When Social Forces Remove the Impact of Competition. Social Exchange in Experimental Labor Markets

Do competitive markets remove the impact of social norms and customs on market out-comes? Or are these social forces capable of exerting a persistent influence? Many economists seem to believe that social norms and customs have, if at all, only temporary effects in competitive markets. So far this belief has been confirmed by the evidence of many competitive market experiments. In this paper we report the results of a series of competitive market and bilateral bargaining experiments. They indicate that social norms may not only persist in a competitive environment but that they may completely remove the impact of competition on the market outcome.Competition, Social Exchange, Trust, Reciprocity, Social Norms

Die Anreizwirkungen des Länderfinanzausgleichs: Reformanspruch und Wirklichkeit

Dieser Beitrag beschäftigt sich mit der Anreizproblematik unterschiedlicher Finanzausgleichssysteme. Zunächst wird der theoretische und empirische Zusammenhanf zwischen föderalen Ausgleichsregeln und Makrogrößen, z.B. dem Wirtschaftswachstum, diskutiert. Daran anschließend wird geprüft, ob mit der Reform im Jahre 2001 tatsächlich der Länderfinanzausgleich anreizfreundlicher ausgestaltet wurde. Schließlich wird eine Perspektive für künftige Reformen entwickelt, mit der die bestehenden Anreizprobleme entschärft werden können

Coercive and legitimate authority impact tax honesty:Evidence from behavioral and ERP experiments

Cooperation in social systems such as tax honesty is of central importance in our modern societies. However, we know little about cognitive and neural processes driving decisions to evade or pay taxes. This study focuses on the impact of perceived tax authority and examines the mental chronometry mirrored in ERP data allowing a deeper understanding about why humans cooperate in tax systems. We experimentally manipulated coercive and legitimate authority and studied its impact on cooperation and underlying cognitive (experiment 1, 2) and neuronal (experiment 2) processes. Experiment 1 showed that in a condition of coercive authority, tax payments are lower, decisions are faster and participants report more rational reasoning and enforced compliance, however, less voluntary cooperation than in a condition of legitimate authority. Experiment 2 confirmed most results, but did not find a difference in payments or self-reported rational reasoning. Moreover, legitimate authority led to heightened cognitive control (expressed by increased MFN amplitudes) and disrupted attention processing (expressed by decreased P300 amplitudes) compared to coercive authority. To conclude, the neuronal data surprisingly revealed that legitimate authority may led to higher decision conflict and thus to higher cognitive demands in tax decisions than coercive authority.Austrian Science Fund (FWF) [24863-G1]; Austrian Economic Chamber (WKO)SCI(E)SSCIARTICLE71108-11171

Tax authorities’ interaction with taxpayers: A conception of compliance by power and trust.

AbstractTax compliance represents a social dilemma in which the short-term self-interest to minimize tax payments is at odds with the collective long-term interest to provide sufficient tax funds for public goods. According to the Slippery Slope Framework, the social dilemma can be solved and tax compliance can be guaranteed by power of tax authorities and trust in tax authorities. The framework, however, remains silent on the dynamics between power and trust. The aim of the present theoretical paper is to conceptualize the dynamics between power and trust by differentiating coercive and legitimate power and reason-based and implicit trust. Insights into this dynamic are derived from an integration of a wide range of literature such as on organizational behavior and social influence. Conclusions on the effect of the dynamics between power and trust on the interaction climate between authorities and individuals and subsequent individual motivation of cooperation in social dilemmas such as tax contributions are drawn. Practically, the assumptions on the dynamics can be utilized by authorities to increase cooperation and to change the interaction climate from an antagonistic climate to a service and confidence climate

Genome-wide Association Study of Alcohol Dependence

Identification of genes contributing to alcohol dependence will improve our understanding of the mechanisms underlying this disorder

When Social Forces Remove the Impact of Competition: Social Exchange in Experimental Labor Markets

Abstract: Do competitive markets remove the impact of social norms and customs on market out-comes? Or are these social forces capable of exerting a persistent influence? Many economists seem to believe that social norms and customs have, if at all,only temporary effects in competitive markets. So far this belief has been confirmed by the evidence of many competitive market experiments. In this paper we report the results of a series of competitive market and bilateral bargaining experiments. They indicate that social norms may not only persist in a competitive environment but that they may completely remove the impact of competition on the market outcome.

Social exchange in the labor market: reciprocity and trust versus egoistic money maximization

This paper presents results from a series of experimental labor markets. The implications of standard economic theory are contrasted with social exchange predictions. According to standard economic theory, workers and employers are rational egoistic individuals who strive to maximize profit. In markets, as well as in bilateral interactions, employers should offer the lowest wages which workers will accept and workers should provide the effort level which maximizes their utility (i.e. the minimum permitted). According to social exchange principles, wage negotiations between employers and workers are not only determined by egoistic profit maximization but also by social norms. Interacting partners stick to the norm of reciprocity and reciprocate favors. Employers are supposed to trust reciprocation norms and offer higher than reservation wages, expecting workers to provide higher effort in response. Consequently, workers' effort choices are expected to be positively correlated to employers' wage offers. Four experimental conditions were realized to test hypotheses deriving from standard economic theory and social exchange theory. In general, standard economic theory was poorly supported. Reciprocation norms were found to be important and, on average, cooperation was considerably higher than predicted by economic theory. There were, however, significant differences between participants: some workers cooperated over a series of bilateral trading periods and in market situations, whereas others did not. It is argued that economic theory needs to take into account both social norms and also personality differences as well as nonstandard motives which underlie human behavior

Umwelt und Gesundheit

Fehr R, Kobusch A-B, Wichmann H-E. Umwelt und Gesundheit. In: Hurrelmann K, ed. Gesundheitswissenschaften: Handbuch für Lehre, Forschung und Praxis. Weinheim [u.a.]: Beltz; 1993: 295-314