. We find that a social norm imposing a more moderate reputational penalty for opting out than for defecting increases cooperation. When, besides reputation, punishment is also possible, the two mechanisms work synergically under all social norms that do not assign to loners a strictly worse reputation than to defectors. Under this latter set-up, the high levels of cooperation are sustained by conditional strategies, which largely reduce the use of pro-social punishment and almost completely eliminate anti-social punishment. This article is part of the theme issue 'The language of cooperation: reputation and honest signalling'

Customer Complaining and Probability of Default in Consumer Credit

In many countries, Banking Authorities have adopted an Alternative Dispute Resolution (ADR) procedure to manage complaints that customers and financial intermediaries cannot solve by themselves. As a consequence, banks have had to implement complaint management systems in order to deal with customers’ demands. The growth rate of customer complaints has been increasing during the last few years. This does not seem to be only related to the quality of financial services or to lack of compliance in banking products. Another reason lies in the characteristics of the procedures themselves, which are very simple and free of charge. The paper analyzes some determinants regarding the willingness to complain. In particular, it examines whether a high customers’ probability of default leads to an increase in non-valid complaints. The paper uses a sample of approximately 1,000 customers who received a loan and made a claim against the lender. The analysis shows that customers with higher Probability of Default are more likely to make claims against Financial Institutions. Moreover, it shows that opportunistic behaviors and non-valid complaints are more likely if the customer is supported by a lawyer or other professionals and if the reason for the claim may result in a refund or damage compensation

Food waste as a (negative) measure of social capital. A study across Italian Provinces

Household food waste is a crucial problem in developed countries. Food waste behaviour is the result of complex interactions among economic factors, deeply rooted habits, and social norms. It can thus be considered a measure of the social capital characterizing a community. We test this hypothesis using a national-level dataset on household food-related behaviours and opinions in Italy gathered in 2016. This country is an ideal test bed for a comparative analysis on social capital. We find household food waste measures to be negatively related with the local level of social capital. This relationship is mediated by family income, as it becomes weaker for better-off families. Furthermore, we find that behaviours and opinions eliciting status concerns with respect to food, as well as lack of organisational abilities, generate increased food waste. In turn, these behaviours and opinions are more prevalent in areas with low social capital. Our results, captured by a simple model where food waste decisions are considered in the context of a modified public good game, allow to derive several policy implications for the reduction of food waste

Late-Holocene climate dynamics recorded in the peat bogs of Tierra del Fuego, South America

The ombrotrophic peat bogs of Tierra del Fuego are located within the southern westerly wind belt (SWWB), which dominates climate variability in this region. We have reconstructed late-Holocene water-table depths from three peat bogs and aimed to relate these records to shifts in regional climate. Water-table depths were quantified by the analysis of testate amoeba assemblages, and a regional transfer function was used to infer past water-table depths. During the last 2000 years, testate amoeba assemblages have been relatively stable, with a dominance of Difflugia pulex and Difflugia pristis type, and an increase in Assulina muscorum and other Euglyphida at the top of each section. Multivariate analyses show that water-table depth remained the main environmental variable explaining assemblages along the TiA12 core, but reconstructions were not significant for the two other cores. In line with the low variability in assemblages, water tables were relatively stable during the last 2000 years. Slightly wetter conditions were found between ~1400 and 900 cal. BP and a pronounced recent dry shift was reconstructed in all of the three peat profiles. Considering the regional climatic context, this recent shift may have been forced by a decrease in precipitation and warmer conditions linked to an increase in the importance of the SWWB. Nevertheless, we cannot exclude the influence of higher UV-B radiation resulting from the local degradation of the ozone layer since the late 1970s, which may have had an additional effect on the relative presence of A. muscorum in the southern Patagonian region