Efficiency wages and endogenous supervision technology

Analyses about supervision technology are not frequent in economic literature. This paper analyses an efficiency wage model with an endogenous choice of supervision technology. Starting from Shapiro and Stiglitz (1984) and Bowles (1985) models’ I show a model with an endogenous and costly supervision technology to better explain the behaviour of firms and workers under asymmetric information in the labour market. In particular, I show how firms allocate costs between wages and supervision under these hypotheses and how unemployment affects this distribution.

Competition among different levels of government: the re-election problem

The aim of this paper is to analyse competition between two levels of government that want to maximise their tax revenues facing the problem of re-election. We assume that citizens have incomplete information about central and local public goods. Then, they are not able to choose a single efficient level of these two goods but they are able to choose a set of combinations. This choice represent the constraint faced by the levels of government. We develop a model starting from this assumption and three extensions to analyse the behaviour of two levels of government in different scenarios. We find that in each situation the equal sharing of the tax revenue is not the best solution for the governments.

Laffer curve in a non-Leviathan scenario: a real - effort experiment

The aim of this paper is to look for the presence of the Laffer curve in a non-Leviathan state using tax rates of 30%, 50% and 70%. We gave the players the opportunity to choose their labour supply both under a Welfare – State scenario and a State – of – Nature contract. The main evidence is that a tax rate of 70% is extremely unpopular and significantly decreases subjects' labour supply without any benefit on the tax revenue. On the other hand, an increase of the tax rate from 30% to 50% does not reduce the per capita labour supply while increasing the tax revenue.Laffer

Non-self-centered inequity aversion matters. A model.

The model by Fehr and Schmidt introduces envy and altruism in the utility function of a representative agent. The aim of this paper is to provide two extensions - non linearity and non self-centredness - to this model. This extension turns out to be more consistent with experimental evidence than the original model.

Cooperation without Punishment

Our experiment is made by three treatments. The first one reproduces the classical public good game. The second environment represents a perfect competition market where the contribution of a representative player to the private good gives a positive rent if and only if it is not lower than the highest contribution of the other players in the group. In the third treatment we consider a winner-take-all market where we have only a winner per group. The aim is to test whether the level of cooperation is minimum under the hypothesis of perfect competition.

An Experimental AK Model of Growth

In this paper we test the AK model of growth with laboratory experiments. In each period, agents produce and trade output in a market, and allocate it to consumption and investment. The economy should experience a constant and positive rate of growth. We analyze two treatments differing from technology. We find evidence of positive and constant growth, and the treatment with a better technology exhibits higher growth. Remarkably, production, consumption and the capital stock grow at the same rate in the treatment with lower technology. We find that this growth process is fuelled by large inequalities between subjects.endogenous growth, capital accumulation, heterogeneity, experiments

An Extension to the Model of Inequity Aversion by Fehr and Schmidt

The aim of this paper is to improve on the model by Fehr and Schmidt (1999) by developing a non-linear model (that leads to interior rather than corner solutions) and by taking into account that different levels of income imply different reactions of fair-minded people. We suggest to modify the inequity-aversion utility function proposed by Fehr and Schmidt by taking into account not only the difference between players' payoffs, but also their absolute value. This allows for a non-linear utility function where different stakes lead to different unique optimal interior solutions.

Free-riding on altruistic punishment? An experimental comparison of third-party-punishment in a stand-alone and in an in-group environment.

This paper deals with the subject of third-party punishment. The paper compares, by means of an economic experiment, punishment by a third party (Stand-Alone case) with punishment by third parties (In-Group environment). This deliberate introduction of a second potential punisher is neither subtle nor marginal. Shifting punishment choices into this "enlarged environment" allows us to study, in a systematic way, the complex relationship between the punisher's expectations about her/his peer's punishment decisions and her/his own punishment choices. In particular, we aim to examine whether, on average, individual punishment is systematically lower in an In-Group environment compared with the Stand-Alone case.Third-Party Punishment, Collective Punishment

Moral Sentiments and Material Interests behind Altruistic Third-Party Punishment

Social norms are ubiquitous in human life. Their role is essential in allowing cooperation to prevail, despite the presence of incentives to free ride. As far as norm enforcement devices are concerned, it would be impossible to have widespread social norms if second parties only enforced them. However, both the quantitative relevance and the motivations underlying altruistic punishment on the part of ‘unaffected’ third parties are still largely unexplored. This paper contributes to shed light on the issue, by means of an experimental design consisting of three treatments: a Dictator Game Treatment, a Third-Party Punishment Game Treatment (Fehr and Fischbacher, 2004) and a Metanorm Treatment, that is a variant of the Third-party Punishment Game where the Recipient can punish the third party. We find that third parties are willing to punish dictators (Fehr and Fischbacher, 2004; Ottone, 2008) and, in doing so, they are affected by ‘reference-dependent fairness’, rather than by the ‘egalitarian distribution norm’. By eliciting players’ normative expectations, it turns out that all of them expect a Dictator to transfer something – not half of the endowment. Consequently, the Observers’ levels of punishment are sensitive to their subjective sense of fairness. A positive relation between the level of punishment and the degree of negative subjective unfairness emerges. Subjective unfairness also affects Dictators’ behaviour: their actual transfers and their ideal transfer are not significantly different. Finally, we interestingly find that third parties are also sensitive to the receivers’ (credible) threat to punish them: as the Dictator’s transfer becomes lower and lower than the Observer’s ideal transfer, the Observer’s reaction is – other things being equal – significantly stronger in the Metanorm Treatment than in the Third-Party Punishment Game Treatment. Hence, despite their being to some extent genuinely nonstrategically motivated, also third parties – like second parties – are sensitive to the costs of punishing.Third-Party Punishment, Moral Sentiments, Material Interests, Subjective Unfairness, Social Norms

Simulating voting rule reforms for the Italian parliament. An economic perspective

The aim of this paper is to contribute to the debate about the electoral rules in Italy. In particular, we simulate some voting rules to test what is the best electoral system on the basis of a utility function that takes into account two indices: representativeness and governability. As long as governability is important, a mixed member system (75% plurality, 25% proportional representation) outperforms the others. Our tool is the software ALEX4.1.Italian Parliament, electoral system, simulations