The Evolution of Sharing Rules in Rent Seeking Contests: Incentives Crowd Out Cooperation

Modern societies are characterized by competing organizations that rely predominantly on incentive schemes to align the behavior of their members with the organizations’ objectives. This study contributes to explaining why in so many cases incentive schemes have gradually crowded out cooperation as an organization device. Our explanation does not draw on free-riding, the obvious Achilles’ heel of cooperation, but relies completely on fundamental group contest mechanisms. By investigating a canonical rent seeking model and adopting an evolutionary perspective, the analysis identifies shortcomings in previous results, sets the record straight, and explains why the process of incentivizing organizations is protracted.group contests, rent-seeking, sharing rules, cooperation

Globalization and Gender Equality in Developing Countries

This study empirically assesses the influence of globalization on the institutional root causes of gender equality as measured by the new OECD Social Institutions and Gender Index (SIGI). We capture the multifaceted concept of globalization with the KOF index and its three sub-indices which measure the economic, social and political dimensions of globalization. Observing the progress of globalization for a sample of almost one hundred countries at ten year intervals starting in 1970, we find that economic and social globalization exerted a decidedly positive influence on the social institutions which underlie gender equality.globalization, gender equality, social institutions

Evaluation of Researchers: A Life Cycle Analysis of German Academic Economists

In this paper we ague that any meaningful bibliometric evaluation of researchers needs to take into account that research productivity follows distinct life cycles. Using an encompassing data set portraying the research behavior of German academic economists, we first show that research productivity crucially depends on career age and vintage. Based on the identified effects, we develop a simple formula that shows how a researcher’s performance compares to that of his or her peers. This kind of information may serve as an input for performance-related remuneration and track-record based allocation of research grants. We then go on to investigate the persistence of individual productivity. The Persistence issue is of special importance in the academic labor market because of the irrevocable nature of tenure. Finally, we show how life cycle considerations can be used in evaluations of university departments in order to render the resulting rankings insensitive to the age structure of the evaluated faculties.research productivity, performance evaluation, life cycles, rankings

Globalisation, Competitive Governments, and Constitutional Choice in Europe

The traditional school of economic policy analysis predicts that globalisation will give rise to predatory competition between the governments of the European nation states. The consequence is anticipated to be a marked reduction in, if not the destruction of, the benevolent Welfare State. The objective of this contribution is to present the main arguments that have led us to believe that, this traditional literature notwithstanding, a European constitution should not restrict but rather should encourage horizontal and vertical governmental competition. In our view the European political order, in defining the relationship among member states and also the relationship between the member states and the EU, ought to be inspired by what we know about competition in the commercial sphere.globalisation, globalization

Political Yardstick Competition, Economic Integration, and Constitutional Choice in a Federation

This paper investigates the behavior of rent-seeking politicians in an environment of increasing economic integration. The focus of the paper is on the implications of globalization-induced political yardstick competition for constitutional design with a view to the current discussion in the European Union. In contrast to the established literature, we carefully portray the double-tiered government structure in federal systems. The number of lower-tier governments and the allocation of policy responsibilities to the two levels of government are subject to constitutional choice.Economic Integration, Federalism, Political Economy, Yardstick Competition

Reputation, Price, and Death: An Empirical Analysis of Art Price Formation

We analyze how an artist’s death influences the market prices of her works of art. Death has two opposing effects on art prices. By irrevocably restricting the artist’s oeuvre, prices, ceteris paribus, increase when the artist dies. On the other hand, an untimely death may well frustrate the collectors’ hopes of owning artwork that will, as the artist’s career progresses, become generally known and appreciated. By frustrating expected future name recognition, death impacts negatively on art prices. In conjunction, these two channels of influence give rise to a hump-shaped relationship between age at death and death-induced price changes. Using transactions from fine art auctions, we show that the empirically identified death effects indeed conform to our theoretical predictions. We derive our results from hedonic art price regressions, making use of a data set which exceeds the sample size of traditional studies in cultural economics by an order of magnitude.art price formation, death effect, durable goods monopoly

Commercial Culture, Political Culture and the Political Economy of Trade Policy: The Case of Japan

In this paper we present a model of endogenous trade-policy formation which captures crucial aspects of the Japanese commercial and political culture. We analyze the influence of the portrayed cultural traits and show that cultural idiosyncrasies are important determinants of trade policy formation; especially the complex interaction of the two types of cultures is shown to have significant consequence for the policy outcome. Contrasting our model's behavior with the stylized facts of Japanese politics, we arrive at the conclusion that the model's behavior is compatible with the observed (trade) policy positions held by Japanese politicians over the last fifty years.

Life Cycle and Cohort Productivity in Economic Research: The Case of Germany

We examine the research productivity of German academic economists over their life cycles. It turns out that the career-patterns of research productivity as measured by journal publications are characterized by marked cohort effects. Moreover, the life-cycles of younger German economists are hump-shaped and closely resemble the life cycles identified for U.S. economists, whereas the life-cycles of older German economists are much flatter. Finally, we find that not only productivity, but also research quality follows distinct life cycles. Our study employs econometric techniques that are likely to produce estimates that are more trustworthy than previous estimates.research productivity, life cycles, cohort effects

Risk-Aversion and Social Mobility: The Impossibility of Order-Preserving Income Redistributions

The traditional criticism notwithstanding, we show that social mobility can, in principle, explain political income redistributions. Nonetheless, the social-mobility argument for redistribution is not satisfactory, as actual transition probabilities are not consistent with order-preserving redistributions.Political economy, social mobility, income redistribution

Do Civil and Political Repression Really Boost Foreign Direct Investments?

Multinational enterprises are often accused to have a preference for investing in countries in which the working populations' civil and political rights are largely disregarded. This paper presents an empirical investigation of the popular "political repression boosts FDI" hypothesis and arrives at the conclusion that the hypothesis is not supported. On the contrary, multinational enterprises rather appear to be attracted by countries in which civil and political freedom is respected. Our finding thus supports the notion that there is a positive relationship between democracy and economic growth.Foreign direct investment, globalization, globalisation, democracy, freedom