Groupe d’Analyse et de Théorie Economique - UMR5824

2022

Measuring Beliefs and Ambiguity Attitudes Towards Discrete Sources of Uncertainty

Yao Thibaut Kpegli, Maria Alejandra Erazo Diaz, Working paper GATE 2022-12
This paper proposes a new method to measure beliefs and ambiguity attitudes towards events that are not necessarily equally likely and belong to a discrete set (i.e., discrete sources of uncertainty). Our method increases robustness to misspecification and allows flexibility in parametric choices compared to previous methods. We implement our method experimentally to both equal and different sources of uncertainty in two contexts : trust and coordination games. We find two main results. First, for equal sources of uncertainty, our method successfully reveals that subjects have context-independent beliefs on events, but context-dependent utility and weighting functions. This result indicates that comparing different sources of uncertainty requires a complete measurement of the utility and weighting functions. Second, different sources of uncertainty where the events are not equally likely lead to an increase in likelihood insensitivity, which indicates that the beliefs formation process of unknown events is cognitively demanding.

Measuring strategic-uncertainty attitudes

Lisa Bruttel, Muhammed Bulutay, Camille Cornand, Frank Heinemann, Adam Zylbersztejn, Working paper GATE 2022-11
Strategic uncertainty is the uncertainty that players face with respect to the purposeful behavior of other players in an interactive decision situation. Our paper develops a new method for measuring strategic-uncertainty attitudes and distinguishing them from risk and ambiguity attitudes. We vary the source of uncertainty (whether strategic or not) across conditions in a ceteris paribus manner. We elicit certainty equivalents of participating in two strategic 2x2 games (a stag-hunt and a market-entry game) as well as certainty equivalents of related lotteries that yield the same possible payoffs with exogenously given probabilities (risk) and lotteries with unknown probabilities (ambiguity). We provide a structural model of uncertainty attitudes that allows us to measure a preference for or an aversion against the source of uncertainty, as well as optimism or pessimism regarding the desired outcome. We document systematic attitudes towards strategic uncertainty that vary across contexts. Under strategic complementarity [substitutability], the majority of participants tend to be pessimistic [optimistic] regarding the desired outcome. However, preferences for the source of uncertainty are distributed around zero.

Explaining Income and Wealth Inequality over the Long Run : The Case of France

Stéphane Auray, Aurélien Eyquem, Bertrand Garbinti, Jonathan Goupille-Lebret, Working paper GATE 2022-10
We build an original heterogeneous-agent model with three assets (deposits, housing and equity), labor-income risk, entrepreneurs, and a rich and realistic set of flat and progressive taxes and transfers. Using France as an illustration, the model fits the level and dynamics of wealth and income inequalities, the aggregate and distributional tax structure, the composition of wealth along the distribution as well as key macroeconomic aggregates over the 1984-2018 period. Rising markups account for the bulk of rising income inequality. Wealth inequality dynamics result mostly from changes in saving rate inequality but only in response to the exogenous changes in taxation and markups. Our results point to the critical importance of endogenous saving decisions in response to exogenous shocks as a key driver of wealth inequality.

Predistribution vs. Redistribution:Evidence from France and the U.S.

Antoine Bozio, Bertrand Garbinti, Jonathan Goupille-Lebret, Malka Guillot, Thomas Piketty, Working paper GATE 2022-09
We construct series of post-tax income for France over the 1900-2018 period and compare them with U.S. series. We quantify the extent of redistribution and estimate the impact of redistribution vs pretax inequality on post-tax inequality. We obtain three major findings. First, redistribution has increased in both countries to reach similar levels today. Second, the long-run decline in post-tax inequality in France is due mostly to the fall in pretax inequality. Third, the relative lower post-tax inequality in France is entirely explained by differences in pretax inequality. This suggests that more attention should be paid to policies affecting pretax inequality.

Monetary/Fiscal Policy Mix And The Size Of Government Spending Multiplier

Rym Aloui, Working paper GATE 2022-08
This paper analyzes the size of government spending multiplier in two policy mix cases : Active Monetary/Passive Fiscal policy (regime M) in the first instance and Passive Monetary/Active Fiscal policy (regime F), in the sense of Leeper (1991), in the second. I develop a New-Keynesian model where preferences are subject to external deep habits and where some households do not have access to financial markets. I show that these two specifications allow for the crowding in of private consumption in both regimes. However, the private investment falls in regime M while it rises in regime F as a response to a government spending shock. In addition, I show that the impact multiplier increases with the degree of deep habits in regime M, while it decreases in regime F. In this framework, in a low nominal interest rate environment, the government spending multiplier is not too large as vast studies show. However, I find that the global effectiveness of government spending is larger in regime F than in regime M, even though the impact multiplier is greater than unity in both regimes.

Rational housing demand bubble

Lise Clain-Chamosset-Yvrard, Xavier Raurich, Thomas Seegmuller, Working paper GATE 2022-07
We provide a unified framework with demand for housing over the life cycle and financial frictions to analyze the existence and macroeconomic effects of rational housing bubbles. We distinguish a housing price bubble, defined as the difference between the housing market price and its fundamental value, from a housing demand bubble, which corresponds to a situation where a pure speculative housing demand exists. In an overlapping generation exchange economy, we show that no housing price bubble occurs. However, a housing demand bubble may occur, generating a boom in housing prices and a drop in the interest rate, when households face a binding borrowing constraint. Multiplicity of steady states and endogenous fluctuations can occur when credit market imperfections are moderate. These fluctuations involve transitions between equilibria with and without a housing demand bubble that generate large fluctuations in housing prices consistent with observed patterns. We finally extend the basic framework to a production economy and we show that a housing demand bubble increases the housing price, housing price to income ratio and economic growth.

Municipalities’ budgetary response to natural disasters

Carla Morvan, Working paper GATE 2022-06
The objective of this study is to analyze the causal impact of natural disasters on municipal budget choices, using a original database that allows us to study a sample of several thousand municipalities, 22,972 of which were affected by a natural disaster between 2000 and 2019. This quasi-experimental setting allows us to use panel regression models to estimate municipalities’ responses to a shock and with respect to their prevention strategies. We find evidence of increased spending for about 10 years after the disaster, together with increased in revenues and debt. Furthermore, it appears that prevention allows municipalities to effectively mitigate the effect of the disaster in terms of public spending, as municipalities with a natural hazard prevention plan in place did not increase their spending and their debt in the long run.

State-Contingent Forward Guidance

Julien Albertini, Valentin Jouvanceau, Stéphane Moyen, Working paper GATE 2022-05
This paper proposes a new strategy for modeling and solving state-dependent forward guidance policies (SCFG). We study its transmission channels using a DSGE model with search and matching frictions in which agents account for the fact that the SCFG is an endogenous regime-switching system. A fully credible SCFG causes a boom in inflation and output but no rapid exit from the ZLB. Thus, the transmission of its effects is primarily through the realization of additional ZLB periods more than through changes in expectations. We next consider the implications of imperfect credibility. In this case of uncertainty, an SCFG is less impactful. Finally, using counterfactual experiments on the December 2012 FOMC statement, we find that it led to about 1.5 pp gain in unemployment and 0.5 pp in inflation.

Short-time work policies during the COVID-19 pandemic

Julien Albertini, Xavier Fairise, Arthur Poirier, Anthony Terriau, Working paper GATE 2022-04
In this paper, we analyze the impact of short-time work programs on the French labor market during the COVID-19 pandemic. We develop a dynamic model with incomplete markets, search frictions, human capital, and aggregate and idiosyncratic productivity shocks. We calibrate our model and simulate what the labor market response to a lockdown shock would have been under various STW programs. We show that STW succeeded in stabilizing employment and consumption but generated substantial windfall effects characterized by an excessive reduction in hours worked.

Guilt Aversion in (New) Games : Does Partners’ Vulnerability Matter ?

Giuseppe Attanasi, Claire Rimbaud, Marie Claire Villeval, Working paper GATE 2022-03
We investigate whether a player’s guilt aversion is modulated by the co-players’ vulnerability or whether it is only activated by the willingness to avoid disappointing them. We also explore whether the nature of vulnerability (ex-post vs. ex-ante) matters. Ex-post vulnerability arises when a player’s material payoff depends on another player’s action (e.g., recipients in a dictator games). Ex-ante vulnerability arises when her initial endowment can be entrusted to another player (e.g., trustors in trust games). Treatments vary whether trustees can condition their decision on the belief of another player who is ex-post and/or ex-ante vulnerable. We find that trustees’ guilt aversion is insensitive to the nature of the co-player’s vulnerability and to the role of the co-player. Guilt is activated even absent vulnerability of co-players. It is mainly triggered by the willingness to respond to others’ expectations, regardless of their responsibility or the kindness of their intentions.

Don’t reduce Amartya Sen to a single identity !

Antoinette Baujard, Working paper GATE 2022-02
This paper reviews Amartya’s Sen autobiography, Home in the World. A Memoir (Penguin Press, published 08/07/2021, 480 pages.ISBN : 9781846144868), focused on his thirty first years of life. I show that the book emphasizes how Sen values discussions and reason, the voice of each human being in their plurality, and their capacity to act in and on the world. I also support that, in this memoir, Sen succeeds in circumventing the standard misunderstandings of his major contributions, by taking seriously the different potential interpretations of the thinkers who influenced his line of thinking, and defending the one he considers valid. I illustrate this claim with five cases which, by highlighting his multiple identities, avoid associating Sen to a misguided tag.

Not-so-strategic Voters

Antoinette Baujard, Isabelle Lebon, Working paper GATE 2022-01
An experiment carried out in situ during the 2017 French presidential election provides the natural conditions in which to disentangle the motivations of expressive voting and strategic voting as determinants of voters’ choice. Under the two-round plurality rule, when voters vote for a single candidate in the first round, they may wish primarily to express which is their favorite candidate, or, rather, to influence the outcome of the second-round outcome by strategic voting. These two motives may coincide or conflict. We show that insincere strategic voting is relatively low in this context since it represents less than 7% of the votes cast. When the expressive and the strategic motives conflict with each other, i.e., where expression requires giving up any influence on the outcome of the election, we show that voters are twice as likely to eschew strategic voting as to vote strategically.

2021

Inter-municipal Cooperation and the provision of local public goods : Economies of scale, fiscal competition or ”zoo” effect ?

Sonia Paty, Morgan Ubeda, Working paper GATE 2021-21
Inter-municipal communities are supposed to provide local public services more efficiently by exploiting economies of scale and reducing spillover effects among cooperating municipalities. In a diff-in-diff setting that exploits the staggered adoption of cooperation in France, we explore the impact of inter-municipal cooperation on both local public spending and revenues. We first find a sizable increase in local public spending which was not driven by wage bill expansion. Second, by using the decomposition of spending by function, we show that this increase was driven by urbanism policies. Third, we show that a quarter of this effect can be explained by the transfer of two policies : public transit and garbage collection. Overall, we conclude that scale economies, if existent, were clearly dominated by a ”zoo” effect, i.e. the provision of new public services in small and former isolated municipalities.

The Way People Lie in Markets : Detectable vs. Deniable Lies

Chloe Tergiman, Marie Claire Villeval, Working paper GATE 2021-20
In a finitely repeated game with asymmetric information, we experimentally study how individuals adapt the nature of their lies when settings allow for reputation-building. While some lies can be detected ex post by the uninformed party, others remain deniable. We find that traditional market mechanisms such as reputation generate strong changes in the way people lie and lead to strategies in which individuals can maintain plausible deniability : people simply hide their lies better by substituting deniable lies for detectable lies. Our results highlight the limitations of reputation to root out fraud when a Deniable Lie strategy is available.

The impact of rent control : investigations on historical data in the city of Lyon

Loïc Bonneval, Florence Goffette-Nagot, Zhejin Zhao, Working paper GATE 2021-19
This paper reexamines the debated issue of the effects of rent control policy on the rental market. We investigate the impact on rents of three different forms of rent regulation in Lyon over a 78-years period. We use an original historical dataset which allows us to track regulation changes, rent paid and tenant moves for a long-run panel of flats. Using a difference-in-differences method, we estimate the impact of regulation on rents depending on the type of rent control over different economic periods. Our results show that the impact of rent control deepened over time. Starting with a 11% reduction in rents between 1914 and 1929, it reached a decrease by 47% in the regulated rental market in the 1949-1968 period. We do not find any increase in rents in the unregulated segment of the rental market, which could be a result of a reduction in housing investment in the long run.

Central bank’s stabilization and communication policies when firms have motivated overconfidence in their own information accuracy or processing

Camille Cornand, Rodolphe Dos Santos Ferreira, Working paper GATE 2021-18
Using a simple microfounded macroeconomic model with price making firms and a central bank maximizing the welfare of a representative household, it is shown that the presence of firms’ motivated beliefs has stark consequences for the conduct of optimal communication and stabilization policies. Under pure communication (resp. communication and stabilization policies), motivated beliefs about own private information (resp. own ability to process information) reverse the bang-bang solution of transparency (resp. opacity with full stabilization) found in the literature under objective beliefs and lead to intermediate levels of communication (and stabilization).

Risk-Taking and Tail Events Across Trading Institutions

Brice Corgnet, Camille Cornand, Nobuyuki Hanaki, Working paper GATE 2021-17
We study the reaction of investors to tail events across trading institutions. We conduct experiments in which investors bid on a financial asset that delivers a small positive reward in more than 99% of the cases and a large loss otherwise. The baseline treatment uses a repeated BDM mechanism whereas the market treatment replaces the uniform draw of the BDM mechanism by a uniform draw over the bids of the other participants. Our design is such that bids should not differ across treatments in normal times while allowing for potential differences to emerge after tail events have occurred. We find that markets tend to exacerbate the reaction of investors to tail losses and we attribute this effect to emotions.

Information frictions in inflation expectations among five types of economic agents

Camille Cornand, Paul Hubert, Working paper GATE 2021-16
We compare disagreement in expectations and the frequency of forecast revisions among five categories of agents : households, firms, professional forecasters, policymakers and participants to laboratory experiments. We provide evidence of disagreement among all categories of agents. There is however a strong heterogeneity across categories : while policymakers and professional forecasters exhibit low disagreement, firms and households show strong disagreement. This translates into a heterogeneous frequency of forecast revision across categories of agents, with policymakers revising more frequently their forecasts than firms and professional forecasters. Households last revise less frequently. We are also able to explore the external validity of experimental expectations.

Marginalism, Egalitarianism and Efficiency in Multi-Choice Games

David Lowing, Kevin Techer, Working paper GATE 2021-15
The search for a compromise between marginalism and egalitarianism has given rise to many discussions. In the context of cooperative games, this compromise can be understood as a trade-off between the Shapley value and the Equal division value. We investigate this compromise in the context of multi-choice games in which players have several activity levels. To do so, we propose new extensions of the Shapley value and of the Weighted Division values to multi-choice games. Contrary to the existing solution concepts for multi-choice games, each one of these values satisfies a core condition introduced by Grabisch and Xie (2007), namely Multi-Efficiency. We compromise between marginalism and egalitarianism by introducing the multi-choice Egalitarian Shapley values, computed as the convex combination of our extensions. To conduct this study, we introduce new axioms for multi-choice games. This allows us to provide an axiomatic foundation for each of these values.

Avoiding the Cost of your Conscience : Belief Dependent Preferences and Information Acquisition

Claire Rimbaud, Alice Soldà, Working paper GATE 2021-14
Pro-social individuals face a trade-off between their monetary and moral motives. Hence, they may be tempted to exploit the uncertainty in their decision environment in order to reconcile this trade-off. In this paper, we investigate whether individuals with belief-dependent preferences avoid the monetary cost of behaving according to their moral standards by strategically acquiring information about others’expectations. We test the predictions of an information acquisition model in an online experiment. We use a modified trust-game in which we introduce uncertainty about the second movers’ beliefs about first-movers’ expectations. Our design enables to (i) identify participants with belief-based preferences and (ii) investigate their information acquisition strategy.Consistent with our predictions of subjective preferences, we find that most individuals classified as belief-dependent strategically select their source of information to avoid the cost of their conscience.

A review of Adler’s "Measuring social Welfare"

Antoinette Baujard, Working paper GATE 2021-13
This paper is a book review of Matthew Adler’s bool "Measuring Social Welfare : An Introduction", published at OUP in 2019. The book is an introduction to the social welfare function approach, meant to assess social welfare and help public decision making, as a comprehensive and welcome alternative to cost-benefit analysis. The review first provides a number of references to situate the contribution of the book in the literature. Secondly, it insists on the fact that the social welfare approach is able to express transparently normative criteria, by contrast with CBA. Thirdly, it highlights that, after the focus on efficiency, the book well illustrates how to incorporate wider distributive criteria ; it also enables to encompass different kinds of public policies beyond fiscal redistribution. Fourthly, it regrets that the book does not yet illustrate how to cope with the diversity of values and relevant information beyond utility and income, however introduced as theoretically possible.

Values in Welfare economics

Antoinette Baujard, Working paper GATE 2021-12
This chapter focuses on the inner rationale and consequences of four different archetypal positions regarding how ethical and political values are tackled in welfare economics. Welfare economics is standardly associated with the welfarist framework, for which social welfare is based on individual utility only. Beyond this, we distinguish the value-neutrality claim – for which ethical values should be and are out of the scope of welfare economics –, the value confinement ideal – for which ethical values are acceptable if they are minimal and consensual–, the transparency requirement – for which any ethical values may be acceptable in the welfare economics framework if explicit and formalized –, and the entanglement claim – which challenges the very possibility of demarcation between facts and values.

Artificial Intelligence, Ethics, and Diffused Pivotality

Victor Klockmann, Alicia von Schenk, Marie Claire Villeval, Working paper GATE 2021-11
With Big Data, decisions made by machine learning algorithms depend on training data generated by many individuals. In an experiment, we identify the effect of varying individual responsibility for the moral choices of an artificially intelligent algorithm. Across treatments, we manipulated the sources of training data and thus the impact of each individual’s decisions on the algorithm. Diffusing such individual pivotality for algorithmic choices increased the share of selfish decisions and weakened revealed prosocial preferences. This does not result from a change in the structure of incentives. Rather, our results show that Big Data offers an excuse for selfish behavior through lower responsibility for one’s and others’ fate.

Artificial Intelligence, Ethics, and Intergenerational Responsibility

Victor Klockmann, Alicia von Schenk, Marie Claire Villeval, Working paper GATE 2021-10
In more and more situations, artificially intelligent algorithms have to model humans’ (social) preferences on whose behalf they increasingly make decisions. They can learn these preferences through the repeated observation of human behavior in social encounters. In such a context, do individuals adjust the selfishness or prosociality of their behavior when it is common knowledge that their actions produce various externalities through the training of an algorithm ? In an online experiment, we let participants’ choices in dictator games train an algorithm. Thereby, they create an externality on future decision making of an intelligent system that affects future participants. We show that individuals who are aware of the consequences of their training on the payoffs of a future generation behave more prosocially, but only when they bear the risk of being harmed themselves by future algorithmic choices. In that case, the externality of artificially intelligence training induces a significantly higher share of egalitarian decisions in the present.

Risk taking with unethical money : An experimental study

Sorravich Kingsuwankul, Marie Claire Villeval, Working paper GATE 2021-09
The previous literature has shown that people use money differently according to whether it has been earned through personal effort or by being lucky. Since sometimes money is also earned through unethical means, we investigate whether dishonestly earned money is treated more as a windfall income or as the result of costly effort, which could be the case if dishonestly earned money came at a psychological cost. We conducted an online experiment to test whether people make different decisions under the risk of losing an endowment, depending on whether this endowment was previously earned through a moral choice, effort or randomness. We found that in the context of risk taking, individuals treat dishonestly earned money more like a windfall gain from luck than an effort-based income. The increase in risk taking with dishonestly earned money is especially prevalent among risk averse individuals.

Automation, Offshoring and Employment Distribution in Western Europe

Jocelyn Maillard, Working paper GATE 2021-08
This paper investigates the effects of automation and offshoring on the dynamics of the occupational distribution of employment with a focus on Western Europe between 2000 and 2016. I use a general equilibrium model with three regions, three types of workers, ICT capital, trade in final goods and endogenous offshoring. Fed with exogenous measures of ICT-capital prices and trade costs, the model replicates key features of the data. It matches the observed dynamics of offshoring to Eastern Europe and Asian countries. It also reproduces accurately the observed polarization of the labor market : abstract and manual labor increase while routine labor falls. A counterfactual experiment reveals that automation is the main driver of polarization. Since it is also the only factor that drives individuals to become abstract (high-skill) workers, it is welfare enhancing. The effects of falling trade costs on labor polarization are smaller, but imply welfare gains.

Homophily, Peer Effects, and Dishonesty

Liza Charroin, Bernard Fortin, Marie Claire Villeval, Working paper GATE 2021-07
If individuals tend to behave like their peers, is it because of conformity, that is, the preference of people to align behavior with the behavior of their peers ; homophily, that is, the tendency of people to bond with similar others ; or both ? We address this question in the context of an ethical dilemma. Using a peer effect model allowing for homophily, we designed a real-effort laboratory experiment in which individuals could misreport their performance to earn more. Our results reveal a preference for conformity and for homophily in the selection of peers, but only among participants who were cheating in isolation. The size of peer effects is similar when identical peers were randomly assigned and when they were selected by individuals. We thus jointly reject the presence of a self-selection bias in the peer effect estimates and of a link strength effect.

Allocation Rules for Multi-choice Games with a Permission Tree Structure

David Lowing, Working paper GATE 2021-06
We consider multi-choice cooperative games with a permission tree structure. Multi-choice games are a generalization of a cooperative transferable utility games in which each player has several activity levels. In addition, a permission tree structure models a situation in which a player needs permission from another player to cooperate. In this framework, the influence of a permission structure on the possibility of cooperation may have several interpretations depending on the context. In this paper, we investigate several of these interpretations and introduce for each of them a new allocation rule that we axiomatically characterize.

Does the formal home care provided to old-adults persons affect utilisation of support services by informal carers ? An analysis of the French CARE and the U.S. NHATS/NSOC surveys

Wilfried Guets, Working paper GATE 2021-05
The role of informal carers in long-term care sheds light on the struggle related to population ageing and the increasing incidence of chronic disease. However, despite the increasing number of informal carers, most of them experienced the burden of caregiving. Since various policies have been implemented across countries to support informal carers, their attitude toward support services should be addressed. This research consisted of investigating how formal home care affected the utilisation of support services by informal carers. Data used stemmed from the 2015 Survey Capacité Aide et Ressources des Seniors (“CARE ménage”) collected in France ; and the National Health and Aging Trends Survey (NHATS) with the National Survey of Caregiving (NSOC) in the United States of America (U.S.). Andersen’s health behavioural model of support services utilisation provided a conceptual framework for investigating predisposing, enabling, and need variables associated with informal carers services use. We used a probit model for econometrics modelling. We also checked for the endogeneity of formal care. A sample of N = 4,866 in France and N = 1,060 in the U.S. informal carers and care recipients’ dyads were used in the study. In France, the care recipients’ formal care utilisation does not influence the carer support service use. Comparatively, in the United States, formal care significantly increases the respite services utilisation by informal carers. This study provides important implications for Long-Term Care (TLC) dedicated to health policy, for an optimal trade-off between informal and formal care use, bearing in mind health system specificities. First, countries may spend more funds in innovative support programs in access to care, because some carers may have difficulties in accessing and using support services. Secondly, to provide and foster information campaigns to raise awareness concerning the utilisation of various existing health services, to improve social welfare.

Empirical research on ethical preferences : how popular is prioritarianism ?

Erik Schokkaert, Benoît Tarroux, Working paper GATE 2021-04
We survey the empirical literature on ethical preferences, covering both survey studies and incentivized laboratory experiments. Crucial axioms such as the Pigou-Dalton transfer principle are not accepted by a large fraction of the subjects. Moreover, in formulating their distributive preferences subjects attach much importance to the sources of income differences. Their preferences behind a veil of ignorance do not coincide with their preferences in the position of a social planner. These results suggest that prioritarian policy proposals will not necessarily be supported by a majority of the population. Although the majority opinion does not necessarily reflect the ethically desirable perspective, the empirical results still raise some interesting normative challenges.

The T-periodic choice with limited loyalty

Muhammad Mahajne, Working paper GATE 2021-03
We study a decision-maker who selects, in every fixed period of time, T times from every collection of feasible alternatives, where T is pre-determined by him. We axiomatize the class of T-choice functions according to which the decision-maker has fixed preference relation along the same period but has limited loyalty. The decision-maker selects, deterministically, in a way such that the higher an alternative is ranked by his preference relation the higher it is selected in his T choices.

Pairwise consensus and Borda rule

Muhammad Mahajne, Oscar Volij, Working paper GATE 2021-02
We say that a preference profile exhibits pairwise consensus around some fixed preference relation, if whenever a preference relation is closer to it than another one, the distance of the profile to the former is not greater than its distance to the latter. We say that a social choice rule satisfies the pairwise consensus property if it selects the top ranked alternative in the preference relation around which there is such a consensus. We show that the Borda rule is the unique scoring rule that satisfies this property.

The Distinct Impact of Information and Incentives on Cheating

Julien Benistant, Fabio Galeotti, Marie Claire Villeval, Working paper GATE 2021-01
We study a dynamic variant of the die-under-the-cup task where players can repeatedly misreport the outcomes of consecutive die rolls to earn more money, either under a noncompetitive piece rate scheme or in a two-player competitive tournament. In this dynamic setting we test (i) whether giving continuous feedback (vs. final ex post feedback) on the opponent’s reported outcome to both players encourages cheating behavior, and (ii) to what extent this influence depends on the incentive scheme in use (piece rate vs. tournament). We also vary whether the opponent is able to cheat or not. We find that people lie more when placed in a competitive rather than a non-competitive setting, but only if both players can cheat in the tournament. Continuous feedback on the counterpart’s reports increases cheating under the piece-rate scheme but not in a competitive setting. Our results provide new insights on the role that feedback plays on cheating behavior in dynamic settings under different payment schemes, and shed liht on the origins of the effect of competition on dishonesty.

2020

Fraud Deterrence Institutions Reduce Intrinsic Honesty

Fabio Galeottia, Valeria Maggian, Marie Claire Villeval, Working paper GATE 2020-39
Deterrence institutions are widely used in modern societies to discourage rule violations but whether they have an impact beyond their immediate scope of application is usually ignored. Using a quasi-experiment, we found evidence of spillover effects across contexts. We identified fraudsters and non-fraudsters on public transport who were or not exposed to ticket inspections by the transport company. We then measured the intrinsic honesty of the same persons in a new, unrelated context where they could misappropriate money. Instead of having an expected educative effect across contexts, the exposure to deterrence practices increased unethical behavior of fraudsters but also, strikingly, of non-fraudsters, especially when inspection teams were larger. Learning about the prevailing norm is the most likely channel of this spillover effect.

Local Amenities, Commuting Costs and Income Disparities Within Cities

Morgan Ubeda, Working paper GATE 2020-38
This paper studies the effect of transportation networks on spatial inequalities and redistribution within metropolitan areas. To do so, I build and calibrate a spatial equilibrium model of a city that features non-homotheticities and worker heterogeneity, allowing to capture rich patterns of workers sorting on commute costs and amenities. I then calibrate the model to the Paris urban area and use counterfactual simulations to study the effects of a) the Regional Express Rail and b) restricting car use in the city center. I find that on top of having a strong contribution to suburbanization and reducing welfare inequalities, the public transport network reduced income segregation in the area. Turning to the prospective effects of banning cars in the city center, the model predicts a reduction of the income disparities between Paris and its suburbs, at the cost of a substantial welfare loss.

Productive Workfare ? Evidence from Ethiopia’s Productive Safety Net Program

Jules Gazeaud, Victor Stephane, Working paper GATE 2020-37
Despite the popularity of public works programs in developing countries, there is virtually no evidence on the value of the infrastructure they generate. This paper attempts to start filling this gap in the context of the PSNP – a largescale program implemented in Ethiopia since 2005. Under the program, millions of beneficiaries received social transfers conditional on their participation in activities such as land improvements and soil and water conservation measures. We examine the value of these activities using a satellite-based indicator of agricultural productivity and (reweighted) difference-in-differences estimates. Results show that the program is associated with limited changes in agricultural productivity. The upper bound of the main estimate is equivalent to a 3.6 percent increase in agricultural productivity. This contrasts with existing narratives and calls for more research on the productive effects of public works.

The impact of EITC on education, labor market trajectories, and inequalities

Julien Albertini, Arthur Poirier, Anthony Terriau, Working paper GATE 2020-36
As a complement to the federal EITC, some states offer their own EITC, typically calculated as a percentage of the federal EITC. In this paper, we analyze the effect of state EITC on education using policy discontinuities at U.S. state borders. Our estimates reveal that an increase in state EITC leads to a statistically significant drop in high school completion. We then use a life-cycle matching model with directed search and endogenous educational choices, search intensities, hirings, hours worked, and separations to investigate the effects of EITC on the labor market in the long run and along the transitional dynamics. We show that a tax credit targeted at low-wage (and low-skilled) workers reduces the relative return to schooling, thereby generating a powerful disincentive to pursue long-term studies. In the long run, this results in an increase in the proportion of low-skilled workers in the economy, which may have important implications in terms of employment, productivity, and income inequalities.

A General and Efficient Method for Solving Regime-Switching DSGE Models

Julien Albertini, Stéphane Moyen, Working paper GATE 2020-35
This paper provides a general representation of endogenous and threshold-based regime switching models and develops an efficient numerical solution method. The regime-switching is triggered endogenously when some variables cross threshold conditions that can themselves be regime-dependent. We illustrate our approach using a RBC model with state-dependent government spending policies. It is shown that regime-switching models involve strong non linearities and discontinuities in the dynamics of the model. However, our numerical solution based on simulation and projection methods with regime-dependent policy rules is accurate, and fast enough, to efficiently take into all these challenging aspects. Several alternative specifications to the model and the method are studied.

All at Once ! A Comprehensive and Tractable Semi-Parametric Method to Elicit Prospect Theory Components

Yao Thibaut Kpegli, Brice Corgnet, Adam Zylbersztejn, Working paper GATE 2020-34
Eliciting all the components of prospect theory –curvature of the utility function, weighting function and loss aversion– remains an open empirical challenge. We develop a semi-parametric method that keeps the tractability of parametric methods while providing more precise estimates. Using the data of Tversky and Kahneman (1992), we revisit their main parametric results. We reject the convexity of the utility function in the loss domain, find lower probability weighting, and confirm loss aversion. We also report that the probability weighting function does not exhibit duality and equality across domains, in line with cumulative prospect theory and in contrast with original prospect and rank dependent utility theories.

The effect of group identity on hiring decisions with incomplete information

Fortuna Casoria, Ernesto Reuben, Christina Rott, Working paper GATE 2020-33
We investigate the effects of group identity on hiring decisions with adverse selection problems. We run a laboratory experiment in which employers cannot observe a worker’s ability nor verify the veracity of the ability the worker claims to have. We evaluate whether sharing an identity results in employers discriminating in favor of ingroup workers, and whether it helps workers and employers overcome the adverse selection problem. We induce identities using the minimal group paradigm and study two settings : one where workers cannot change their identity and one where they can. Although sharing a common identity does not make the worker’s claims more honest, employers strongly discriminate in favor of ingroup workers when identities are fixed. Discrimination cannot be explained by employers’ beliefs and hence seems to be taste-based. When possible, few workers change their identity. However, the mere possibility of changing identities erodes the employers’ trust towards ingroup workers and eliminates discrimination.

Evaluation of the effectiveness of technological platforms as a technology transfer tool : the impact of French Technological Research Institutes on the socio-economic performance of SMEs

Ruben Fotso, Working paper GATE 2020-32
This objective of this paper is to evaluate and examine the impact of technological platforms used as technology transfer tools on the financial and employment variables of SMEs. To do so, it considers the French Technological Research Institute (TRI) known as “Nanoelec”, which is an interdisciplinary thematic institute which uses technological platforms to accelerate the transfer of innovation in companies. Using a matched difference-in-difference approach with the individual effects on panel data observed over the 2008–2016 period, empirical analysis shows that the TRI had a homogenous and significant effect on equity but no effect on employment variables. When cross-referenced against the length of participation in the TRI however, more heterogenous results emerged, showing that the TRI had an additional effect on all financial variables (turnover, equity and financial autonomy) and that this effect appears to concentrate on companies which have participated for longer (two to three years). Furthermore, the evaluation shows a clear positive effect on equity and financial autonomy among firms that collaborate with an Atomic Energy Commission (CEA) laboratory and a weak negative effect on net turnover for firms which receive “expertise” type treatment. Additional analysis indicates that the type of treatment has a more significant role to play than the length of involvement in the TRI.

Evaluation of indirect effects of place-based science-industry transfer policies : Case of French Technological Research Institutes

Ruben Fotso, Working paper GATE 2020-31
When it comes to evaluating the causal effect of public policies on corporate performance, most studies tend toexclusively focus on targeted (treated) firms as if they have no relationship to the rest of the economy. Yet, public policies are highly likely to indirectly influence non-targeted firms due to the relationships they have with the targeted firms. This paper aims to fill this gap by evaluating the indirect causal effect of a new French science-industry transfer policy on the financial and employment variables of non-targeted companies. To do so, it focuses on French Technological Research Institutes (TRIs) which are science-industry collaborations based on technological platforms that bring together SMEs, large companies, universities and public research bodies with the goal of accelerating the transfer of knowledge towards firms and generating spillovers inside and outside the scheme. Based on geographical economics literature, it can be assumed that indirect effects tend to be spatially concentrated. By comparing a local untreated company to a non-local untreated company, therefore, using a difference-in-differences method applied to panel data (2008-2016) and combined with a double matching at the department level (NUTS 3) and at the firm level, it can be seen that non-beneficiary companies, located in the treated French department significantly improve their financial performance (turnover, financial autonomy) compared to control companies located in the control departments. The dynamics of employment variables are a little more complex. A negative significant effect is observed on the proportion of managers at the beginning of treatment and a positive significant effect is noticed later at the end of the period of observation. Analysis of the dynamics of the effects indicates that performance does not improve immediately after the treatment but later in time.

Impacts of a French Urban Renewal Program on Local Housing Markets

Sylvain Chareyron, Florence Goffette-Nagot, Lucie Letrouit, Working paper GATE 2020-30
Urban renewal programs have been implemented in many countries to fight housing decay, poverty concentration, and associated social ills in the last decades. In this paper, we propose an evaluation of a large-scale urban renewal program launched in France in 2004. Using a novel estimator aimed at avoiding bias in the estimation of treatment effects heterogeneous across treatment groups or time periods, and complementing its results with a more precise double fixed effects difference-in-differences estimator, we find no significant effect of the program on housing values and transaction volume. However, we do find a significant impact on the social profile of housing buyers and sellers : an increased number of upward transitions of housing units, from blue-collar sellers to intermediate category buyers or from intermediate category sellers to executive buyers, and reduced housing transactions among executives. Altogether, our findings suggest a renewed interest of upper
socio-professional categories to invest or keep their property in the renovated neighborhoods.

Risks and optimal migration duration : The role of higher order risk attitudes

Siwar Khelifa, Working paper GATE 2020-29
Using a bivariate expected utility framework, we develop a two-period model where households determine, in the presence of risks, the parents’ migration duration when children are left behind. Our model suggests that the optimal migration duration may respond differently to an increase in a given risk. We provide conditions under which it is optimal for households to decrease the parents’ migration duration despite an income risk in the place of origin, and to increase it even though the income in the place of destination is risky. The idea of preference for "harm disaggregation" is used to explain the results. In the absence of uncertainty, we also show the role of the interaction between child human capital and wealth in the household’s utility function in determining the optimal migration duration of parents. Empirical implications of this analysis are presented in the last part of the paper.

Stable agreements through liability rules : a multi-choice games approach to the social cost problem

Kevin Techer, Working paper GATE 2020-28
We consider a class of social cost problems where one polluter interacts with an arbitrary number of potential victims. Agents are supposed to cooperate and negotiate an optimal pollution level together with monetary transfers. We examine multi-choice cooperative games associated with a social cost problem and an assignment (or mapping) of rights. We introduce a class of mappings of rights that takes into account the pollution intensity and we consider three properties on mappings of rights : core compatibility, Kaldor-Hicks core compatibility and no veto power for a victim. We demonstrate that there exist only two families of mappings of rights that satisfy core compatibility. However, no mapping of rights satisfies Kaldor-Hicks core compatibility and no veto power for a victim.

Revisiting the history of welfare economics

Roger E. Backhouse, Antoinette Baujard, Tamotsu Nishizawa, Working paper GATE 2020-27
Our forthcoming book, Welfare Theory, Public Action and Ethical Values challenges the belief that, until modern welfare economics introduced issues such as justice, freedom and equality, economists adopted what Amartya Sen called “welfarism.” This is the belief that the welfare of society depends solely on the ordinal utilities of the individuals making up the society. Containing chapters on some of the leading twentieth-century economists, including Walras, Marshall, Pigou, Pareto, Samuelson, Musgrave, Hicks, Arrow, Coase and Sen, as well as lesser-known figures, including Ruskin, Hobson and contributors to the literature on capabilities, the book argues that, whatever their theoretical commitments, when economists have considered practical problems they have adopted a wider range of ethical values, attaching weight to equality, justice and freedom. Part 1 explains the concepts of welfarism and non-welfarism and explores ways in which economists have departed from welfarism when tackling practical problems and public policy. Part 2 explores the reasons for this. When moving away from abstract theories to consider practical problems it is often hard not to take an ethical position and economists have often been willing to do so. We conclude that economics needs to recognise this and to become more of a moral science.

Normes et normativité en économie

Antoinette Baujard, Judith Favereau, Charles Girard, Working paper GATE 2020-26
Cette introduction insiste sur les difficultés et les enjeux de la distinction entre les approches positives et normatives des normes. La vie collective est organisée par des normes, mais qu’elles ordonnent les comportements dans les faits n’impliquent pas qu’elles soient désirables. Une stricte description des normes peut nécessiter de prendre en compte les questions éthiques, lesquelles peuvent être traduites à l’aide de la méthode axiomatique ; choisir les normes en revanche est une activité de nature fondamentalement normative, qui interroge la légitimité des décisions et des évaluations. La possibilité même de démarcation entre positif et normatif ne va pas de soi : en particulier en économie du bien-être, les approches standards qui visent à éviter les jugements de valeur (le welfarisme) ou à les isoler (l’axiomatique) peuvent s’avérer problématiques. Pour conclure, nous présentons les quatre articles du numéro qui illustrent les quatre étapes de cette réflexion sur la normativité.

Uncovering Illegal and Underground Economies : The Case of Mafia Extortion Racketeering

Lavinia Piemontese, Working paper GATE 2020-25
This paper proposes a new approach for quantifying the economic cost of hidden economies. I specifically apply the method to the case of mafia racketeering in Northern Italy, and in so doing, provide the first explicit estimate of the economic cost of mafia spread in this area. I show both theoretically and empirically that acts of extortion imposed on certain firms are linked to resource misallocation. I quantify the share of output that the mafia extorts from firms, which ranges between 0.5 and 5 percent of firm-level output for the taxed firms. I then consider what these estimates imply and find that between 2000 and 2012, the Northern Italian economy suffered an aggregate loss of approximately 2.5 billion Euros. Quite remarkably, only one-fourth of this cost consists of the aggregate transfer to the mafia. The remaining three-fourths corresponds to the contraction of production due to misallocation.

Some regrettable grading scale effects under different versions of evaluative voting

Antoinette Baujard, Herrade Igersheim, Isabelle Lebon, Working paper GATE 2020-24
Many voters seem to appreciate the greater freedom of expression afforded by alternative voting rules ; in evaluative voting, for example, longer grading scales and/or negative grades seem desirable in so far as, all other things being equal, they allow greater expressivity. The paper studies to what extent the behavior of voters, and the outcomes of elections, are sensitive to the grading scale employed in evaluative (or “range”) voting. To this end, we use voting data from an experiment conducted in parallel with the 2017 French presidential election, which aimed to scrutinize the negative grade effect and the length effect in grading scales. First, this paper confirms that the introduction of a negative grade disfavors “polarizing” candidates, those whose political discourse provokes divisive debate, but more generally we establish that it disfavors major candidates and favors minor candidates. Second, under non-negative scales, polarizing candidates may be relatively disfavored by longer scales, especially compared with candidates who attract only infrequent media coverage and who are little known among voters. Third, longer scales assign different weights to the votes of otherwise equal voters, depending on their propensity to vote strategically. Overall, we observe that the benefits of the expressivity provided by longer scales or negative grades need to be balanced against the controversial advantage these give to minor candidates, and their tendency to undermine the principle that each vote should count equally in the outcome of the election.

Retelling the Story of the 2017 French Presidential Election : The contribution of Approval Voting

Antoinette Baujard, Isabelle Lebon, Working paper GATE 2020-23
This paper proposes an alternative reading of the politics of the 2017 French presidential election, using an unstudied source of information on voters’ preferences : experimental data on approval voting. We provide a new narrative of the election process and outcome. The principal approach for understanding the political context has for many decades been a distinction between left and right-wing political forces. We introduce a method for generating an endogenous political axis, and construct three indices so that we might understand how and why the conventional approach has become progressively irrelevant. We find no gender effect, but instead an age effect. Voters, especially those who belong to generations at the beginning or the end of their working life, use their vote in national elections to support radical change ; and the younger the voters, the less they conform to a left-right axis. However, this desire for change does not represent a rejection of existing parties, as the official results would suggest. Rather, the approval results suggest an erosion in the voters’ minds of barriers between distinct political camps, and between traditional and populist parties.

Perceived Social Norm and Behavior Quickly Adjusted to Legal Changes During the COVID-19 Pandemic

Fortuna Casoria, Fabio Galeotti, Marie Claire Villeval, Working paper GATE 2020-22
In response to the pandemic of COVID-19 and in lack of pharmaceutical solutions, many countries have introduced social and physical distancing regulations to contain the transmission of the virus. These measures are effective insofar as they are able to quickly change people’s habits. This is achieved by changing the monetary incentives of rule violators but also by shifting people’s perception regarding the appropriateness of socialization. We studied the effect of introducing, and then lifting, distancing regulations on the perceived norm regarding social encounters. We conducted an online incentivized experiment in France where we elicited the same participants’ perceived norm and social distancing behavior every week for three months. We found that people shifted behavior and norm perception as soon as the government introduced or removed distancing measures. This effect was fast acting and long lasting. This is informative for future interventions, especially in light of a possible COVID-19 recurrence.

Hiding Behind the Veil of Ashes : Social Capital in the Wake of Natural Disasters

Victor Stéphane, Working paper GATE 2020-21
This paper investigates the impact of natural disasters on social capital. By heterogeneously affecting people in a community, natural disasters create a temporary information asymmetry on their post-disaster income. Using an original dataset collected in rural Ecuador, we provide suggestive evidence that households use this asymmetric information to pretend to be poorer than they actually are, in order to escape from solidarity mechanisms in the aftermath of the shock. The magnitude of this effect decreases with the level of wealth inequality in the community and vanishes in the most unequal communities where bilateral cooperation is rather fostered.

Forecasting Skills in Experimental Markets : Illusion or Reality ?

Brice Corgnet, Cary Deck, Mark DeSantis, David Porter, Working paper GATE 2020-20
Using experimental asset markets, we study the situation of a financial analyst who is trying to infer the fundamental value of an asset by observing the market’s history. We find that such capacity requires both standard cognitive skills (IQ) as well as social and emotional skills. However, forecasters with high emotional skills tend to perform worse when market mispricing is high as they tend to give too much emphasis to the noisy signals from market data. By contrast, forecasters with high social skills perform especially well in markets with high levels of mispricing in which their skills could help them detect possible manipulation attempts. Finally, males outperform females in the forecasting task after controlling for a large number of relevant individual characteristics such as risk attitudes, cognitive skills, emotional intelligence, and personality traits.

On the Internal and External Stability of Coalitions and Application to Group Purchasing Organizations

Dongshuang Hou, Aymeric Lardon, Hao Sun, Working paper GATE 2020-19
Two new notions of stability of coalitions, based on the idea of exclusion or integration of players depending on how they affect allocations, are introduced for cooperative transferable utility games. The first one, called internal stability, requires that no coalition member would find that her departure from the coalition would improve her allocation or those of all her partners. The second one, called external stability, requires that coalitions members do not wish to recruit a new partner willing to join the coalition, since her arrival would hurt some of them. As an application of these two notions, we study the stability of Group Purchasing Organizations using the Shapley value to allocate costs between buyers. Our main results suggest that, when all buyers are initially alone, while small buyers will form internally and externally stable Group Purchasing Organizations to benefit from the best price discount, big buyers will be mutually exclusive and may cooperate with only small buyers.

Evaluating the impact of public policies on large firms : a synthetic control approach to science industry transfer policies

Corinne Autant-Bernard, Ruben Fotso, Nadine Massard, Working paper GATE 2020-18
Large firms dominate R&D investment in most countries and receive the majority of public R&D funding. Due to methodological difficulties, however, evaluation of the effect of government-sponsored R&D programmes mainly focuses on small- and medium-sized enterprises. The scarcity of large firms and their heterogeneity hampers the ability to find proper counterfactuals for very large companies and makes it difficult to use proper inference methods to measure the impact of a specific policy. In order to address these methodological issues, we propose using the synthetic control method, initially developed by Abadie et al. (2010) to evaluate programmes on a regional scale. We apply this method to evaluate the impact of a new French science-industry transfer initiative and compare the results with the random trend model and more standard counterfactual approaches. Based on data covering a long pre-treatment period (1998–2011) and ongoing treatment period (2012–2015), we reveal a convergence between the results obtained with the synthetic control method and the random trend model, and demonstrate that traditional counterfactual evaluation methods are not appropriate for large firms. Moreover, the synthetic control method has the advantage of providing an individual assessment of the policy impact on each firm. In the specific case of the French science-industry transfer initiative, it reveals that the impact on private R&D is highly heterogenous both on RD inputs and cooperation behaviours. Beyond this specific transfer policy, this study suggests that the synthetic control method opens new research perspectives in policy impact evaluation at the firm level.

Slowdown antitrust investigations by decentralization

Emilie Dargaud, Armel Jacques, Working paper GATE 2020-17
When multi-product firms make simultaneous price-fixing agreements in different markets, the introduction of leniency programs may induce firms to compartmentalize their activities. Doing so results in slowdown antitrust investigations and decentralized firm can easily request leniency for a second cartel after the detection of an other. We study how variation of fine reduction may produce procompetitive but also procollusive effects.

Tail events, emotions and risk taking

Brice Corgnet, Camille Cornand, Nobuyuki Hanaki, Working paper GATE 2020-16
Recent works have shown how tail events could account for financial anomalies such as the equity premiumpuzzle. These models do not explore, however, why investors would discount tail risk so heavily. We take on this challenge by designing a novel tail-event experiment to assess both investors’ behavioral and physiological reactions. We show that investors who observe the tail event without suffering losses tend to decrease their pricing of the asset subsequently. By contrast, loss-averse investors who suffer tail losses tend to increase their bids. This response is especially pronounced for those who exhibit a strong emotional response to tail losses. This demonstrates the key role played by emotions in influencing investors’ response to tail events. Finally, investors who exhibit high anticipatory arousal, as measured with electrodermal activity, posted lower bids and were less likely to suffer tail losses and go bankrupt. They also achieved higher earnings when tail events occurred frequently. This finding contrasts with the common view that investors should silence their emotions.

Impact of virus testing on COVID-19 case fatality rate : estimate using a fixed-effects model

Anthony Terriau, Arthur Poirier, Julien Albertini, Quentin Le Bastard, Working paper GATE 2020-15
In response to the coronavirus disease (COVID-19) pandemic, governments have adopted a variety of public health measures. In this study, we aimed to evaluate the impact of testing on the fatality rate. We use data on inpatients across French geographic areas and propose a novel methodology that exploits policy discontinuities at region borders to estimate the effect of testing symptomatic individuals on the case-fatality rate in France. Our identification strategy is based on the fact that, in France, testing policies are determined regionally by the Regional Public Health Agencies. We compare all contiguous department pairs located on the opposite sides of a region border. Department pairs have different testing rates but share similar health trends. The heterogeneity in testing rate between department pairs together with the similarities in other dimensions allow us to mimic the existence of treatment and control groups and to identify the impact of testing on the mortality rate. We find that in France, the increase of one percentage point in the test rate is associated with a decrease of 0.001 percentage point in the death rate. Putting this number into perspective involves that for each additional 1000 tests, one person would have remained alive.

Unemployment insurance, Recalls and Experience Rating

Julien Albertini, Xavier Fairise, Anthony Terriau, Working paper GATE 2020-14
In the US, almost half of unemployment spells end through recall. In this paper, we show that the probability of being recalled is much higher among unemployment benefit recipients than nonrecipients. We argue that a large part of the observed difference in recall shares is accounted for by the design of the unemployment insurance financing scheme characterized by an experience rating system. We develop a search and matching model with different unemployment insurance status, endogenous separations, recalls and new hires. We quantify what would have been the labor market under alternative financing scheme. In the absence of the experience rating, the hiring and separations would have been higher in the long run and more volatile. Experience rating system contributes significantly to the difference in recalls between the recipients and the nonrecipients.

Are the liquidity and collateral roles of asset bubbles different ?

Lise Clain-Chamosset-Yvrard, Xavier Raurich, Thomas Seegmuller, Working paper GATE 2020-13
Several recent papers introduce different mechanisms to explain why asset bubbles are observed in periods of larger growth. These papers share common assumptions, heterogeneity among traders and credit market imperfection, but differ in the role of the bubble, used to provide liquidities or as collateral in a borrowing constraint. In this paper, we introduce heterogeneous traders by considering an overlapping generations model with households living three periods. Young households cannot invest in capital, while adults have access to investment and face a borrowing constraint. Introducing bubbles in a quite general way, encompassing the different roles they have in the existing literature, we show that the bubble may enhance growth when the borrowing constraint is binding. More significantly, our results do not depend on the - liquidity or collateral role attributed to the bubble. We finally extend our analysis to a stochastic bubble, which may burst with a positive probability. Because credit and bubble are no more perfectly substitutable assets, the liquidity and collateral roles of the bubble are not equivalent. Growth is larger when bubbles play the liquidity role, because the burst of a bubble used for liquidity is less damaging to agents who invest in capital.

Application and Award Responses to Stricter Screening in Disability Insurance

Mathilde Godard, Pierre Koning, Maarten Lindeboom, Working paper GATE 2020-12
We examine the targeting effects of stricter screening in the Dutch Disability Insurance (DI) program induced by a major nationwide reform. The drastic 2003 “Gatekeeper Protocol” raised DI application costs and revealed more information about individual true ability to work. Discontinuity-in-Time regressions on administrative data show substantial declines in DI application rates (a 40% decrease in one year), with the largest decline occurring in difficult-todiagnose impairments and less severe health disorders. This resulted in a more deserving pool of applicants. At the same time, those who stopped applying had worse health, worked less, and were more likely to be on UI and social assistance than workers who did not apply in the old system. There are no additional targeting gains at the point of the award decision, implying that changes in average health conditions of awardees were fully driven by self-screening and work resumption in the DI waiting period.

A New Mechanism to Alleviate the Crises of Confidence in Science With An Application to the Public Goods Game

Luigi Butera, Philip J. Grossman, Daniel Houser, John A. List, Marie Claire Villeval, Working paper GATE 2020-11
Recently a credibility crisis has taken hold across the social sciences, arguing that a component of Fischer (1935)’s tripod has not been fully embraced : replication. The importance of replications is not debatable scientifically, but researchers’ incentives are not sufficient to encourage replications. We analyze a novel mechanism promoting replications through beneficial gains between scholars and editors. We highlight the tradeoffs involved in seeking independent replications before submission to journals, and demonstrate the operation of this method via an investigation of the effects of Knightian uncertainty on cooperation in public goods games, a pervasive but largely unexplored feature in the literature.

Let’s chat... When communication promotes efficiency in experimental asset markets

Brice Corgnet, Mark DeSantis, David Porter, Working paper GATE 2020-10
The growing prevalence of stock market chat rooms and social media suggests communication between traders may affect market outcomes. Using data from a series of laboratory experiments, we study the causal effect of trader communication on the price efficiency of markets. We show that communication allows markets to convey private information more effectively. This effect is most pronounced when the communication platform publicizes a reputation score that might identify a person as not being truthful. This illustrates the need for market designers to consider social interactions when designing market institutions to leverage the social motives that foster information aggregation.

Performance Feedback and Peer Effects

Marie Claire Villeval, Working paper GATE 2020-09
This paper reviews studies conducted in naturally-occurring work environments or in the laboratory on the impact of performance feedback provision and peer effects on individuals’ performance. First, it discusses to which extent feedback on absolute performance affects individuals’ effort for cognitive or motivational reasons, and how evaluations can be distorted strategically. Second, this paper highlights the positive and negative effects of feedback on relative performance and rank on individuals’ productivity and persistence, but also on the occurrence of anti-social behavior. Relative feedback stimulates effort by informing on the marginal return or the marginal cost of effort, and by activating behavioral forces even in the absence of monetary incentives. These behavioral mechanisms relate to self-esteem, status concerns, competitive preferences and social learning. Relative feedback sometimes discourages or distorts effort, notably if people collude or are disappointment averse. In addition to incentive schemes and social preferences, the management of self-confidence affects the way relative feedback impacts productivity. Third, the paper addresses the question of the identification of peer effects on employees’ performance, their size, their direction and their heterogeneity along the hierarchy. The mechanisms behind peer effects include conformism, social pressure, rivalry, social learning and distributional preferences, depending on the presence of payoff externalities or technological and organizational externalities.

Nonverbal content and swift trust : An experiment on digital communication

Zakaria Babutsidze, Nobuyuki Hanaki, Adam Zylbersztejn, Working paper GATE 2020-08
We experimentally study the effect of the mode of digital communication on the emergence of swift trust in a principal-agent relationship. We consider three modes of communication that differ in the capacity to transmit nonverbal content : plain text, audio, and video. Communication is pre-play, one-way, and unrestricted, but its verbal content is homogenized across treatments. Overall, both audio and video messages have a positive (and similar) effect on trust as compared to plain text ; however, the magnitude of these effects depends on the verbal content of agent’s message (promise to act trustworthily vs. no such promise). In all conditions, we observe a positive effect of the agent’s promise on the principal’s trust. We also report that trust in female principals is sensitive to the availability of nonverbal cues about interaction partners.

Working too much for too little : stochastic rewards cause work addiction

Brice Corgnet, Simon Gaechter, Roberto Hernán González, Working paper GATE 2020-07
People are generally assumed to shy away from activities generating stochastic rewards, thus re-quiring extra compensation for handling any additional risk. In contrast with this view, neuroscience research with animals has shown that stochastic rewards may act as a powerful motivator. Applying these ideas to the study of work addiction in humans, and using a new experimental paradigm, we demonstrate how stochastic rewards may lead people to continue working on a repetitive and effortful task even after monetary compensation becomes saliently negligible. In line with our hypotheses, we show that persistence on the work task is especially pronounced when the entropy of stochastic rewards is high, which is also when the work task generates more stress to participants. We discuss the economic and managerial implications of our findings.

Harnessing the Power of Social Incentives to Curb Shirking in Teams

Brice Corgnet, Brian Gunia, Roberto Hernán González, Working paper GATE 2020-06
We study several solutions to shirking in teams that trigger social incentives by reshaping the workplace social context. Using an experimental design, we manipulate social pressure at work by varying the type of workplace monitoring and the extent to which employees engage in social interaction. This design allows us to assess the effectiveness as well as the popularity of each solution. Despite similar effectiveness in boosting productivity across solutions, only organizational systems involving social interaction (via chat) were at least as popular as a baseline treatment. This suggests that any solution based on promoting social interaction is more likely to be embraced by workers than monitoring systems alone.

Effects of cluster policies on regional innovation networks : Evidence from France

Konan Alain N’Ghauran, Corinne Autant-Bernard, Working paper GATE 2020-05
Despite the growing body of literature evaluating cluster policies, it still remains difficult to establish conclusively their structural effects on regional innovation networks. Focusing on the French cluster policy during the period 2005-2010, this study aims at evaluating how cluster policies influence the structure of local innovation networks following network topologies that may be beneficial for regional innovation. Based on a panel data of four periods and 94 NUTS3 French regions, we estimate spatial Durbin models, allowing us to identify direct, indirect and total effects of cluster policies. The results suggest that cluster policies can result in both positive and negative total effects on the structure of local innovation networks depending on regions’ technological specialisation. Beyond the heterogeneous effects, the results also highlight that cluster policies may lead to a regional competition for the strengthening of innovation networks. This finding echoed previous research pointing out the possible ‘beggar-thy-neighbour’ effects of cluster policies.

Assessing the collaboration and network additionality of innovation policies : a counterfactual approach to the French cluster policy

Konan Alain N’Ghauran, Corinne Autant-Bernard, Working paper GATE 2020-04
Whereas most collaboration-based innovation policies aim at fostering efficient ecosystems of innovation, evaluations of the behavioural impact of such policies remain few and far between. Relying on external-to-the-policy network data to build a counterfactual approach, this paper addresses three main evaluation issues : do cluster policies make firms more collaborative ? Do they encourage local ties ? Do they induce network additionality ? Focusing on French data, our results suggest that cluster policies may lack effectiveness in tackling network failures.

Learning to deal with repeated shocks under strategic complementarity : An experiment

Muhammed Bulutay, Camille Cornand, Adam Zylbersztejn, Working paper GATE 2020-03
Experimental evidence shows that the rational expectations hypothesis fails to characterize the path to equilibrium after an exogenous shock when actions are strategic complements. Under identical shocks, however, repetition allows adaptive learning, so that inertia in adjustment should fade away with experience. If this finding proves to be robust, inertia in adjustment may be irrelevant among experienced agents. The conjecture in the literature is that inertia would still persist, perhaps indefinitely, in the presence of real-world complications such as nonidentical shocks. Herein, we empirically test the conjecture that the inertia in adjustment is more persistent if the shocks are nonidentical. For both identical and nonidentical shocks, we find persistent inertia and similar patterns of adjustment that can be explained by backward-looking expectation rules. A reformulation of naïve expectations with similarity-based learning approach is found to have a higher predictive power than rational and trend-following rules.

Taking off into the Wind : Unemployment Risk and State-Dependent Government Spending Multipliers

Julien Julien Albertini, Stéphane Auray, Hafedh Bouakez, Aurélien Eyquem, Working paper GATE 2020-02
We propose a model with involuntary unemployment, incomplete markets, and nominal rigidity, in which the effects of government spending are state-dependent. An increase in government purchases raises aggregate demand, tightens the labor market and reduces unemployment. This in turn lowers unemployment risk and thus precautionary saving, leading to a larger response of private consumption than in a model with perfect insurance. The output multiplier is further amplified through a composition effect, as the fraction of high-consumption households in total population increases in response to the spending shock. These features, along with the matching frictions in the labor market, generate significantly larger multipliers in recessions than in expansions. As the pool of job seekers is larger during downturns than during expansions, the concavity of the job-finding probability with respect to market tightness implies that an increase in government spending reduces unemployment risk more in the former case than in the latter, giving rise to countercyclical multipliers.

Health, wealth, and informality over the life cycle

Julien Albertini, Xavier Fairise, Anthony Terriau, Working paper GATE 2020-01
How do labor market and health outcomes interact over the life cycle in a country characterized by a large informal sector and strong inequalities ? To quantify the effects of bad health on labor market trajectories, wealth, and consumption, we develop a life-cycle heterogeneous agents model with a formal and an informal sector. We estimate our model using data from the National Income Dynamics Study, the first nationally representative panel study in South Africa. We run counterfactual experiments and show that health shocks have an important impact on wealth and consumption. The channel through which these shocks propagate strongly depends on the job status of individuals at the time of the shock. For formal workers, bad health reduces labor efficiency, which translates into lower earnings. For informal workers and the non-employed, the shock lowers the job finding rate and in- creases job separation into non-employment, which results in a surge in non-employment spells. As bad health spells persist more for non-employed than for employed individuals, the interaction between labor market risks and health risks generates a vicious circle.

2019

A characterization of Approval Voting without the approval balloting assumption

Federica Ceron, Stéphane Gonzalez, Working paper GATE 2019-38
We provide an axiomatic characterization of Approval Voting without the approval balloting assumption. The dichotomous structure of the informational basis of Approval voting as well as its aggregative rationale are jointly derived from a set of normative conditions on the voting procedure. The first one is the well-known social-theoretic principle of consistency ; the second one, ballot richness, requires voters to be able to express a sufficiently rich set of opinions ; the last one, dubbed no single-voter overrides, demands that the addition of a voter to an electorate cannot radically change the outcome of the election. Such result is promising insofar it suggests that the informational basis of voting may have a normative relevance that deserves formal treatment.

Sharing the Global Benefits of Finite Natural Resource Exploitation : A Dynamic Coalitional Stability Perspective

Stéphane Gonzalez, Fatma Zahra Rostom, Working paper GATE 2019-37
The article explores the implications of natural resource scarcity in terms of global cooperation and trade. We investigate whether there exist stable international long-term agreements that take into account the disparities between countries in terms of geological endowments and productive capacity, while caring about future generations. For that purpose, we build an original cooperative game framework, where countries can form coalitions in order to optimize their discounted consumption stream in the long-run, within the limits of their stock of natural resources. We use the concept of the recursive core that satisfies both coalitional stability and time consistency. We show that this set is nonempty, stating that an international long-term agreement along the optimal path will be self-enforcing. The presented model can be viewed as a tool to refresh the common look at the North-South opposition and sets the conceptual framework for the exploration of a fair sharing of the fruits of global economic growth.

Preferences for observable information in a strategic setting : An experiment

Adam Zylbersztejn, Zakaria Babutsidze, Nobuyuki Hanaki, Working paper GATE 2019-36
We experimentally investigate how much value people put in observable information about others in strategic interactions. The incentivized experimental task is to predict an unknown target player’s trustworthiness in an earlier hidden action game. In Experiment 1, we vary the source of information about the target player (neutral picture, neutral video, video containing strategic content). The observed prediction accuracy rates then serve as an empirical measure of the objective value of information. In Experiment 2, we elicit the subjective value of information using the standard stated preferences method ("willingness to accept"). While the elicited subjective values are ranked in the same manner as the objective ones, subjects attach value to information which does not help predict target behavior, and exaggerate the value of helpful information.

Accounting for Wealth Inequality Dynamics : Methods, Estimates and Simulations for France

Bertrand Garbinti, Jonathan Goupille-Lebret, Thomas Piketty, Working paper GATE 2019-35
Measuring and understanding the evolution of wealth inequality is a key challenge for researchers, policy makers, and the general public. This paper breaks new ground on this topic by presenting a new method to estimate and study wealth inequality. This method combines fiscal data with household surveys and national accounts in order to provide annual wealth distribution series, with detailed breakdowns by percentiles, age and assets.
Using the case of France as an illustration, we show that the resulting series can be used to better analyze the evolution and the determinants of wealth inequality dynamics over the 1970-2014 period. We show that the decline in wealth inequality ends in the early 1980s, marking the beginning of a rise in the top 1% wealth share, though with significant fluctuations due largely to asset price movements. Rising inequality in saving rates coupled with highly stratified rates of returns has led to rising wealth concentration in spite of the opposing effect of house price increases. We develop a simple simulation model highlighting how changes in the combination of unequal saving rates, rates of return and labor earnings that occurred in the early 1980s generated large multiplicative effects that led to radically different steady-state levels of wealth inequality. Taking advantage of the joint distribution of income and wealth, we show that top wealth holders are almost exclusively top capital earners, and less and less are made up of top labor earners ; it has become increasingly difficult in recent decades to access top wealth groups with one’s labor income only.

Inégalités de revenus et de richesse en France : évolutions et liens sur longue période

Bertrand Garbinti, Jonathan Goupille-Lebret, Working paper GATE 2019-34
Cet article propose un éclairage sur l’évolution de longue période des inégalités de revenu, de patrimoine et de leur lien en France. Après une forte baisse des inégalités qui avait commencé au début de la première guerre mondiale, une tendance inégalitaire est apparue (et se poursuit) depuis le milieu des années 1980. La perspective historique permet d’illustrer comment de faibles changements dans les inégalités de taux d’épargne, de rendement ou de revenu du travail peuvent avoir de forts effets de long terme sur la concentration du patrimoine. Deux autres grandes tendances s’observent depuis les années 1970. L’une est la baisse de l’écart des revenus du travail entre femmes et hommes – même s’il reste élevé. L’autre est la difficulté accrue, pour les détenteurs de seuls revenus du travail, d’accéder aux plus hauts patrimoines. Enfin, nos comparaisons entre la France et les États-Unis montrent que les inégalités de patrimoine et de revenu étaient comparables voire plus faibles aux États-Unis avant les années 1970. Ce pays est devenu nettement plus inégalitaire désormais.

The Old-Age Security Motive for Fertility : Evidence from the Extension of Social Pensions in Namibia

Pauline Rossi, Mathilde Godard, Working paper GATE 2019-33
The old-age security motive for fertility postulates that people’s needs for old-age support raise the demand for children. We test this widespread idea using the extension of social pensions in Namibia during the nineties. The reform eliminated inequalities in pension coverage and benefit across regions and ethnic groups. Combining differences in pre-reform pensions and differences in exposure across cohorts, we show that pensions substantially reduce fertility, especially in late reproductive life. This article provides the first quasi-experimental quantification of the old-age security motive. The results suggest that improving social protection for the elderly could go a long way in fostering fertility decline in Sub-Saharan Africa.

Double overreaction in beauty-contests with information acquisition : theory and experiment

Romain Baeriswyl, Kene Boun My, Camille Cornand, Working paper GATE 2019-32
Central banks’ disclosures, such as forward guidance, have a weaker effect on the economy in reality than in theoretical models. The present paper contributes to understanding how people pay attention and react to various sources of information. In a beauty-contest with information acquisition, we show that strategic complementarities give rise to a double overreaction to public disclosures by increasing agents equilibrium attention, which, in turn, increases the weight assigned to them in equilibrium action. A laboratory experiment provides evidence that the effect of strategic complementarities on the realised attention and the realised action is qualitatively consistent with theoretical predictions, though quantitatively weaker. Both the lack of attention to public disclosures and a limited level of reasoning by economic agents account for the weaker realised reaction. This suggests that it is just as important for a central bank to control reaction to public disclosures by swaying information acquisition by recipients as it is by shaping information disclosures themselves.

Delineating urban areas using building density

Marie-Pierre de Bellefon, Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon, Clément Gorin, Working paper GATE 2019-31
We develop a new dartboard methodology to delineate urban areas using detailed information about building location, which we implement using a map of all buildings in France. For each pixel, our approach compares actual building density after smoothing to counterfactual smoothed building density computed after randomly redistributing buildings. We define as urban any area with statistically significant excess building density. Within urban areas, extensions to our approach allow us to distinguish ‘core’ urban pixels and detect centres and subcentres. Finally, we develop novel one- and two-sided tests that provide a statistical basis to compare maps with different delineations, which we use to assess the robustness of our approach and to document large differences between our preferred delineation and the corresponding official one.

Décentralisation et taille optimale des gouvernements locaux : pourquoi, comment coopérer et avec quels effets ?

Sonia Paty, Morgan Ubeda, Working paper GATE 2019-30
Devant l’accélération des réformes territoriales observées dans de nombreux pays décentralisés, cet article propose une analyse des phénomènes de consolidation – fusion ou coopération – observés au niveau des gouvernements locaux. Après avoir dressé un rapide panorama des diverses formes institutionnelles de la consolidation avec un éclairage particulier sur le cas français, nous présentons les fondements théoriques de ces mouvements de réorganisation territoriale ainsi que les facteurs qui contribuent à la formation de ces nouvelles entités locales. Nous synthétisons ensuite la littérature empirique émergente sur les effets de la consolidation sur les variables économiques telles que la croissance, les dépenses publiques et la fiscalité dans différents pays. Nous présentons enfin une analyse originale des effets de l’intercommunalité sur les revenus des ménages en France.

Labor Contracts, Gift-Exchange and Reference Wages : Your Gift Need Not Be Mine !

Hernán Bejarano, Brice Corgnet, Joaquín Gómez-Miñambres, Working paper GATE 2019-29
We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the gift-exchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions are unstable.

Why Join a Team ?

David J. Cooper, Krista Saral, Marie Claire Villeval, Working paper GATE 2019-28
We present experiments exploring why high ability workers join teams with less able co-workers when there are no short-term financial benefits. We distinguish between two explanations : pro-social preferences and expected long-term financial gains from teaching future teammates. Participants perform a real-effort task and decide whether to work independently or join a two-person team. Treatments vary the payment scheme (piece rate or revenue sharing), whether teammates can communicate, and the role of teaching. High ability workers are more willing to join teams in the absence of revenue sharing and less willing to join teams when they cannot communicate. When communication is possible, the choice of high ability workers to join teams is driven by expected future financial gains from teaching rather than some variety of pro-social preferences. This result has important implications for the role of adverse selection in determining the productivity of teams.

The Way People Lie in Markets

Chloe Tergiman, Marie Claire Villeval, Working paper GATE 2019-27
In a finitely repeated game with asymmetric information, we experimentally study how reputation and standard market mechanisms change the nature of fraudulent announcements by experts. While some lies can be detected ex post by investors, other lies remain deniable. Lying behavior suggests that individuals care more about the consequences of being caught, rather than the act of lying per se. Allowing for reputation reduces the frequency of lies that can be detected but has no impact on deniable lies : individuals simply hide their lies better and fraud persists. Competition without reputation increases risky lies and never protects investment.

Doing Bad to Look Good : Negative Consequences of Image Concerns on Pro-social Behavior

Ivan Soraperra, Anton Suvorov, Jeroen van de Ven, Marie Claire Villeval, Working paper GATE 2019-26
Several studies show that social image concerns stimulate pro-social behavior. We study a setting in which there is uncertainty about which action is pro-social. Then, the quest for a better social image can potentially conflict with genuinely pro-social behavior. This conflict can induce \bad" behavior, where people lower both their own and others’ material payoffs to preserve a good image. This setting is relevant for various types of credence goods. For example, recommending an inexpensive treatment reduces the expert’s profits and may not satisfy the true needs of the client, but is generally good for the expert’s image (as it signals the lack of greed). We test experimentally if people start to act bad in order to look good. We find that people care about their social image, but social image concerns alone do not induce them to act bad. That is, without future interactions, social image concerns do not lead to bad behavior. However, with future interactions, where building up a good image has instrumental value (reputational concerns), we do find evidence of bad behavior in the short run to secure higher earnings in the long run.

Taxes, traffic jam and spillover in the metropolis

Tidiane Ly, Working paper GATE 2019-25
This paper studies local governments’ public policies in a metropolitan area plagued by traffic congestion, where both residents and workers consume local public goods. We develop a new spatial sub-metropolitan tax competition model which features a central city surrounded by suburban towns linked by mobile capital and mobile residents who commute to work. We show that Pareto-efficiency is achieved if towns can retain their workers using labor subsidies. Otherwise, traffic congestion in the city is inefficiently high and local governments respond by setting inefficient public policies : (1) the city over-taxes capital and under-taxes residents, which leads to too little capital and too many residents in the city ; (2) local public goods are under-provided in the city and over-provided in the towns.

Fraud Deterrence Institutions Reduce Intrinsic Honesty

Fabio Galeotti, Valeria Maggian, Marie Claire Villeval, Working paper GATE 2019-24
Deterrence institutions are widely used in modern societies to discourage rule violations but whether they have an impact beyond their immediate scope of application is usually ignored. Using a natural field experiment, we show that they affect intrinsic honesty across contexts. We identified fraudsters and non-fraudsters in public transport who were or not exposed to ticket inspections by the transport company. We then measured the intrinsic honesty of the same persons in a new unrelated context where they could misappropriate money. Instead of having an educative effect across contexts, the exposure to deterrence practices increases unethical behavior of fraudsters but also of non-fraudsters.

Local Government and Innovation : the case of Italian provinces

Fortuna Casoria, Marianna Marino, Pierpaolo Parrotta, Davide Sala, Working paper GATE 2019-23
This paper evaluates the effect of decentralization on innovation at the provincial level in Italy. We exploit quasi-natural experiments associated with three waves of reforms occurred in 1992, 2001 and 2004, to establish 8, 4, and 3 new provinces, respectively. Using a difference-in-difference estimation approach, we find evidence of a significant detrimental effect of (further) decentralization on innovation for Northern and Central Italian provinces. We suggest a potential mechanism that may explain the reduction in innovation associated with the aforementioned reforms. We argue that this finding can be rationalized with the costs imposed by the \mafia transplantation" phenomenon, as we find that the new provinces that were more exposed to \mafiosi in confino" reduced their innovation output more extensively. We perform a number of robustness checks that corroborate our main findings.

"Positional Views" as the Cornerstone of Sen’s Idea of Justice

Antoinette Baujard, Muriel Gilardone, Working paper GATE 2019-22
Our paper offers a novel reading of Sen’s idea of justice, beyond the standard prisms imposed by theories of justice – resting on external normative criteria – and formal welfarism – involving the definition of individual welfare and its aggregation. Instead we take seriously Sen’s emphasis on personal agency and focus on his original contribution to the issue of objectivity. Firstly, we demonstrate that Sen’s idea of justice, with at its core “positional views”, is more respectful of persons’ agency than would be a theory based on individual preference or capability. Secondly, we argue that Sen’s conception of objectivity considers that both information and sentiments are relative to a position. Such an alternative approach to subjectivity allows the formation of more impartial views through collective deliberation and a better consideration of justice by agents themselves.

Do measures of risk attitude in the laboratory predict behavior under risk in and outside of the laboratory ?

Gary Charness, Thomas Garcia, Theo Offerman, Marie Claire Villeval, Working paper GATE 2019-21
We consider the external validity of laboratory measures of risk attitude. Based on a large-scale experiment using a representative panel of the Dutch population, we test if these measures can explain two different types of behavior : (i) behavior in laboratory risky financial decisions, and (ii) behavior in naturally-occurring field behavior under risk (financial, health and employment decisions). We find that measures of risk attitude are related to behavior in laboratory financial decisions and the most complex measures are outperformed by simpler measures. However, measures of risk attitude are not related to risk-taking in the field, calling into question the methods currently used for the purpose of measuring actual risk preferences. We conclude that while the external validity of measures of risk attitude holds in closely related frameworks, this validity is compromised in more remote settings.

Reconsidering Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets

Brice Corgnet, Cary Deck, Mark DeSantis, Kyle Hampton, Erik O. Kimbrough, Working paper GATE 2019-20
The ability of markets to aggregate diverse information is a cornerstone of economics and finance, and empirical evidence for such aggregation has been demonstrated in previous laboratory experiments. Most notably Plott and Sunder (1988) find clear support for the rational expectations hypothesis in their Series B and C markets. However, recent studies have called into question the robustness of these findings. In this paper, we report the result of a direct replication of the key information aggregation results presented in Plott and Sunder. We do not find the same strong evidence in support of rational expectations that Plott and Sunder report suggesting information aggregation is a fragile property of markets.

A Job Vacancy Rate for Argentina

Julien Albertini, Arthur Poirier, Danilo R. Trupkin, Working paper GATE 2019-19
This paper builds a time series for vacancies in Argentina and shows the path of the Beveridge curve during the period 2000–2018. We use a novel dataset from a survey that collects vacancy postings since 2008 and combine it with a print help-wanted index published from 2000 through 2014. We present, as a result, a job vacancy series long enough to cover six recessions in addition to the 2001 crisis.

Do upfront investments increase cooperation ? A laboratory experiment

Fortuna Casoria, Alice Ciccone, Working paper GATE 2019-18
We investigate whether upfront investments increase cooperation in settings with no enforcement mechanism, where cooperation is not easily sustained voluntarily. Such investments are a cost that individuals incur before deciding whether to cooperate and increase cooperation payoff. We find that cooperation rarely emerges in treatments without investments, while both endogenous and exogenous investments boost overall cooperation levels. For low endogenous investments, cooperation is lower than when the same investments are exogenous. For high investments, cooperation is not significantly different between endogenous and exogenous conditions. This supports low investments being interpreted as a signal of unwillingness to cooperate, triggering non-cooperative choices.

Blockchain and Smart-contract : a pioneering Approach of inter-firms Relationships ? The case of franchise networks

Richard Baron, Magali Chaudey, Working paper GATE 2019-17
This paper is interested in the analysis of Blockchains and Smart-contracts applied to inter-firms relationships, in particular the franchise networks. After defining the Blockchain technology and the Smart-contract as a particular type of contract stored in blockchains, we question the theory of contracts and its conception(s) of transactions, information asymmetries, firm or inter-firm relations. To better understand the challenges of blockchain for franchise networks and identify opportunities for implementation in these networks, we present some relevant applications of this technology. We identify different ways where blockchain technology could improve the network management and therefore their performance : the supply-chain, the brand-name protection, security and transparency in the payment of fees and royalties, access to reliable information via an oracle.

Informal Work along the Business Cycle : Evidence from Argentina

Julien Albertini, Arthur Poirier, Thepthida Sopraseuth, Working paper GATE 2019-16
We shed light on the driving forces behind unemployment fluctuations and short-run changes in the informality rate on the Argentine labor market. Using Argentine survey data, we measure worker flows between formal employment, informal employment, unemployment and non-participation. We propose a methodology to correct for the discontinuity of Argentine survey data and that is able to compute consistent time series of quarterly ins and outs of informal work. Using variance decompositions and counterfactual exercises, we show that the ins and outs of informal employment are key drivers of labor market fluctuations. In particular, outflows from unemployment to informal employment account for 37% of fluctuations in the unemployment rate. In addition, our analysis suggests that informality is : (i) a flexible sector that is used in recessionary periods as a buffer against income losses and (ii) a stepping stone towards formal employment. The observed large changes in the informality rate are well explained by the change in job mobility between the formal and informal sectors as well as variations in hirings from unemployment and non-participation in the informal sector.

New Results for Additive and Multiplicative Risk Apportionment

Henri Loubergé, Yannick Malevergne, Béatrice Rey, Working paper GATE 2019-15
We start by pointing out a simple property of risk apportionment with additive risks in the general stochastic dominance context defined by Eeckhoudt et al. (2009b). Quite generally, an observed preference for risk apportionment with additive risks in a specific risk environment is preserved when the decision-maker is confronted to other risk situations, so long as the total order of stochastic dominance relationships among pairs of risks remains the same. Our objective is to check whether this simple property also holds for multiplicative risk environments. We show that this is not the case, in general, but that the property holds and more strongly for the case of CRRA utility functions. This is due to a particular feature of CRRA functions that we unveil.

The Logic of Fear : Populism and Media Coverage of Immigrant Crimes

Mathieu Couttenier, Sophie Hatte, Mathias Thoenig, Stephanos Vlachos, Working paper GATE 2019-14
We study how news coverage of immigrant criminality impacted municipality-level votes in the November 2009 “minaret ban” referendum in Switzerland. The campaign, successfully led by the populist Swiss People’s Party, played aggressively on fears of Muslim immigration and linked Islam with terrorism and violence. We combine an exhaustive violent crime detection dataset with detailed information on crime coverage from 12 newspapers. The data allow us to quantify the extent of pre-vote media bias in the coverage of migrant criminality. We then estimate a theory-based voting equation in the cross-section of municipalities. Exploiting random variations in crime occurrences, we find a first-order, positive effect of news coverage on political support for the minaret ban. Counterfactual simulations show that, under a law forbidding newspapers to disclose a perpetrator’s nationality, the vote in favor of the ban would have decreased by 5 percentage points (from 57.6% to 52.6%).

A simple model of corporate bailouts in a globalized economy

Nelly Exbrayat, Thierry Madiès, Stéphane Riou, Working paper GATE 2019-13
This paper explores how globalization influences the decision of governments to rescue inefficient domestic firms when bailouts affect firms’markups. We develop a model of international trade where immobile domestic enterprises (DOEs) compete with foreign enterprises (FOEs) in an oligopolistic market. The decision to bail out DOEs leads to lower corporate tax revenues if FOEs are immobile whereas tax revenues might increase if FOEs are mobile. Interestingly, the mobility of FOEs makes governments more prone to rescue ineffcient domestic firms because tax competition reduces the opportunity cost of a bailout policy in terms of public good provision.

New Evidence on the Effects of Quantitative Easing

Valentin Jouvanceau, Working paper GATE 2019-12
Have the macroeconomic effects of QE programs been overestimated empirically ? Using a large set of model specifications that differ in the degree of time-variation in parameters, the answer is yes. Our forecasting exercise suggests that it is crucial to allow for time-variation in parameters, but not for stochastic volatility to improve the fit with data. Having a more reliable specification, we find that the portfolio balance and signaling channels had sizable contributions to the transmission of QE programs. Finally, our identified structural shocks show that QE1 had larger macroeconomic effects than QE2 and QE3, but much smaller than usually found in the literature.

Wealth and health in South Africa

Julien Albertini, Anthony Terriau, Working paper GATE 2019-11
In this paper, we investigate the impact of wealth on health in South Africa using the National Income Dynamics Study (NIDS). We estimate a two-stage probit model with inheritance as an instrumental variable for wealth. We find no significant effect of wealth on health at the individual level, consistent with most of the results found for developed countries. Alternative specifications to the health outcomes (self-reported health versus reported diseases) as well as the introduction of gifts as an additional instrumental variable delivers similar results. In addition, we decompose wealth into liquid and illiquid wealth. Despite the health effect being higher for liquid than for non-liquid wealth, none of these measures involve substantial or significant effects on health.

Quantitative Easing and Excess Reserves

Valentin Jouvanceau, Working paper GATE 2019-10
What are the impacts of a flush of interest-bearing excess reserves to the real economy ? Surprisingly, the theoretical literature remains silent about this question. We address this issue in a new Keynesian model with various financial frictions and reserve requirements in the balance sheet of bankers. Modeling QE by the supply of excess reserves, allow for endogenous changes in the relative supply of financial assets. We find that this mechanism is crucial to identify and disentangle between the portfolio balance, the credit and the asset prices channels of QE. Further, we demonstrate that the macroeconomic effects of QE are rather weak and mainly transmitted through the asset prices channel.

Digital Communication and Swift Trust

Zakaria Babutsidze, Nobuyuki Hanaki, Adam Zylbersztejn, Working paper GATE 2019-09 sous embargo jusqu’en juillet 2020
We experimentally study the effect of the mode of digital communication on the emergence of swift trust in a principal-agent relationship. We consider three modes of communication : plain text, audio, and video. Communication is pre-play, one-way, and unrestricted, but its content is homogenized across treatments. Overall, both audio and video messages have a positive (and similar) effect on trust compared to plain text ; however, the magnitude of these effects depends on the content of agent’s message (promise to act trustworthily vs. no such promise). In all conditions, we observe a positive effect of the agent’s promise on the principal’s trust. We also find that providing visual cues about the sender promotes trust and helps overcome gender favoritism in females.

Strategically delusional

Alice Soldà, Changxia Ke, Lionel Page, William von Hippel, Working paper GATE 2019-08
We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. We design an experiment in which participants are incentivised either to form accurate beliefs about their performance at a test, or to convince a group of other participants that they performed well. We also vary participants’ ability to gather information about their performance. Our results provide, the different empirical links of von Hippel and Trivers’ (2011) theory of strategic overconfidence. First, we find that participants are more likely to overestimate their performance when they anticipate that they will try to persuade others. Second, when offered the possibility to gather information about their performance, they bias their information search in a manner conducive to receiving more positive feedback. Third, the increase in confidence generated by this motivated reasoning has a positive effect on their persuasiveness.

Promoting socially desirable behaviors : experimental comparison of the procedures of persuasion and commitment

Cécile Bazart, Mathieu Lefebvre, Julie Rosaz, Working paper GATE 2019-07
In a series of experiments, we test the relative efficiency of persuasion and commitment schemes to increase and sustain contribution levels in a Voluntary Contribution Game. The design allows to compare a baseline consisting of a repeated public good game to, respectively, four manipulation treatments relying on : an information strategy, a low commitment strategy, a high commitment strategy and a promise strategy. We confirm the advantages of psychologically orientated policies as they increase the overall level of contribution and for some, that is commitment and promises, question the decreasing trend traditionally observed in long term contributions to public goods.

Social Acceptability of Condorcet Committees

Mostapha Diss, Muhammad Mahajne, Working paper GATE 2019-06
We define and examine the concept of social acceptability of committees, in multi-winner elections context. We say that a committee is socially acceptable if each member in this committee is socially acceptable, i.e., the number of voters who rank her in their top half of the candidates is at least as large as the number of voters who rank her in the least preferred half, otherwise she is unacceptable. We focus on the social acceptability of Condorcet committees, where each committee member beats every non-member by a majority, and we show that a Condorcet committee may be completely unacceptable, i.e., all its members are unacceptable. However, if the preferences of the voters are single-peaked or single-caved and the committee size is not "too large" then a Condorcet committee must be socially acceptable, but if the preferences are single-crossing or group-separable, then a Condorcet committee may be socially acceptable but may not. Furthermore, we evaluate the probability for a Condorcet committee, when it exists, to be socially (un)acceptable under Impartial Anonymous Culture (IAC) assumption. It turns to be that, in general, Condorcet committees are significantly exposed to social unacceptability.

The good MOOC and the universities

Emilie Dargaud, Frédéric Jouneau-Sion, Working paper GATE 2019-05
We propose a model to analyze competition between an on-line course and a traditional brick-and-mortar supply for higher education. The brick and mortar supplier is physically located and students pay a transportation cost to attend the traditional course. On the contrary, the on-line course is free, without transportation cost but students incurred a fixed homogeneous disutility when choosing this type of course. We derive the optimal fee policy of a single university as a function of its location and the fixed cost associated with the on-line course. We also study the impact of distant learning on the competition between two brick and mortar universities. One university is assumed to enjoy a central position, whereas the other one is located at the extreme left of the town. We discuss equilibria and market sharing in non-regulated (i.e pure fee competition) and regulated (i.e. quantity competition) settings. Finally, public issues are addressed. In particular, the socially optimal provision of MOOC and the supply of MOOC by universities are carefully discussed.

Rac(g)e Against the Machine ? Social Incentives When Humans Meet Robots

Brice Corgnet, Roberto Hernán-González, Ricardo Mateo, Working paper GATE 2019-04
Because work is most often performed in a social context, social incentives are key to understand incentive setting in firms. We assess the strength of social incentives, which critically depend on the extent of social preferences and social pressure at work, by assessing the difference in human performance when people complete a sequential task with either other humans or robots. We find evidence that, despite maintaining monetary incentives intact, humans who work with robots underperform those who work with other humans, especially under team pay. The lack of altruism toward robots and the lack of social pressure exerted by robots are key to explain this negative effect under team pay. Under piece rate, the lack of envy toward robots plays a crucial role. Regardless of the payment scheme, our findings show that social incentives are powerful. Accounting for the weakening of social incentives when assessing the cost-efficiency of replacing humans with robots is thus critical.

Unequal Migration and Urbanisation Gains in China

Pierre-Philippe Combes, Sylvie Démurger, Shi Li, Jianguo Wang, Working paper GATE 2019-03
We assess the role of internal migration and urbanisation in China on the nominal earnings of three groups of workers (rural migrants, low-skilled natives, and high-skilled natives). We estimate the impact of many city and city-industry characteristics that shape agglomeration economies, as well as migrant and human capital externalities and substitution effects. We also account for spatial sorting and reverse causality. Location matters for individual earnings, but urban gains are unequally distributed. High-skilled natives enjoy large gains from agglomeration and migrants at the city level. Both conclusions also hold, to a lesser extent, for low-skilled natives, who are only marginally negatively affected by migrants within their industry. By contrast, rural migrants slightly lose from migrants within their industry while otherwise gaining from migration and agglomeration, although less than natives. The different returns from migration and urbanisation are responsible for a large share of wage disparities in China.

Research funding and price negotiation for new drugs

Francesca Barigozzi, Izabela Jelovac, Working paper GATE 2019-02
Pharmaceutical innovations result from the successful achievement of basic research, produced by an upstream lab, and applied research, produced by a downstream lab. We focus on the negotiation process to finance basic research by setting public and private grants and to agree on the final price of a new drug. We show that exclusive funding of basic research is desirable. To increase consumers’ surplus and reduce negotiated prices for new drugs, basic and applied research should be integrated if the lab producing applied research has a relatively large bargaining power. When instead the health authority has the larger bargaining power, integration with the producer of basic research increases negotiated prices for new drugs and should be avoided, unless the gain in bargaining power after the integration is extremely high.

The effects of status mobility and group identity on trust

Rémi Suchon, Marie Claire Villeval, Working paper GATE 2019-01
In a laboratory experiment we test the interaction effects of status and group identity on interpersonal trust. Natural group identity is generated by school affiliation. Status (expert or agent) is awarded based on relative performance in a math quiz that is ex ante less favorable to the subjects from one group. We find that "promoted" trustors (individuals from the disadvantaged group that nevertheless achieve the status of expert) trust less both in-group and out-group trustees, compared to the other members of their group. Rather than playing against the effects of natural group identity, status promotion singles-out individuals. In contrast, trustworthiness is not affected by status and there is no evidence that interacting with promoted individuals impacts trust or trustworthiness.

2018

Kenneth Arrow, moral obligations, and public policies

Susumu Cato, Adrien Lutz, Working paper GATE 2018-41
Kenneth Arrow is a founder of the social choice theory as well as a main developer of modern theories of market economies. Moral obligations and social norms are at the core of Arrow’s ethical considerations to understand and overcome his well-known impossibility theorem of preference aggregation. Interestingly, he thinks that moral obligations and social norms are very important to overcome failures of market economies. Also, he proposed some interaction between public policies and evolution of social norms. Here, we can find a consistent and systematic thinking of Arrow’s ethical considerations, which might be overlooked in spite of its importance. We believe that Arrow has political philosophy (or a theory of justice), which is quite useful to understand recent developments of behavioral economics and theories of non-market economies. Arrow’s thought is totally different from Amartya Sen and John Rawls, which are dominant in modern theories of justice. Arrow’s approach can shed some new lights on the subject of social justice.

Piero Sraffa and the project to publish Saint-Simon’s works

Michel Bovens, Adrien Lutz, Working paper GATE 2018-40
Why did Piero Sraffa (1898-1983), one of the most important economists of the twentieth century, make such extensive use of the Saint-Simonian texts, and with what end ? And to what extent does Sraffa’s evident interest underline the continuing relevance of Saint-Simonianism, including in economics ? This paper determines the exact parameters of Sraffa’s engagement with Saint-Simon. Two particular moments are identifiable :
 the first comes in the lectures that Sraffa, an Italian emigrant, gave in Cambridge from 1928 to 1931, authorized and protected by Keynes ;
 the second, which is more uncertain as regards the dates, concerns the project to publish the works of Saint-Simon, which seemed to have consumed most of Sraffa’s energies from end of the 1950s and into the 1960s.

“From Each according to Ability ; To Each according to Needs” Origin, Meaning, and Development of Socialist Slogans

Luc Bovens, Adrien Lutz, Working paper GATE 2018-39
There are three slogans in the history of Socialism that are very close in wording, namely, the famous Cabet-Blanc-Marx slogan : From each according to his ability ; To each according to his needs ; the earlier Saint-Simon–Pecqueur slogan : To each according to his ability ; To each according to his works ; and the later slogan in Stalin’s 1936 Soviet Constitution : From each according to his ability ; To each according to his work. We trace the earliest occurrences of these slogans and their biblical sources and we show how the progression from one slogan to the next casts light on the development of early socialist thought.

On commercial gluts, or when the Saint-Simonians adopted Jean-Baptiste Say’s view

Adrien Lutz, Working paper GATE 2018-38

A standard reading in the history of economic thought sets the classical stream of economists drawing upon the influence of Adam Smith (Jean-Baptiste Say, David Ricardo, etc.) in opposition to a “black box” of social thinkers (Louis Blanc, Fourierism, Saint-Simonianism, Sismondi, Robert Owen). This article, however, argues that, in the first quarter of the 19th century, the Saint-Simonians and the liberal economist Jean-Baptiste Say can be seen to adopt convergent views during the famous controversy about commercial gluts. First, we show that the Saint-Simonians and Say both see undersupply and lack of industry as causes of gluts. Next, we assert that their intellectual affinities are also visible in their belief that increasing production remains an appropriate solution for gluts. Finally, this convergence is explained by their common belief in industrialism : Saint-Simonianism is embedded in a French industrialist tradition for which Say can be taken as representative. We argue that their common belief in industry explains their convergence.

The capacity to confuse : rescuing the Saint-Simonian notion of ability from modern capability theories of social justice

Antoinette Baujard, Adrien Lutz, Working paper GATE 2018-37
“To each according to his ability, to each ability according to his works” constitutes the founding slogan of the Saint-Simonian doctrine (1825–1832). A century and a half would pass before Sen and Nussbaum developed their capability approaches, designed to consider issues of human development and quality of life. Given the prominence of capability approaches in the context of modern theories of justice, and perhaps also due to the natural analogy between the words ‘capacité’, ‘ability’, and ‘capability’, there is a clear tendency in the literature to analyse the Saint-Simonians’ contributions to justice based on the assumption that there is a conceptual link between the terms capability and ability. This paper claims, however, that the elision of these terms is unjustified, and is a source more of confusion than of enlightenment. A capability is an evaluative space for justice, while an ability is a property of individuals. The former is defined essentially in the domain of consumption and individual
accomplishment, while the latter is clearly seen as a contribution to the theory of efficient production. Finally, these differences reveal a contrast in the focus values : the ability approach insists on efficiency, while the capability approach focuses on agency.

The Saint-Simonians and the birth of social justice in France

Adrien Lutz, Working paper GATE 2018-36
This paper concerns the birth of the idea of social justice, which in France dates to the 19th century. It argues that the idea of social justice was able to emerge in France due to particular conditions, which were met for the first time by the Saint-Simonians. We first shed light on the transition in France from a commercial system to one marked by increasing industrialization, which raised new questions regarding economic justice and the composition of ownership. The Saint-Simonians were among the first to criticize this new composition, and to seek a means to organize society on a fair basis. We then explain how the Saint-Simonians came to theorize this new organization : according to them, the value of things lies in work. The difference from the classical framework, which is also utilitarian, is that they posit an opposition between workers and idlers : each and every individual must be useful to society. Finally, we analyse how the Saint-Simonians identify this opposition as existing throughout history, on which basis they not only justify their innovative views on social justice, but legitimize their project as a whole.

Early Labor Market Prospects and Family Formation

Mattias Engdahl, Mathilde Godard, Oskar N. Skans, Working paper GATE 2018-35
We use quasi-random variation in graduation years during the onset of a very deep national recession to study the relationship between early labor market conditions and young females’ family formation outcomes. A policy-pilot affecting the length of upper-secondary vocational tracks allows us to compare females who graduated into the onset of the Swedish financial crisis of the 1990s to those graduating during the final phase of the preceding economic boom while netting out the main effect of the policy. We find pronounced, but short-lived, negative labor market effects from early exposure to the recession for low-grade students in particular. In contrast, we document very long-lasting effects on family formation outcomes, again concentrated among low-grade students. Young women who graduated into the recession because of the policy-pilot formed their first stable partnerships earlier and had their first children earlier. Their partners had lower grades, which we show to be a strong predictor of divorce, and worse labor market performance. Divorces were more prevalent and the ensuing increase in single motherhood was long-lasting. These negative effects on marital stability generated persistent increases in the use of welfare benefits despite the short-lived impact on labor market outcomes. The results suggest that young women respond to early labor market prospects by changing the quality threshold for entering into family formation, a process which affects the frequency of welfare-dependent single mothers during more than a decade thereafter.

Informality over the life-cycle

Julien Albertini, Anthony Terriau, Working paper GATE 2018-34
In developing countries, informality is mainly concentrated on younger and older workers. In this paper, we propose a dual labor market theory that highlights how frictions and taxation in the formal sector as well as educational choices interact to shape the informality rate over the life-cycle. We develop a life-cycle model with search frictions, skill heterogeneities, and endogenous educational choices. We carry out a numerical analysis and show that our model reproduces remarkably well the life-cycle patterns of informality, non-employment and formal employment in Argentina. We analyze several public policies and show that an educational grant reduces both informality and non-employment and may be fully financed by the extra tax revenues generated by the increase in formal employment and wages. Lowering taxes may achieve similar results but is detrimental for the government budget, in the case of Argentina, despite increasing the base on which they are levied.

Sincere voting, strategic voting A laboratory experiment using alternative proportional systems

Isabelle Lebon, Antoinette Baujard, Frédéric Gavrel, Herrade Igersheim, Jean-François Laslier, Working paper GATE 2018-33
In two laboratory surveys run in France during the 2014 European Elections, we asked the participants to provide their personal evaluations of the parties in terms of ideological proximity, and asked how they would vote under three proportional, closed-list voting rules : the (official) single-vote rule, a split-my-vote rule, and a list-approval rule. The paper analyzes the relation between opinions and vote, under the three systems. Compared to multi-vote rules, the single-vote system leads to voters’ decisions that are more often strategic but also more often sincere. Sincere voting and strategic voting therefore appear to be more consistent than contradictory. Multi-vote rules allow the voter to express complex behavior, and the concepts of “sincere” and “strategic” voting are not always sufficient to render this complexity.

The Value of a Statistical Life Under Changes in Ambiguity

Han Bleichrodt, Christophe Courbage, Béatrice Rey, Working paper GATE 2018-32
The value of a statistical life (VSL) is a key parameter in the analysis of government policy. Most policy decisions are made under ambiguity. This paper studies the effect of changes in ambiguity perception on the value of a statistical life (VSL). We propose a definition of increases in ambiguity perception based on Ekern’s (1980) definition of increases in risk. Ambiguity aversion alone is not sufficient to lead to an increase in the VSL when the decision maker perceives more ambiguity. Our results highlight the importance of higher order ambiguity attitudes, particularly ambiguity prudence.

Spending Multipliers with Distortionary Taxes : Does the Level of Public Debt Matter ?

Rym Aloui, Aurélien Eyquem, Working paper GATE 2018-31
We investigate the link between the size of government indebtedness and the effectiveness of government spending shocks in normal times and at the Zero Lower Bound (ZLB). We develop a New Keynesian model with capital, distortionary taxes and public debt in which the ZLB constraint on the nominal interest rate may be binding. In normal times, high steady-state levels of government debt to GDP lead to reduced output multipliers. After a negative capital quality shock that pushes the economy at the ZLB however, high steadystate debt levels produce larger output multipliers. Our results rely on the fact that fiscal policy becomes self-financing at the ZLB, and that distortionary taxes rise (respectively fall) after a spending shock at the steady state (resp. ZLB). Our results have non-trivial consequences on the design of optimized spending policies in the event of large economic downturns.

Banks, Sovereign Risk and Unconventional Monetary Policies

Stéphane Auray, Aurélien Eyquem, Xiaofei Ma, Working paper GATE 2018-30
We develop a two-country model with an explicitly microfounded interbank market and sovereign default risk. Calibrated to the core and the periphery of the Euro Area, the model gives rise to a debt-banks-credit loop that substantially amplifies the effects of financial shocks, especially for the periphery. We use the model to investigate the effects of a stylized public asset purchase program at the steady state and during a crisis. We find that it is more effective in stimulating the economy during a crisis, in particular for the periphery.

Debt Hangover in the Aftermath of the Great Recession

Stéphane Auray, Aurélien Eyquem, Paul Gomme, Working paper GATE 2018-29
Following the Great Recession, U.S. government debt levels exceeded 100% of output. We develop a macroeconomic model to evaluate the role of various shocks during and after the Great Recession ; labor market shocks have the greatest impact on macroeconomic activity. We then evaluate the consequences of using alternative fiscal policy instruments to implement a fiscal austerity program to return the debt-output ratio to its pre-Great Recession level. Our welfare analysis reveals that there is not much difference between applying fiscal austerity through government spending, the labor income tax, or the consumption tax ; using the capital income tax is welfare-reducing.

On temperance and risks spreading

Christophe Courbage, Béatrice Rey, Working paper GATE 2018-28
This paper investigates the conditions for which spreading N independent and unfair risks provides the highest level of welfare than any other possible allocations of risks. It shows that such preferences do not require a higher order property than temperance. Results are also interpreted in terms of the property of superadditivity of the utility premium.

How vulnerable is risk aversion to wealth, health and other risks ? An empirical analysis for Europe

Christophe Courbage, Guillem Montoliu-Montes, Béatrice Rey, Working paper GATE 2018-27
This paper empirically assesses how financial risk aversion reacts to a change in individuals’ wealth and health and to the presence of both financial and health risks using the Survey of Health, Ageing, and Retirement in Europe (SHARE). Individuals in our sample exhibit financial risk aversion decreasing both in wealth and health. Financial risk aversion is also found to increase in the presence of a background financial risk and a background health risk. Interestingly, risk aversion is shown to be convex in wealth but linear in health. Such findings complement the literature on risk aversion behaviours and can help to better understand various economic decisions in a risky environment.

Ambiguity and excuse-driven behavior in charitable giving

Thomas Garcia, Sébastien Massoni, Marie Claire Villeval, Working paper GATE 2018-26
A donation may have ambiguous costs or ambiguous benefits. In a laboratory experiment, we show that individuals use this ambiguity strategically as a moral wiggle room to behave less generously without feeling guilty. Such excuse-driven behavior is more pronounced when the costs of a donation -rather than its benefits- are ambiguous. However, the importance of excuse-driven behavior is comparable under ambiguity and under risk. Individuals exploit any type of uncertainty as an excuse not to give, regardless of the nature of this uncertainty.

On Booms That Never Bust : Ambiguity in Experimental Asset Markets with Bubbles

Brice Corgnet, Roberto Hernán-González, Praveen Kujal, Working paper GATE 2018-25
We study the effect of ambiguity on the formation of bubbles and on the occurrence of crashes in experimental asset markets à la Smith, Suchanek, and Williams (1988). We extend their framework to an environment where the fundamental value of the asset is ambiguous. We show that, when the fundamental value is ambiguous, asset prices tend to be lower than when it is risky although bubbles form in both the ambiguous and the risky environments. Additionally, bubbles do not crash in the ambiguous case whereas they do so in the risky one. These findings regarding depressed prices and the absence of crashes in the presence of ambiguity are in line with recent theoretical work stressing the crucial role of ambiguity to account for surprisingly low equity prices (high returns) as well as herding in asset markets.

The Fiscal Theory of the Price Level in non-Ricardian Economy

Rym Aloui, Michel Guillard, Working paper GATE 2018-24
The Fiscal Theory of the Price Level (FTPL) is an important theory that recognizes the interaction between monetary and fiscal policy. In its simplest form, the FTPL assumes that the government commits to a fixed and exogenous present value of primary surpluses implying the adjustment of the price level to equate the real government debt to the present value of primary surpluses. The FTPL relies on the presence of primary surpluses to work. We show that this condition is not necessary in a non-Ricardian economy. The FTPL still hold even when exogenous primary surpluses are null. We consider an overlapping generations of infinitely-lived dynasties model with simple fiscal and monetary policies, where the effective lower bound on nominal interest rates is taken into account. A bubble-like component of government debt appears inducing the determination of the price level by the fiscal policy, when the effective lower bound on nominal interest rates is binding and even when the government primary surpluses equal zero.

Heterogeneity, Rigidity and Convergence of Labor Markets in the Euro Area

Jocelyn Maillard, Working paper GATE 2018-23
This paper investigates the welfare consequences of labor market convergence reforms for a large range of calibrations in a two-country monetary union DSGE model with search and matching frictions. The model features trade in consumption and investment goods, price stickiness, firing costs and is calibrated to reflect the structural asymmetries of flexible and rigid countries of the Euro Area in terms of size and labor market variables. Across steady states, convergence brings welfare gains for the rigid country and welfare losses for the flexible country in most situations. The higher the flexibility induced by the convergence, the higher the gains for the rigid country and the lower the losses for the flexible country. Taking into account the transition path brings results that are qualitatively similar, but have a lower magnitude in terms of welfare gains/losses. Indeed, wage bargaining has a short-term negative impact on the rigid country and a short-term positive impact on the flexible country. As such, I conclude that convergence in labor markets can lead to substantial welfare gains in a monetary union, but only if the implementation is carefully designed.

Team production

Adhen Benlahlou, Working paper GATE 2018-22
This paper investigates games played on bipartite networks by introducing a team production function allowing for any pattern of cross effects between projects and cross effects between agents. By using a new representation of a bipartite network through a multilayers network, we are able to characterize the interior equilibrium efforts as a function of agents centralities in the multilayers network.

On the external validity of experimental inflation forecasts : A comparison with five categories of field expectations

Camille Cornand, Paul Hubert, Working paper GATE 2018-21
Establishing the external validity of laboratory experiments in terms of inflation forecasts is crucial for policy initiatives to be valid outside the laboratory. Our contribution is to document whether different measures of inflation expectations based on various categories of agents (participants to experiments, households, industry forecasters, professional forecasters, financial market participants and central bankers) share common patterns by analyzing : the forecasting performances of these different categories of data ; the information rigidities to which they are subject ; the determination of expectations. Overall, the different categories of forecasts exhibit common features : forecast errors are comparably large and autocorrelated, forecast errors and forecast revisions are predictable from past information, which suggests the presence of information frictions. Finally, the standard lagged inflation determinant of inflation expectations is robust to the data sets. There is nevertheless some heterogeneity among the six different sets. If experimental forecasts are relatively comparable to survey and financial market data, central bank forecasts seem to be superior.

Bubble on real estate : The role of altruism and fiscal policy

Lise Clain-Chamosset-Yvrard, Thomas Seegmuller, Working paper GATE 2018-20
In this paper, we are interested in the interplay between real estate bubble, aggregate capital accumulation and taxation in an overlapping generations economy with altruistic households. We consider a three-period overlapping generations model with three key elements : altruism, portfolio choice, and financial market imperfections. Households realise different investment decisions in terms of asset at different periods of life, face a binding borrowing constraint and leave bequests to their children. We show that altruism plays a key role on the existence of a productive real estate bubble, i.e. a bubble in real estate raising physical capital stock and aggregate output. The key mechanism relies on the fact that a real estate bubble raises income of retired households. Because of higher bequests, there children are able to invest more in productive capital. Introducing fiscal policy, we show that raising real estate taxation dampens capital accumulation.

Do image spillovers deter rule breaking ?

Rémi Suchon, Daniel Houser, Working paper GATE 2018-19
We test whether individuals internalize the effects that their behavior may have on the social image of their group. In our experiment, we recruit pairs of real-life friends and study whether rule breaking in the form of misreporting decreases when misreporting may have negative spillovers on the image of the friend. We find that participants hurt their friends’ social image by misreporting because external observers update their beliefs : they rightfully expect that a participant whose friend misreported is likely to misreport himself. However, participants misreport as often when their behavior can hurt the friend’s image as when it cannot, even though hurting their friends’ image reduces their own monetary gains. Our interpretation is that they underestimate the impact of their behavior on external observers’ beliefs about their friends. Our results cast doubts on the capacity of groups to sustain a good image absent the possibility of punishment, which is bad news. The good news is that external observers may use image spillovers to update their beliefs and interact with members of social groups more efficiently.

Agglomeration externalities in Ecuador. Do urbanisation and tertiarisation matter ?

Carolina Guevara, Stéphane Riou, Corinne Autant-Bernard, Working paper GATE 2018-18
The paper investigates whether the tertiarisation and the rapid urbanisation faced by developing countries favour agglomeration economies. Focusing on Ecuadorian cantons, a productivity equation is estimated using the GMM model with instruments controlling for endogeneity. The varying impact of industrial concentration, diversity, competition and density across industries is investigated and for the first time, the implication of the level of urbanisation on agglomeration externalities is studied. Stronger effects are found for services. The threshold of urbanisation at which diversity, density and competition agglomeration externalities all generate positive effects was 33% while they seem challenged by congestion in highly urbanised cantons.

Axiomatic Foundations of a Unifying Core

Stéphane Gonzalez, Aymeric Lardon, Working paper GATE 2018-17
We provide an axiomatic characterization of the core of games in effectiveness form. We point out that the core, whenever it applies to appropriate classes of these games, coincides with a wide variety of prominent stability concepts in social choice and game theory, such as the Condorcet winner, the Nash equilibrium, pairwise stability, and stable matchings, among others. Our characterization of the core invokes the axioms of restricted non-emptiness, coalitional unanimity, and Maskin invariance together with a principle of independence of irrelevant states, and uses in its proof a holdover property echoing the conventional ancestor property. Taking special cases of this general characterization of the core, we derive new characterizations of the previously mentioned stability concepts.

A Method to Estimate Mean Lying Rates and Their Full Distribution

Ellen Garbarino, Robert Slonim, Marie Claire Villeval, Working paper GATE 2018-16
Studying the likelihood that individuals cheat requires a valid statistical measure of dishonesty. We develop an easy empirical method to measure and compare lying behavior within and across studies to correct for sampling errors. This method estimates the full distribution of lying when agents privately observe the outcome of a random process (e.g., die roll) and can misreport what they observed. It provides a precise estimate of the mean and confidence interval (offering lower and upper bounds on the proportion of people lying) over the full distribution, allowing for a vast range of statistical inferences not generally available with existing methods.

Other-Regarding Preferences and Giving Decision in Risky Environments : Experimental Evidence

Mickael Beaud, Mathieu Lefebvre, Julie Rosaz, Working paper GATE 2018-15
This paper investigates if and how other-regarding preferences governing giving decisions in dictator games are affected in risky environments in which the payoff of the recipient is random. We demonstrate that, whenever the risk is actuarially neutral, the donation of dictators with a purely ex post view of fairness should, in general, be affected by the riskyness of the recipient’s payoff, while dictators with a purely ex ante view should not be. Our experimental data give weak empirical support to the purely ex post view of fairness.

A heterogeneous coefficient approach to the knowledge production function

Corinne Autant-Bernard, James P. LeSage, Working paper GATE 2018-14
Past literature has used conventional spatial autoregressive panel data models to relate patent production output to knowledge production inputs. However, research conducted on regional innovation systems points to regional disparities in both regions ability to turn their knowledge inputs into innovation and to access external knowledge. Applying a heterogeneous coefficients spatial autoregressive panel model, we estimate region-specific knowledge production functions for 94 NUTS3 regions in France using a panel covering 21 years from 1988 to 2008 and 4 high-technology industries. A great deal of regional heterogeneity in the knowledge production function relationship exists across regions, providing new insights regarding spatial spillin and spillout effects between regions.

Extensions of the Simpson voting rule to the committee selection setting

Daniela Bubboloni, Mostapha Diss, Michele Gori, Working paper GATE 2018-13
Committee selection rules are procedures selecting sets of candidates of a given size on the basis of the preferences of the voters. There are in the literature two natural extensions of the well-known single-winner Simpson voting rule to the multiwinner setting. The first method gives a ranking of candidates according to their minimum number of wins against the other candidates. Then, if a fixed number k of candidates are to be elected, the k best ranked candidates are chosen as the overall winners. The second method gives a ranking of committees according to the minimum number of wins of committee members against committee nonmembers. Accordingly, the committee of size k with the highest score is chosen as the winner. We propose an in-depth analysis of those committee selection rules, assessing and comparing them with respect to several desirable properties among which unanimity, fixed majority, non-imposition, stability, local stability, Condorcet consistency, some kinds of monotonicity, resolvability and consensus committee. We also investigate the probability that the two methods are resolute and suffer the reversal bias, the Condorcet loser paradox and the leaving member paradox. We compare the results obtained with the ones related to further well-known committee selection rules. The probability assumption on which our results are based is the widely used Impartial Anonymous Culture.

The Chamberlin-Courant Rule and the k-Scoring Rules : Agreement and Condorcet Committee Consistency

Mostapha Diss, Eric Kamwa, Abdelmonaim Tlidi, Working paper GATE 2018-12
For committee or multiwinner elections, the Chamberlin-Courant rule (CCR), which combines the Borda rule and the proportional representation, aims to pick the most representative committee (Chamberlin and Courant, 1983). Chamberlin and Courant (1983) have shown that if the size of the committee to be elected is k = 1 among m ≥ 3 candidates, the CCR is equivalent to the Borda rule ; Kamwa and Merlin (2014) claimed that if k = m − 1, the CCR is equivalent to the k-Plurality rule. In this paper, we explore what happens for 1 < k < m − 1 by computing the probability of agreement between the CCR and four k-scoring rules : k-Plurality, k-Borda, k-Negative Plurality and Bloc. Our results show that for committees of at least two members, the CCR usually leads to a committee recommended by the k-Plurality rule. Furthermore, we evaluate the probability of the CCR to select the Condorcet committee à la Gehrlein when it exists. The Condorcet committee à la Gehrlein is a fixed size subset of candidates such that every meber defeats every non-member in pairwise comparisons. In this matter, our results indicate that the CCR performs less well than the k-Borda rule and the Bloc rule but better than the k-Plurality and the k-Negative Plurality rules.

Local Taxation and Tax Base Mobility : Evidence from a business tax reform in France

Tidiane Ly, Sonia Paty, Working paper GATE 2018-11
This paper investigates the impact of tax base mobility on local taxation. We first develop a theoretical model in order to examine the connection between local business property taxation and tax base mobility within a metropolitan area. We find that decreasing capital intensity in the tax base increases the business property tax rates unambiguously. We then test this result using a French reform, which changes the composition of the main local business tax base in 2010. Estimations using Difference-in-Difference show that the reduction in the mobility of the tax base indeed results in higher business property tax rates. Housing tax rates were not affected by the reform.

Experiments on macroeconomics : methods and applications

Camille Cornand, Frank Heinemann, Working paper GATE 2018-10
This chapter lays out in which respects laboratory experiments can be useful for macroeconomics and discusses some of the methods used in such experiments.

What underlies the observed hospital volume-outcome relationship ?

Marius Huguet, Xavier Joutard, Isabelle Ray-Coquard, Lionel Perrier, Working paper GATE 2018-09
Studies of the hospital volume-outcome relationship have highlighted that a greater volume activity improves patient outcomes. While this finding has been known for years in health services research, most studies to date have failed to delve into what underlies this relationship. This study aimed to shed light on the basis of the hospital volume effect by comparing treatment modalities for epithelial ovarian carcinoma patients. Hospital volume activity was instrumented by the distance from patients’ homes to their hospital, the population density, and the median net income of patient municipalities. We found that higher volume hospitals appear to more often make the right decisions in regard to how to treat patients, which contributes to the positive impact of hospital volume activities on patient outcomes. Based on our parameter estimates, we found that the rate of complete tumor resection would increase by 10% with centralized care, and by 6% if treatment decisions were coordinated by high volume centers compared to the ongoing organization of care. In both scenarios, the use of neoadjuvant chemotherapy would increase by 10%. As volume alone is an imperfect correlate of quality, policy makers need to know what volume is a proxy for in order to devise volume-based policies.

Can public and private sanctions discipline politicians ? Evidence from the French Parliament

Maxime Le Bihan, Benjamin Monnery , Working paper GATE 2018-08
This paper investigates the effects of sanctions on the behavior of deputies in the French National Assembly. In 2009, the Assembly introduced small monetary sanctions to prevent absenteeism in weekly standing committee meetings (held on wednesday mornings). Using a rich monthly panel dataset of parliamentary activity for the full 2007-2012 legislature, we study the reactions of deputies to (i) the mere eligibility to new sanctions, (ii) the actual experience of a salary cut, and (iii) the public exposure of sanctioned deputies in the media. First, our diff-in-diff estimates show very large disciplining effects of the policy in terms of committee attendance, and positive or null effects on other dimensions of parliamentary work. Second, exploiting the timing of exposure to actual sanctions (monthly salary cuts versus staggered media exposure), we find that deputies strongly increase their committee attendance both after the private experience of sanctions and after their public exposure. These results suggest that monetary and reputational incentives can effectively discipline politicians without crowding out intrinsic motivation.

Embezzlement and Guilt Aversion

Giuseppe Attanasi, Claire Rimbaud, Marie Claire Villeval, Working paper GATE 2018-07
Donors usually need intermediaries to transfer their donations to recipients. A risk is that donations can be embezzled before they reach the recipients. Using psychological game theory, we design a novel threeplayer Embezzlement Mini-Game to study whether intermediaries suffer from guilt aversion and whether guilt aversion toward the recipient is stronger than toward the donor. Testing the predictions of the model in a laboratory experiment, we show that the proportion of guilt-averse intermediaries is the same irrespective of the direction of the guilt. However, structural estimates indicate that the effect of guilt on behaviour is higher when the guilt is directed toward the recipient.

Feedback Spillovers Across Tasks, Self-Confidence and Competitiveness

Ritwik Banerjee, Nabanita Datta Gupta, Marie Claire Villeval , Working paper GATE 2018-06
Is success in a task used strategically by individuals to motivate their beliefs prior to taking action in a subsequent, unrelated, task ? Also, is the distortion of beliefs reinforced for individuals who have lower status in society ? Conducting an artefactual field experiment in India, we show that success when competing in a task increases the performers’ self-confidence and competitiveness in the subsequent task. We also find that such spillovers affect the self-confidence of low-status individuals more than that of high-status individuals. Receiving good news under Affirmative Action, however, boosts confidence across tasks regardless of the caste status.

Monetary Policy obeying the Taylor Principle Turns Prices into Strategic Substitutes

Camille Cornand, Frank Heinemann, Working paper GATE 2018-05
Monetary policy affects the degree of strategic complementarity in firms’ pricing decisions if it responds to the aggregate price level. In normal times, when monopolistic competitive firms increase their prices, the central bank raises interest rates, which lowers consumption demand and creates an incentive for firms to reduce their prices. Thereby, monetary policy reduces the degree of strategic complementarities among firms’ pricing decisions and even turns prices into strategic substitutes if the effect of interest rates on demand is sufficiently strong. We show that this condition holds when monetary policy follows the Taylor principle. By contrast, in a liquidity trap where monetary policy is restricted by the zero lower bound, pricing decisions are strategic complements. Our main contribution consists in relating the determinacy and stability of equilibria to strategic substitutability in prices. We discuss the consequences for dynamic adjustment processes and some policy implications.

Motivated Memory in dictator games

Charlotte Saucet, Marie Claire Villeval, Working paper GATE 2018-04
The memory people have of their past actions is one of the main sources of information about themselves. To study whether people retrieve their memory self-servingly, we designed an experiment in which participants have first to play binary dictator games and, second, recall the amounts allocated to the receiver. We investigate whether dictators (i) exhibit poorer recalls, (ii) over-estimate more often and (iii) to a larger extent the receiver’s amount when they have chosen the selfish option. We find that introducing monetary incentives for memory accuracy increases the dictators’ percentage of correct recalls only when they have chosen the altruistic option. The percentage of correct recalls of the dictators is lower when they have chosen the selfish option, showing that amnesia is more likely to affect selfish than altruistic dictators. However, dictators do not bias strategically the direction and magnitude of their recalls.

Expectation-driven asset price fluctuations under the spirit of capitalism hypothesis : The role of heterogeneity

Lise Clain-Chamosset-Yvrard, Working paper GATE 2018-03
In this paper, I study how heterogeneity amongst agents affects the occurrence of expectation-driven asset price fluctuations in a pure exchange economy à la Lucas, with infinitely-lived households, under the hypothesis of spirit of capitalism. I consider heterogeneous households in terms of preferences, endowments and initial wealth, and capture the spirit of capitalism through preferences for wealth. Preferences for wealth are the key element of this paper in a twofold aspect. First, they explain the occurrence of asset price fluctuations driven by self-fulfilling changes in expectations. Second, heterogeneity in endowments affects asset price level and dynamics only if preferences are heterogeneous. For instance, if agents with the strongest spirit of capitalism are also the rich in terms of endowments, heterogeneity in endowments heightens the asset price level in the long run, and destabilizes by enlarging the range of parameter values for which expectation-driven asset price fluctuations occur.

Does decentralization of decisions increase the stability of large groups ?

Tjaša Bjedov, Simon Lapointe, Thierry Madiès, Marie Claire Villeval, Working paper GATE 2018-02
Using a laboratory experiment with nested local and global public goods, we analyze the stability of global groups when individuals have the option to separate, according to the degree of decentralization of decision-making. We show that increasing the number of decisions made at the local level within a smaller group reduces the likelihood that individuals vote in favor of a configuration that includes no global good for interacting only within their local group. Voting for such a configuration is more likely when global group members are less cooperative and local group members are more cooperative. Reinforcing local group identity has no impact on votes.

Does upward mobility harm trust ?

Rémi Suchon, Marie Claire Villeval, Working paper GATE 2018-01
While considered as appealing for positive and normative reasons, anecdotal evidence suggests that upward social mobility may harm interpersonal interactions. We report on an experiment testing the effect of upward social mobility on interpersonal trust. Individuals are characterized both by a natural group identity and by a status awarded by means of relative performance in a task in which natural identities strongly predict performance. Upward mobility is characterized by the access to the high status of individuals belonging to the natural group associated with a lower expected performance. We find that socially mobile individuals trust less than those who are not socially mobile, especially when the trustee belongs to the same natural group. In contrast, upward mobility does not affect trustworthiness. We find no evidence that interacting with an upwardly mobile individual impacts trust or trustworthiness.

2017

Always doing your best ? Effort and performance in dynamic settings

Nicolas Houy, Jean-Philippe Nicolaï, Marie Claire Villeval, Working paper GATE 2017-36
Achieving an ambitious goal frequently requires succeeding in a sequence of intermediate tasks, some being critical for the final outcome, and others not. However, individuals are not always able to provide a level of effort sufficient to guarantee success in all such intermediate tasks. The ability to manage effort throughout the sequence of tasks is therefore critical when resources are limited. In this paper we propose a criterion that defines the importance of a task and identifies how an individual should optimally allocate a limited stock of exhaustible efforts over tasks. We test this importance criterion in a laboratory experiment that reproduces the main features of a tennis match. We show that our importance criterion is able to predict the individuals’ performance and it outperforms the Morris importance criterion that defines the importance of a point in terms of its impact on the probability of achieving the final outcome. We also find no evidence of choking under pressure and stress, as proxied by electrophysiological measures.

Information (Non)Aggregation in Markets with Costly Signal Acquisition

Brice Corgnet, Cary Deck, Mark DeSantis, David Porter, Working paper GATE 2017-35
Markets are often viewed as a tool for aggregating disparate private knowledge, a stance supported by past laboratory experiments. However, traders’ acquisition cost of information has typically been ignored. Results from a laboratory experiment involving six treatments varying the cost of acquiring signals of an asset’s value suggest that when information is costly, markets do not succeed in aggregating it. At an individual level, having information improves trading performance, but not enough to offset the cost of obtaining the information. Although males earn more through trading than females, this differential is offset by the greater propensity of males to buy information such that total profit is similar for males and females. Looking at individual skills, we find that higher theory of mind is associated with greater trading profit, greater overall profit, and an increased likelihood of acquiring information while cognitive reflection is associated with greater profit but not a greater propensity to acquire information.

Information Order Shifts Criterion Placement in Perceptual Decisions

Thomas Garcia, Ismaël Rafaï, Sébastien Massoni, Working paper GATE 2017-34
Facing perceptual decisions with asymmetric stakes, individuals exhibit a conservative criterion placement. This bias prevents them from reaching the optimal decision process defined as the one which maximizes their expected payoffs. We propose in the present experimental study a non-invasive method to correct behaviors toward more optimality. We manipulate the information order between payoff information and perceptual evidence for three different incentive levels invariant regarding Signal Detection Theory predictions. Our results support the effectiveness of such manipulation : the decision strategy shifts toward optimality when payoff information is displayed last. The shift toward optimality is more pronounced for higher payoff contrasts. These results, which cannot be explained within the Signal Detection Theory framework, give new insights on the cognitive processes responsible for the conservative criterion placement

Why test the theory of incentives in a dynamic framework ?

Magali Chaudey, Working paper GATE 2017-33
The recognition that contracts have a time dimension has given rise to an abundant literature since the end of the 1980s. In such a dynamic context, the contract may take place over several periods, and agents develop repeated interactions. Surprisingly, few papers have tried to apply the predictions of the dynamic theory incentives to data. However, taking a dynamic context into account can improve static empirical approaches by introducing new tools to distinguish between adverse selection and moral hazard, two asymmetrical contexts representative of the Principal–Agent model, or by solving the problem of endogeneity. A dynamic empirical approach also allows to renew the theoretical contract conception, and reveals some new features of contracts : memory, learning, and commitment.

Rebalancing in China : a taxation approach

Damien Cubizol, Working paper GATE 2017-32
The rebalancing of the Chinese economy is analyzed through a heterogeneous taxation of various types of firms. Based on a two-country dynamic general equilibrium model, the paper applies tax reforms to raise consumption, reduce some firms’ overinvestment and maintain a high level of welfare. To rebalance consumption and investment, taxation may allow reallocating a part of the labor force to firms that are not overinvesting. Moreover, the correction of distortions in production factor costs (capital and labor) is necessary during certain reforms applied in the model ; that is, on the one hand, higher credit costs for State-Owned Enterprises (SOEs) and, on the other hand, a catch-up of foreign firms’ wages by domestic firms (public and private). In this model, firms’ credit cost is a key channel because it impacts both firms’ investment and household consumption (through returns on savings). These consumption and investment reforms bring welfare benefits to households, and the results are close to direct welfare maximization. In this framework, the rebalancing of the domestic demand does not require the readjustment of the external financial position because the aggregate savings rate remains high and the supply of domestic assets is reduced. Finally, another theoretical framework proposes a heterogeneous taxation of consumption across home and foreign goods to enhance consumption.

Franchisors’ choice between royalties and fixed fees evidence from Brazil

Eugênio José Silva Bitti, Cintya Lanchimba, Muriel Fadairo, Working paper GATE 2017-31
In franchise contracts, the royalty rate and the fixed entrance fee are the main monetary clauses defining the payment scheme between the franchisor and the franchisee. In the traditional agency view, the presence of distant outlets leads the franchisor to choose a payment mechanism designed to provide incentives to the franchisee ; that is, a low royalty rate associated with a high fixed fee. Based on a unique panel dataset, we provide evidence that, in the Brazilian context, spatial dispersion has the opposite impact, with interesting practical and research implications.

Regulation and altruism

Izabela Jelovac, Samuel Kembou Nzale, Working paper GATE 2017-30
We study optimal contracts in a regulator-agent setting with joint production, altruistic and selfish agents, and uneasy outcome measurement. Such a setting represents sectors of activities such as education and health care provision. The agents and the regulator jointly produce an outcome for which they all care to some extent that is varying from agent to agent. Some agents, the altruistic ones, care more than the regulator does while others, the selfish agents, care less. Moral hazard is present due to the agent’s effort that is not contractible. Adverse selection is present too since the regulator cannot a priori distinguish between altruistic and selfish agents. Contracts consist of a simple transfer from the regulator to the agents together with the regulator’s input in the joint production. We show that a screening contract is not optimal when we face both moral hazard and adverse selection.

How voters use grade scales in evaluative voting

Antoinette Baujard, Frédéric Gavrel, Herrade Igersheim, Jean-François Laslier, Isabelle Lebon, Working paper GATE 2017-29
During the first round of the 2012 French presidential election, participants in an in situ experiment were invited to vote according to “evaluative voting”, which involves rating the candidates using a numerical scale. Various scales were used : (0,1), (-1,0,1), (0,1,2), and (0,1,...,20). The paper studies scale calibration effects, i.e., how individual voters adapt to the scale, leading to possibly different election outcomes. The data show that scales are not linearly equivalent, even if individual ordinal preferences are not inconsistent. Scale matters, notably because of the symbolic power of negative grades, which does not affect all candidates uniformly.

IT Countries : A Breed Apart ? the case of Exchange Rate Pass-Through

Antonia López-Villavicencio, Marc Pourroy, Working paper GATE 2017-28
This paper estimates the effects of two monetary policy strategies in the exchange rate pass-through (ERPT). To this end, we employ propensity score matching and consider the adoption of a target by a country as a treatment to find suitable counterfactuals to the actual targeters. By controlling for self-selection bias and endogeneity of the monetary policy regime, we show that inflation target has helped in reducing the ERPT, with older regimes more successful than younger ones. However, a de facto flexible exchange rate regime has not noticeable advantages to reduce the extent to which exchange rate fluctuations contribute to inflation instability.

The social value of information and the competition motive : Price vs. quantity games

Camille Cornand, Rodolphe Dos Santos Ferreira, Working paper GATE 2017-27
We propose a unified framework bridging the gap between team and competition issues, in order to reconsider the social value of private and public information in price and quantity games under imperfect and dispersed information, and to compare the corresponding outcomes in terms of equilibrium and social welfare. The informational distortion associated with the competition motive may lead to a negative social value of private information and reverse the perfect information result in favor of strategic substitutability as the source of higher profit and social welfare.

Taxation, redistribution and observability in social dilemmas

Daniel A. Brent, Lata Gangadharan, Anca Mihut, Marie Claire Villeval, Working paper GATE 2017-26
In the presence of social dilemmas, cooperation is more difficult to achieve when populations are heterogeneous because of conflicting interests within groups. We examine cooperation in the context of a non-linear common pool resource game, in which individuals have unequal extraction capacities and have to decide on their extraction of resources from the common pool. We introduce monetary and nonmonetary policy instruments in this environment. One instrument is based on two variants of a mechanism that taxes extraction and redistributes the tax revenue. The other instrument varies the observability of individual decisions. We find that the two tax and redistribution mechanisms reduce extraction, increase efficiency and decrease inequality within groups. The scarcity pricing mechanism, which is a per-unit tax equal to the marginal extraction externality, is more effective at reducing extraction than an increasing block tax that only taxes units extracted above the social optimum. In contrast, observability impacts only the Baseline condition by encouraging free-riding instead of creating moral pressure to cooperate.

Unethical Behavior and Group Identity in Contests

Julien Benistant, Marie Claire Villeval, Working paper GATE 2017-25
Using a real-effort experiment, we studied how minimal group identity affects unethical behavior in a contest game. We varied (i) whether individuals had to report their own output or the output of their competitor, (ii) whether group identity was induced or not, and (iii) whether pairs of competitors shared the same group identity or not. We show that individuals misreported in the same proportion and to the same extent by inflating their output or by decreasing their opponent’s output. Misreporting was affected neither by the competitor’s group identity nor by the individual’s beliefs about misreporting. This suggests that in such competitive settings, unethical behavior is mainly driven by an unconditional desire to win.

Do quotas help women to climb the career ladder ? A laboratory experiment

Valeria Maggian, Natalia Montinari, Antonio Nicolò, Working paper GATE 2017-24
Women are underrepresented in leadership positions in business, politics, and in the academic and scientific community. Not taking advantage of the skills of highly qualified women constitutes a waste of talent and, consequently, a loss of economic growth potential. To design effective policy interventions that empower women to reach leadership positions, it is crucial to identify at which levels of the career ladder they should be introduced. In a laboratory experiment, we run a two-stage tournament to evaluate the impact of three different interventions on women’s willingness to compete for top positions. We find that, compared with no intervention, a gender quota introduced at the initial stage is ineffective in encouraging women to compete for the top, while quotas introduced in the final stage of competition or in both stages increase women’s willingness to compete for the top, without distorting the performance of the winners.

The Distribution of Power in the Lebanese Parliament Revisited

Mostapha Diss, Frank Steffen, Working paper GATE 2017-23
The governance structure of the Lebanese Republic is particularly characterized byits confessional nature guaranteeing a pre-defined representation of Christians andMuslims and its sectarian subgroups in parliament. In this sense, the composition of the parliament is based on the allocation of a specific number of seats to each of the two major religious groups and its sectarian subgroups. However, the ratio being used to assign seats to these sectarian subgroups has been an intensively debated controversial issue over decades. Recently, Diss and Zouache (2015) have addressed some aspects of power in the Lebanese Parliament. Applying the Penrose-Banzhaf and Shapley-Shubik indices, they investigate the relative confessional power distributions under the current seat distribution and a proposal for its amendment and revealed some paradoxical effects. Since then a new electoral law has been introduced for the Lebanese Parliament. In this paper, we re-examine the results of Diss and Zouache (2015) applying the Penrose-Banzhaf measure. Furthermore, we take into account the effects of the new electoral law and the seat distribution prior to the current one. This allows us to relate our findings to the general motivations for the electoral reforms underlying all studied seat distributions. Additionally, we address the implications of the existing party blocs in the current parliament from a party and confessional perspective. Currently, their existence is put into question in the public and political discussion. With our analysis, we deliver a theoretical foundation for this debate and demonstrate that in terms of parliamentary power the current bloc formation is a priori disadvantageous.

Accessibility, absorptive capacity and innovation in European urban areas

Clément Gorin, Working paper GATE 2017-22
Empirical studies on the geography of innovation have established that skilled workers’ mobility and collaboration networks shape the diffusion of knowledge across firms and regions. At the same time, the literature on absorptive capacity insisted on the importance of local research capabilities to take advantage of knowledge developed elsewhere. This paper investigates both phenomena in an integrated framework by assuming that mobility and networks provide access to knowledge, but the proportion of accessible knowledge effectively used for innovation depends on absorptive capacity. Such complementaries in regional research efforts are effectively captured using a spatial Durbin model in which the connectivity structure stems from mobility and collaboration patterns. Results suggest the relative importance of these two channels in the diffusion of knowledge, and suggests that human capital increases absorptive capacity. These findings have implications for the geography of innovation. While greater accessibility encourages convergence, the notion of absorptive capacity implies a self-reinforcing effect leading to divergence.

Why are Private Forest Owners not Adopting Natura 2000 ? A Survey of Motivations

Philippe Polomé, Claude Michel, Working paper GATE 2017-21
A survey of private forest owners on adoption of the Natura 2000 charter has been designed to allow respondents to state motives for non-adoption. These motives fall into five main categories : Economic, Compatibility with own practices, Control over one’s property, Information and “no motive”. Using a mixed logit model, we can show that owners of properties at least in part in N2000, significantly evoke the Control motive more often than the other owners ; that is not the case of the other motives. Owners who are convinced their properties have a remarkable feature are significantly less likely to evoke the Control motive. We argue that these findings might be appropriated by environmental managers to induce adoption of the N2000 Charter.

Exclusion and Reintegration in a Social Dilemma

Alice Solda, Marie Claire Villeval, Working paper GATE 2017-20
The existing literature on ostracism in social dilemma games has focused on the impact of the threat of exclusion on cooperation within groups but so far, little attention has been paid to the behavior of the excluded members after their reintegration. This paper studies the effect of exclusion by peers followed by reintegration on cooperation once excluded individuals are readmitted in their group. Using a negatively framed public good game, we manipulate the length of exclusion and whether this length is imposed ex-ogenously or results from a vote. We show that people are willing to exclude the least cooperators although it is not an equilibrium strategy. Exclusion has a positive impact on cooperation and compliance to the group norm of withdrawal after reintegration when exclusion is followed by a quick rather than a slow reintegration and that the length of exclusion is chosen by the group. In this environment, a quicker reintegration also limits retaliation. Post-exclusion cooperation and forgiveness de end not only on the length of exclusion but also on the perceived intentions of others when they punish.

When Foul Play Seems Fair : Exploring the Link between Just Deserts and Honesty

Fabio Galeotti, Reuben Kline, Raimondello Orsini, Working paper GATE 2017-19
The distributive justice norm of “just deserts” — i.e. the notion that one gets what one deserves — is an essential norm in a market society, and honesty is an important factor in economic and social exchange. We experimentally investigate the effect of violations of the distributive justice norm of “just deserts” on honesty in a setting where behaving dishonestly entails income redistribution. We find that the violation of the just deserts norm results in a greater propensity toward dishonesty. We then test a more general proposition that violations of just deserts induce dishonesty, even in cases where dishonesty does not have redistributive consequences. Our results confirm this proposition but only for cases in which the v iolation of just deserts also entails income inequality.

De nouveaux éclairages sur le théorème de Coase et la vacuité du cœur

Stéphane Gonzalez, Alain Marciano, Working paper GATE 2017-18
Cet article contribue à la littérature sur les conditions de validité du théorème" de Coase. En modélisant sous la forme d’un jeu coopératif des situations de négociations entre un pollueur et deux pollués, nous affinons les conditions sous lesquelles le coeur associé est non vide. Premièrement, nous montrons que la (non)vacuité du coeur dépend des règles de responsabilités et de la répartition des droits. Deuxièmement, nous montrons que lorsque l’externalité est non-transférable, le coeur est non vide si le pollueur est non responsable mais que le coeur est toujours non vide lorsque le pollueur est responsable et ne peut polluer qu’après avoir obtenu l’accord unanime de ses victimes. Nous construisons des contre-exemples à la non-vacuité du coeur dans toutes les autres situations. Enfin, nous montrons que si l’externalité est non-transférable, alors un individu qui ne participe pas à une négociation peut malgré tout en influencer le résultat.

Collaborateurs, emplois familiaux et niveau d’activité des parlementaires français

Benjamin Monnery, Working paper GATE 2017-17
Cet article profite de la récente publication, à la suite de l’ “affaire Fillon”, d’une liste exhaustive des collaborateurs employés par l’ensemble des 920 parlementaires français actuels, pour mesurer l’emploi de membres de la famille par les députés et sénateurs. En rapprochant ces informations aux données démographiques et politiques des parlementaires, on en tire quelques enseignements sur le profil-type des élus ayant recours à des emplois familiaux. Enfin, en croisant ces statistiques avec les données publiques disponibles sur l’activité des parlementaires observée sur les 12 derniers mois, on montre que les parlementaires qui emploient comme collaborateurs des membres de leur famille sont en moyenne significativement moins présents, moins actifs et moins productifs à l’Assemblée et au Sénat que les autres, toutes choses égales par ailleurs. Ce résultat suggère soit que l’emploi de collaborateurs familiaux (en substitution d’autres collaborateurs) réduit l’activité du parlementaire (effet causal), soit que les parlementaires qui emploient un membre de leur famille sont par ailleurs des élus relativement peu actifs au Parlement (effet de sélection). Des estimations par variable instrumentale semblent plutôt privilégier la deuxième hypothèse.

Electoral fraud and voter turnout : An experimental study

Vardan Baghdasaryan, Giovanna Iannantuoni, Valeria Maggian, Working paper GATE 2017-16
In this paper we experimentally investigate the consequences of electoral fraud on voter turnout. The experiment is based on a strategic binary voting model where voters decide whether to cast a costly vote in favour of their preferred candidate or to abstain. The minority candidate can illicitly influence the electoral process by applying ballot-box stuffing. In the experiment we implement two different framings : we compare voter turnout in a neutral environment and with framed instructions to explicitly replicate elections. This approach enables to both test the model’s predictions and to estimate the framing effects of voting and fraud. Comparison of experimental results
with theoretical predictions reveals over-voting, which is exacerbated when fraud occurs. Turnout increases as predicted with moderate level of fraud while, with higher electoral fraud, voters fail to recognize that the existence of a relatively larger number of "agents" voting with certainty considerably decreases the benefits of voting.
Importantly, framing matters, as revealed by the higher turnout of those in the majority group, against which the fraud is applied.

The spillover effects of gender quotas on dishonesty

Valeria Maggian, Natalia Montinari, Working paper GATE 2017-15
We experimentally test for spillover effects of gender quotas on subsequent unrelated, unethical behavior. We find that introducing quotas has no systematic effect on unethical behavior for both genders. High performing, competitive females are more likely to display unethical behavior than their male counterparts.

Aiming to choose correctly or to choose wisely ? The optimality-accuracy trade-off in decisions under uncertainty

Thomas Garcia, Sébastien Massoni, Working paper GATE 2017-14
When making a decision under uncertainty, individuals aim to achieve opti- mality. In general, an accurate decision is optimal. However, in real life situations asymmetric stakes induce an unusual divergence between optimality and accuracy. We highlight this optimality-accuracy trade-off and study its origins using two experiments on perceptual decision making. We use Signal Detection Theory as a normative benchmark. The first experiment confirms the existence of an optimality-accuracy trade-off with a leading role of accuracy. The second experiment explains this trade-off by the concern of people for being right.

Local Development and the Decision to Migrate : Evidence from Mexican Migration to the US

Tatiana Martinez Zavala, Working paper GATE 2017-13
The Mexican migration phenomenon is one of the largest and most studied in the literature. Despite the fact that intrinsic motivations of migrants as well as the effect of the US migration policies have been thoroughly revised, there seems to be little evidence regarding the effect of the Mexican government’s role. Motivated by a simple game theoretic model, this paper’s objective is to stress the importance of the Mexican authorities in determining the migration decision by exploiting the heterogeneity in local development outcomes to estimate the probability of migrating. To control for unobservable characteristics of migrants, a willingness to migrate variable is used. The results suggest that the domestic government should not be disregarded when studying migration patterns.

Speculation rather than enterprise ? Keynes’ beauty contest revisited in theory and experiment

Kene Boun My, Camille Cornand, Rodolphe Dos Santos Ferreira, Working paper GATE 2017-12
In Keynes’ beauty contest, agents make evaluations reflecting both an expected fundamental value and the conventional value expected to be set by the market. They thus respond to fundamental and coordination motives, respectively, the prevalence of either being set exogenously. Our contribution is twofold. First, we propose a valuation game in which agents strategically choose how to weight each motive. This game emphasises public information leads agents to favour the coordination motive. Second, we test the game through a laboratory experiment. Subjects tend to conform to theoretical predictions, except when fundamental uncertainty is low relative to strategic uncertainty.

Gender and Peer Effects on Performance in Social Networks

Julie Beugnot, Bernard Fortin, Guy Lacroix, Marie Claire Villeval, Working paper GATE 2017-11
We investigate whether peer effects at work differ by gender and whether gender differences in peer effects -if any- depend on work organization. We develop a social network model with gender heterogeneity that we test in a real-effort laboratory experiment. We compare sequential networks in which information flows from peers to the worker and simultaneous networks where it disseminates bi-directionally. We identify strong gender differences as females disregard their peers’ performance in simultaneous networks, while males are influenced by peers in both networks. Females may perceive the environment in simultaneous networks as being more competitive than in sequential networks.

On the properties of non-monetary measures for risks

Christophe Courbage, Henri Loubergé, Béatrice Rey, Working paper GATE 2017-10
This paper investigates how welfare losses for facing risks change as the risk environment of the decision-maker is altered. To that aim, we define the risk apportionment of order n (RA-n) utility premium as a measure of pain associated with facing the passage from one risk to a riskier one. Changes in risks are expressed through the concept of stochastic dominance of order n. Three configurations of risk exposures are considered. The paper first shows how the RA-n utility premium is modified when initial wealth becomes riskier. Second, the paper provides conditions on individual preferences for superadditivity of the RA-n utility premium. Third, the paper investigates welfare changes of merging increases in risks. These results offer new interpretations of the sign of higher derivatives of the utility function.

Productivity gains from agglomeration and migration in Chinese cities over 2002-2013

Pierre-Philippe Combes, Sylvie Démurger, Shi Li, Working paper GATE 2017-09
We evaluate the evolution of productivity gains from Chinese cities over time, from 2002 to 2013. In 2002, rural migrants were exerting a strong positive externality on natives’ earnings, which were also higher when access to foreign markets through access to sea was higher. In 2007 and then further in 2013, city size (employment density but also land area) has become the crucial determinant of productivity whereas market access, internal or external, plays no direct role. Rural migrants still enhance natives’ earnings, though the effect is more than half lower than in 2002. Urban gains, and their evolution over time, are very similar on total and per hour earnings. Skilled workers and females seem to gain slightly more from cities than unskilled workers and males.

Episodes of War and Peace in an Estimated Open Economy Model

Stéphane Auray, Aurélien Eyquem, Working paper GATE 2017-08
We analyze the effects of world wars on the macroeconomic dynamics of the U.S., France, Germany, and the UK, by means of an estimated open-economy model. The model allows wars to affect the economy through capital depreciation, sovereign default, a military draft, household preferences, and spillovers on other exogenous processes (productivity, investment, trade, policy variables). If the bulk of fluctuations during war episodes can be explained by the rise in government spending in the U.S., other factors are crucial in other countries. We also discuss the size and state-dependence of public spending multipliers, and a counterfactual welfare exercise.

On the Role of Debt Maturity in a Model with Sovereign Risk and Financial Frictions

Stéphane Auray, Aurélien Eyquem, Working paper GATE 2017-07
We develop a model with financial frictions and sovereign default risk where the maturity of public debt is allowed to be larger than one period. When the debt portfolio has longer average maturities, public debt increases less in the event of a crisis, reducing the size of the subsequent fiscal consolidation through distorsionary taxes or public spending, with positive effects on welfare. In addition, we provide some results suggesting that optimized fiscal responses to a crisis depend on the average maturity of the debt portfolio.

Competitive Tax Reforms in a Monetary Union with Endogenous Entry and Tradability

Stéphane Auray, Aurélien Eyquem, Xiaofei Ma, Working paper GATE 2017-06
We quantify the effects of competitive tax reforms within a two-country monetary union model with endogenous entry and endogenous tradability. As expected, their effects on out-put, consumption, hours worked and the terms of trade are positive. Extensive margins provide additional transmission mechanisms that turn the response of foreign output from negative to positive and yields larger aggregate welfare gains compared to
alternative models. These positive spillovers are due to the positive effect of the reform on variety creation in both countries and change our vision of this type of reform from beggar-thy-neighbor to prosper-thy-neighbor.

The wrong man for the job : biased beliefs and job mismatching

Valeria Maggian, Antonio Nicoló, Working paper GATE 2017-05
In this paper we build a theoretical model to show the role of self-confidence in leading to inefficient job matching equilibria : underconfident highly-qualified workers do not apply for highly-skilled jobs, because mistakenly perceive themselves as having relatively lower abilities with respect to other candidates, and firms are no longer selecting their workers from a pool containing the best fitted ones. Policies to foster underconfident workers to apply for highly-skilled jobs cannot easily be implemented, because under-confidence is not an observable characteristic, and any attempt to elicit this information from workers can be easily manipulated. However, if gender is correlated with this psychological bias, and there more underconfident female workers than male workers, a second best policy based on gender affirmative action may enhance the efficiency of matching in the job market. We show that increasing the gender diversity of the qualified applicants by imposing an affirmative action may positively affect the selection of candidates because it increases the average quality of the pool of candidates for high-qualified jobs.

Cooperation in a risky world

Vincent Théroude, Adam Zylbersztejn, Working paper GATE 2017-04
We study the effect of environmental risk on cooperation in the Voluntary Contribution Mechanism. Our baseline is the standard setting in which the personal return from the public good is deterministic, homogeneous, and publicly known. Our experimental treatments alter this classic design by making the marginal per capita return from the public good probabilistic. In the homogeneous risk treatment, the random draw is made for the whole group, while in the heterogeneous risk treatment this happens independently for each group member. Our main result is that risk does not harm cooperation either in the one-shot or in the finitely repeated version of the game. This suggests that the standard experimental methodology provides a robust and conservative measure of human cooperation.

The formation of partnerships in social networks

Francis Bloch, Bhaskar Dutta, Stéphane Robin, Min Zhu, Working paper GATE 2017-03
This paper analyzes the formation of partnerships in social networks. Agents randomly request favors and turn to their neighbors to form a partnership. If favors are costly, agents have an incentive to delay the formation of the partnership. In that case, for any initial social network, the unique Markov Perfect equilibrium results in the formation of the maximum number of partnerships when players become infinitely patient. If favors provide benefits, agents rush to form partnerships at the cost of disconnecting other agents and the only perfect initial networks for which the maximum number of partnerships are formed are the complete and complete bipartite networks. The theoretical model is tested in the lab. Subjects generally play according to their equilibrium strategy and the efficient outcome is obtained over 78% of the times. Decisions are affected by the complexity of the network. Two behavioral rules are observed during the experiment : subjects accept the formation of the partnership too often and reject partnership offers when one of their neighbors is only connected to them.

Matching in the Large : An Experimental Study

Yan Chen, Ming Jiang, Onur Kesten, Stéphane Robin, Min Zhu, Working paper GATE 2017-02
Market size has been predicted to play an influential role in a broad class of environments. We study performance of the Boston and the Deferred Acceptance (DA) mechanism in a laboratory where we increase the market size. Our results show that increasing the market size from 4 to 40 students per match increases participant truth-telling under the DA but decreases it under the Boston mechanism, leading to a decrease in efficiency for both mechanisms but no change in the large stability advantage of the DA over the Boston mechanism. We then further increase the market size to 4,000 by introducing robots. When humans play truthful robots (without strategic uncertainty), we find that scale has no effect on best response behavior. However, when humans play empirical robots (with strategic uncertainty), scale increases best responses under both mechanisms, which is likely due to the increase in the precision of subjects’ beliefs about others’ strategies.

Education In Extreme Environments, Does Mother’s Education Still Matter ?

Samia Badji, Working paper GATE 2017-01
This paper looks at child stunting, wasting, underweight and mid-upper arm circumference in the particular context of Internally Displaced Person Camps in Somalia, the country with one of the highest number of IDPs in the world. The focus is on maternal education and two questions are addressed. First, whether the effect of
mother education differs inside and outside camps. Second, if the relative advantage of educated mothers over their uneducated counterpart dissipates with time in the camp. Results show a slightly stronger effect of maternal education in the camp for short-to-middle-term health outcomes.The relative advantage of educated mothers increases with time in the camp. In a context of destitution and dependence, the analysis highlights the role played by maternal education not only as a way to improve child health but also as a factor of resilience

2016

The Wealth Paradox for Whom ? Child Labor and the Identification of Households Excluded from the Land and the Labor Markets in Madagascar

Samia Badji, Working paper GATE 2016-38
The paper aims at identifying households who have their children work more because their access is constrained on the land and the labor markets. Data from the 2005 "Enquête auprès des Ménages" (EPM) collected in Madagascar provide information on the amount of hours worked by each household member along with measures for market imperfections. A simple theoretical model highlights that land should not influence the number of hours of child work when the household can fully access the land or the labor markets. When the access is limited in both markets, land may impact the amount of child work whereas the external wage should not. Using a switching regression model with unknown sample separation to classify households in the two regimes (constrained or not), this paper shows that not belonging to the largest ethnic group at the local level significantly decreases access to the market. The same result holds for religion, thereby highlighting the importance of the informal market.

The Production Function for Housing : Evidence from France

Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon, Working paper GATE 2016-37
We propose a new nonparametric approach to estimate the production function for housing. Our estimation treats output as a latent variable and relies on the firstorder condition for profit maximisation with respect to nonland inputs by competitive house builders. For parcels of a given size, we compute housing by summing across the marginal products of nonland inputs. Differences in nonland inputs are caused by differences in land prices that reflect differences in the demand for housing across locations. We implement our methodology on newlybuilt singlefamily homes in France. We find that the production function for housing is reasonably well, though not perfectly, approximated by a CobbDouglas function and close to constant returns. After correcting for differences in user costs between land and nonland inputs and taking care of some estimation concerns, we estimate an elasticity of housing production with respect to nonland inputs of about 0.80.

Ce que le vote par approbation révèle des préférences des électeurs français

Isabelle Lebon, Antoinette Baujard, Frédéric Gavrel, Herrade Igersheim, Jean-François Laslier, Working paper GATE 2016-36
Cet article vise à déterminer une répartition, le long d’un axe politique, des candidats à l’élection présidentielle de 2012 qui soit fondée sur les opinions exprimées par les électeurs à travers une expérimentation de vote par approbation, plutôt que sur un positionnement a priori. L’axe endogène représentatif du paysage politique obtenu s’avère correspondre à un axe gauche-droite classique. Cependant, des analyses plus précises du comportement des électeurs remettent en cause l’hypothèse d’unimodalité des préférences politiques qui est généralement associée à cette structure. En particulier, l’attitude qui consiste à approuver simultanément des candidats situés des deux côtés de l’échiquier politique mais sans soutenir les candidats intermédiaires sur l’axe est largement répandue, et nettement plus fréquente chez les hommes que chez les femmes.

Mother’s Education and Increased Child Survival in Madagascar : What Can We Say ?

Samia Badji, Working paper GATE 2016-35
This paper aims to assess whether a causal effect exists between maternal education and child survival in Madagascar. The omission of factors such as mother’s health, innate ability and time preferences could lead to an overestimation of the true effect of education. The case of sub-Saharan Africa where child mortality rates are the highest, is overlooked by most of the causal evidence gathered so far for developing countries. The present paper attempts to redress this omission through the adoption of a careful empirical strategy. The analysis sheds light on the mechanisms at stake based on information on hygiene practices, housing conditions and the health care administered before, during and after childbirth. The results demonstrate that mothers’ education has a positive and strong effect on their offsprings’ survival probabilities. Wealth on its own has a strong effect but seems to account for only a third of the effect of maternal education.

The Spillover Effects of Affirmative Action on Competitiveness and Unethical Behavior

Ritwik Banerjee, Nabanita Datta Gupta, Marie Claire Villeval, Working paper GATE 2016-34
We conduct an artefactual field experiment to examine various spillover effects of Affirmative Action policies in the context of castes in India. We test a) if individuals who compete in the presence of Affirmative Action policies remain competitive in the same proportion after the policy has been removed, and b) whether having been exposed to the policy generates unethical behavior and spite against subjects from the category who has benefited from the policy. We find that these policies increase substantially the confidence of the lower caste members and motivate them to choose significantly more frequently a tournament payment scheme. However, we find no spillover effect on confidence and competitiveness once Affirmative Action is withdrawn : any lower caste’s gain in competitiveness due to the policy is then entirely wiped out. Furthermore, the strong existing bias of the dominant caste against the lower caste is not significantly aggravated by Affirmative Action.

La question du vote. Expérimentations en laboratoire et In Situ

Herrade Igersheim, Antoinette Baujard, Jean-François Laslier, Working paper GATE 2016-33
Cet article est une revue de la littérature sur les expérimentations de vote qui étudient les comportements des votants et les propriétés des modes de scrutin. Tout d’abord, nous décrivons les expérimentations menées en laboratoire autour de trois aspects principaux : résultats agrégés selon le mode de scrutin, vote stratégique, paradoxe du vote. Nous abordons ensuite les expérimentations In Situ, typiques de l’étude expérimentale du vote, consistant à tester en marge d’élections officielles d’envergure des méthodes de vote alternatives. Nous étudions le protocole expérimental, deux enseignements généraux –l’accueil et les réactions des électeurs– ainsi que deux enseignements spécifiques –la comparaison des résultats agrégés et la description de l’offre politique telle que perçue par les électeurs.

Another perspective on Borda’s paradox

Mostapha Diss, Abdelmonaim Tlidi, Working paper GATE 2016-32
This paper presents the conditions required for a profile in order to never exhibit either the strong or the strict Borda paradoxes under all weighted scoring rules in three-candidate elections. The main particularity of our paper is that all the conclusions are extracted from the differences of votes between candidates in pairwise majority elections. This way allows us to answer new questions and provide an organized knowledge of the conditions under which a given profile never shows one of the two paradoxes.

Loss Aversion and lying behavior : Theory, estimation and empirical evidence

Ellen Garbarino, Robert Slonim, Marie Claire Villeval, Working paper GATE 2016-31
We theoretically show that loss-averse agents are more likely to lie to avoid receiving a low payoff after a random draw, the lower the ex-ante probability of this bad outcome. The ex-ante expected payoff increases as the bad outcome becomes less likely, and hence the greater is the loss avoided by lying. We demonstrate robust support for this theory by reanalyzing the results from the extant literature and with two new experiments that vary the outcome probabilities and are run doubleanonymous to remove reputation effects. To measure lying, we develop an empirical method that estimates the full distribution of dishonesty

Moral Judgments, Gender, and Social Preferences : An Experimental Study

Juergen Bracht, Adam Zylbersztejn, Working paper GATE 2016-30
We study questionnaire responses to moral dilemmas hypothetical situations in which sacrificing one life may save many other lives. We demonstrate gender differences in moral judgments : male participants are more supportive of the sacrifice than female participants. We investigate the importance of the previously studied source of the endorsement of the sacrfice : antisocial attitudes. First, we elicit the individual proneness to spiteful behavior using an incentivized experimental game. We demonstrate that spitefulness can be sizable but it is not associated with gender. Second, we find that gender is associated with moral judgments even when we account for individual differences in antisocial attitudes. Our results suggest that the performance of many institutions (related to the distribution of wealth or punishment, for instance) may be affected by the gender of the decision-makers.

The effect of sequentiality and heterogeneity in network formation games

Liza Charroin, Working paper GATE 2016-29
In the benchmark model of Bala and Goyal (2000) on network formation, the equilibrium network is asymmetric and unfair as agents have different payoffs. While they are prominent in reality, asymmetric networks do not emerge in the lab mainly because of fairness concerns. We extend this model with a sequential linking decision process to ease coordination and with heterogeneous agents. Heterogeneity is introduced with the presence of a special agent who has either a higher monetary value or a different status. The equilibrium is asymmetric and unfair. Our experimental results show that thanks to sequentiality and fairness concerns, individuals coordinate on fair and efficient networks in homogeneous settings. Heterogeneity impacts the network formation process by increasing the asymmetry of networks but does not decrease the level of fairness nor efficiency.

Goal Setting in the Principal-Agent Model : Weak Incentives for Strong Performance

Brice Corgnet, Joaquín Gómez-Miñambres, Roberto Hernán-Gonzalez, Working paper GATE 2016-28
We study a principal-agent framework in which principals can assign wage-irrelevant goals to agents. We find evidence that, when given the possibility to set wage-irrelevant goals, principals select incentive contracts for which pay is less responsive to agents’ performance. We show that average performance of agents is higher in the presence of goal setting than in its absence despite weaker incentives. We develop a principal-agent model with reference-dependent utility that illustrates how labor contracts combining weak monetary incentives and wage-irrelevant goals can be optimal. It follows that recognizing the pervasive use of non-monetary incentives in the workplace may help account for previous empirical findings suggesting that firms rely on unexpectedly weak monetary incentives.

What Makes a Good Trader ? On the Role of Intuition and Reflection on Trader Performance

Brice Corgnet, Mark DeSantis, David Porter, Working paper GATE 2016-27
Using simulations and experiments, we pinpoint two main drivers of trader performance : cognitive reflection and theory of mind. Both dimensions facilitate traders’ learning about asset valuation. Cognitive reflection helps traders use market signals to update their beliefs whereas theory of mind offers traders crucial hints on the quality of those signals. We show these skills to be complementary because traders benefit from understanding the quality of market signals only if they are capable of processing them. Cognitive reflection relates to previous Behavioral Finance research as it is the best predictor of a trader’s ability to avoid commonly-observed behavioral biases.

Impact sur l’emploi de la participation aux projets de R&D des pôles de compétitivité. Méthode et résultats

Magali Chaudey, Marion Dessertine, Working paper GATE 2016-26
Depuis leur mise en place en 2005, les pôles de compétitivité se présentent comme un instrument structurant de la politique industrielle française. A partir de la mise en oeuvre d’un modèle d’évaluation bien identifié dans la littérature, ce travail propose une estimation quantifiée de l’effet des pôles de compétitivité sur l’emploi des entreprises participant aux projets de R&D des pôles. Cette observation est menée à partir de la construction d’une base de données originale et la mobilisation d’une méthode d’évaluation en double différence. Cet article conclut à un effet positif et significatif des pôles de compétitivité français sur l’emploi.

The Portfolio Rebalancing Channel of Quantitative Easing

Valentin Jouvanceau, Working paper GATE 2016-25
This paper analyzes the portfolio rebalancing channel of Quantitative Easing (QE hereafter) interventions. First, we identify the effects of a QE shock using a Bayesian VAR on US data using a sign and zero restrictions identification scheme. We find that QE shocks have substantial effects on corporate spreads with different ratings, supportive of a portfolio rebalancing channel. Second, we build a DSGE model with a securitzation mechanism. We confront the resulting impulse response functions to those uncovered by our VAR analysis, and find a fairly good match. Finally, we show that the portfolio rebalancing channel crucially affects the transmission of QE shocks to real economy.

Sub-metropolitan Tax Competition with Household and Capital Mobility

Tidiane Ly, Working paper GATE 2016-24
This paper investigates the efficiency properties of tax competition between submetropolitan jurisdictions when capital, residents and workers are mobile, and both households and firms compete for local land markets. We analyze two decentralized equilibria : (1) with a local tax on residents and two separate local taxes on capital and land inputs, efficiency is achieved and the existence of a marginal fiscal cost due to residents’ mobility is revealed ; (2) combination of the taxes on capital and land inputs into a single business property tax leads local authorities to charge inefficiently high taxation on capital. We show that capital mobility induces a reduction in the business land taxation and local public inputs are used to offset the distorting effects of the property tax, accounting for the distorting impact of workers’ mobility.

Observing and shaping the market : the dilemma of central banks

Romain Baeriswyl, Camille Cornand, Bruno Ziliotto, Working paper GATE 2016-23
While the central bank observes the market activity to assess economic fundamentals, it shapes the market outcome through its policy interventions. The more the central bank influences the market, the more it spoils the informational content of economic aggregates. How should the central bank act and communicate when it derives its information from observing the market ? This paper analyses the optimal central bank’s action and disclosure under endogenous central bank’s information for three operational frameworks : pure communication, action and communication, and signaling action. When the central bank takes an action, it would be optimal for the central bank to be fully opaque to prevent its disclosure from deteriorating the information quality of market outcomes. However, in the realistic case where central bank’s action is observable, it may be optimal to refrain from implementing any action.

Counterfactual approach with survival or time to event outcomes : An application to an exhaustive cohort of Epithelial Ovarian Carcinoma in the Rhône-Alps region of France

Marius Huguet, Lionel Perrier, Olivia Ballyc, Xavier Joutard, Nathalie Havet, Fadila Farsi, David Benayoun, Pierre de Saint Hilaire, Dominique Beal Ardisson, Magali Morelle, Isabelle Ray-Coquard, Working paper GATE 2016-22
Epithelial Ovarian Carcinoma (EOC) is a disease with poor prognosis, most often diagnosed at an advanced stage, thus necessitating aggressive and complex surgery. The aim of this study was to compare Progression Free Survival (PFS) at 1st line treatment of EOC patients treated in high vs low-volume hospitals. This retrospective study using prospectively implemented databases was conducted on an exhaustive cohort of 267 patients treated in first line during 2012 in the Rhone-Alps Region of France. In order to control for selection bias, a multivariate analysis and the Inverse Probability Weighting (IPW) using the propensity score were adopted. An Adjusted Kaplan Meier Estimator (AKME) and a univariate Cox model in the weighted sample were then applied in order to determine the impact of the centralization of care on EOC. Patients treated in lower volume hospitals had a probability of relapse (including death) that was 1.5 times higher than for patients treated in higher volume hospitals (p=0.02). As reported in other countries, the concentration of care for EOC has a significant positive impact on patient outcomes.

Optimal Deterrence of Cooperation

Stéphane Gonzalez, Aymeric Lardon, Working paper GATE 2016-21
We introduce axiomatically a new solution concept for cooperative games with transferable utility inspired by the core. While core solution concepts have investigated the sustainability of cooperation among players, our solution concept, called contraction core, focuses on the deterrence of cooperation. The main interest of the contraction core is to provide a monetary measure of the robustness of cooperation into the grand coalition. We motivate this concept by providing optimal fine imposed by competition authorities for the dismantling of cartels in oligopolistic markets. We characterize the contraction core on the set of balanced cooperative games with transferable utility by four axioms : the two classic axioms of non-emptiness and individual rationality, a superadditivity principle and a new axiom of consistency

Does trade liberalization trigger tax competition ? Theory and evidence from OECD countries

Nelly Exbrayat, Working paper GATE 2016-20
This article aims at assessing the empirical relevance of New Economic Geography models of tax competition. We rely on a simple model to specify tax reactions functions, which we estimate with a panel covering (up to) 26 OECD countries over the period 1982 to 2006. We provide striking support for the two main predictions regarding the slope and the constant of the reaction function : national governments seem to adjust their corporate tax rate towards the level chosen in countries that are more populated, and they tend to set higher corporate tax rates when their country enjoys a high real market potential. Through the latter effect, trade integration exerts a positive influence on the level of corporate taxation. However, using a theoretically grounded index of bilateral trade integration, we also show that trade liberalization gives rise to significant tax interactions in the setting of effective average tax rates in the case of European countries, thus exerting a downward pressure on corporate tax rates.

Forest Owners Motivations for Adopting Programs of Biodiversity Protection

Philippe Polomé, Working paper GATE 2016-19
The results of a survey of private forest owners on adoption of a number of current programs, that include biodiversity protection to some degree, are presented. Adoption amounts to 22% for all the programs jointly, and is shown to depend on economic, social and ethical motives, with significant crowding-out between the economic and ethical motives, but not with social motives. Adoption of each program is strongly negatively correlated to each other. Nearly no respondent adopted the Natura 2000 program. The results constitute a test of the “reputational crowding-out” theory of Bénabou and Tirole (2006)

Can transparency of information reduce embezzlement ? Experimental Evidence from Tanzania

Salvatore Di Falco, Brice Magdalou, David Masclet, Marie Claire Villeval, Marc Willinger, Working paper GATE 2016-18
Embezzlement is a major concern. By means of a sequential dictator game, we investigate theoretically and experimentally whether making information more transparent and reducing the number of intermediaries in transfer chains can reduce embezzlement. Consistent with reference-dependent preferences in terms of moral ideal, we show that the impact of transparency is conditional on the length of the transfer chain and on the position of the intermediary in the chain. Its direct effect on image encourages honesty. Its indirect effect via expectations plays in the opposite direction, motivating intermediaries to embezzle more when expecting that the following intermediary will embezzle less.

A step further in the theory of regional integration : A look at the Unasur’s integration strategy

Andrea Bonilla Bolaños, Working paper GATE 2016-17
Although economic literature about regional integration is substantial, its definition remains controversial. For instance, it is common nowadays for the terms regional integration and regional economic integration to be used interchangeably in spite of the importance accorded by literature to non-economic factors of integration, particularly to political ones. Inspired on the South American integration project, this paper revisits the theory of regional integration and proposes a novel approach for evaluating regional integration initiatives that include not only political but also physical aspects. More specifically, this article proposes to analyze any regional integration project from three complementary angles : economic integration, political integration, and physical integration. Moreover, it argues that political and physical integration constitute a preliminary, or contemporaneous, step toward economic
integration, and not a final stage, as the current debate suggest. In other words, it is argued that a zero-stage in (Balassa, 1961)’s theory of economic integration is needed to enable the long-term sustainability of a regional bloc.

Band or Point Inflation Targeting ? An Experimental Approach

Camille Cornand, Cheick Kader M’baye, Working paper GATE 2016-16

We conduct laboratory experiments with human subjects to test the rationale of adopting a band versus point inflation targeting regime. Within the standard New Keynesian model, we evaluate the macroeconomic performances of both regimes according to the strength of shocks affecting the economy. We find that when the economy faces small shocks, the average level of inflation as well as its volatility are significantly lower in a band targeting regime, while the output gap and interest rate levels and volatility are significantly lower in a point targeting regime with tolerance bands. However, when the economy faces large shocks, choosing the suitable inflation targeting regime is irrelevant because both regimes lead to comparable performances. These findings stand in contrast to those of the literature and question the relevance of clarifying a mid-point target within the bands, especially in emerging market economies more inclined to large and frequent shocks.

Patterns and determinants of inventors’ mobility across European urban areas

Clément Gorin, Working paper GATE 2016-15
Highly skilled professionals are regarded as one of the main driver for the economic development of cities through their effect on innovative capabilities. Skilled individuals are mobile in space and tend to cluster within a limited number of urban areas, therefore a crucial question is what factors shape this flows and influence the divergent levels of economic development across urban areas. Building on these considerations, this paper takes advantage of a large-scale dataset to shed light on the patterns and determinants of inventors’ mobility across European urban areas. First, a descriptive analysis is carried out to document the dynamics of inventors’ mobility and their spatial dimension. Second, a gravity model is used to analyse how job opportunities and socio-professional networks influence the flows of inventors between urban areas. From a methodological perspective, this paper uses a spatial filtering variant of the Poisson gravity model, which accommodate the nature of the data, while controlling for multilateral resistance and spatial autocorrelation in mobility flows. The descriptive analysis suggest that inventors’ mobility occurs primarily between relatively large and collocated urban areas, partly because of the high level of circular and intra-firm mobility. The econometric analysis shows that employment opportunities, social networks, as well as various forms of proximity are important determinants of inventors’ mobility.

Spatial strategies in Brazilian Franchising ; Behavior categories and Performance Outcome

Eugenio Jose Silva Bitti, Muriel Fadairo, Cintya Lanchimba, Vivian-Lara Silva, Working paper GATE 2016-14
This empirical article deals with the location strategy and performance outcomes of franchised chains in Brazil. Brazilian franchising has experienced vertiginous process of expansion in recent years, being present in different regions of this country of continental size, including the most remote and less developed. Based on the background literature in economics and management regarding location choices and spatial competition in retailing, we use a new and unique dataset to distinguish several behavior categories in spatial strategies of franchising chains in Brazil, via a two-step cluster analysis. The performance outcomes are then studied with econometric estimations on panel data. Our results provide evidence that the choice for agglomeration, and the location in areas with a high population and a high human development index, lead to higher chain performances.

Multi-winner scoring election methods : Condorcet consistency and paradoxes

Mostapha Diss, Ahmed Doghmi, Working paper GATE 2016-13
The goal of this paper is to propose a comparison of four multi-winner voting rules, k-Plurality, k-Negative Plurality, k-Borda, and Bloc, which can be considered as generalisations of well-known single-winner scoring rules. The first comparison is based on the Condorcet committee efficiency which is defined as the conditional probability that a given voting rule picks out the Condorcet committee, given that such a committee exists. The second comparison is based on the likelihood of two paradoxes of committee elections : The Prior Successor Paradox and the Leaving Member Paradox which occur when a member of an elected committee leaves. In doing so, using the well-known Impartial Anonymous Culture condition, we extend the results of Kamwa and Merlin (2015) in two directions. First, our paper is concerned with the probability of the paradoxes no matter the ranking of the leaving candidate. Second, we do not only focus on the occurrence of these paradoxes when one wishes to select a committee of size k = 2 out of m = 4 candidates but we consider more values of k and m.

Non-Monetary Feedback Induces more Cooperation : Students and Workers in a Voluntary Contribution Mechanism

Davide Dragone, Fabio Galeotti, Raimondello Orsini, Working paper GATE 2016-12
We conduct an artefactual field experiment to study and compare the behavior of workers and students in a linear voluntary contribution mechanism in which subjects can assign immaterial sanctions or rewards to the other group members. We find that both students and workers sanction group members who contribute less than the group average, and reward those who contribute more. In both subject samples, the use of non-monetary sanctions and rewards induces more cooperation. The magnitude of the effect, however, is heterogeneous, as feedback has more impact among students who, contrary to workers, respond positively to sanctions. Students also tend to use sanctions more than workers. We discuss the implications of these findings for social cohesion, cooperative spirit and organizational efficiency in the workplace.

Growth agglomeration effects in spatially interdependent Latin American regions

Carolina Guevara, Working paper GATE 2016-11
We investigate the effect of agglomeration on regional growth in Latin America, using panel data and spatial panel data techniques. By exploring the role of development in the agglomeration-growth relationship, we find evidence of the Williamson’s hypothesis : agglomeration growth effects are magnified in less-developed regions. Moreover, we measure the spatial effects of agglomeration. They have a large geographical scope. International connections of Latin American regions are beneficial to obtain positive spatial effects of agglomeration. Nevertheless, spatial effects are stronger within countries. This finding points out the strong border effects in Latin America.

Mobilité internationale des étudiants du supérieur et débuts de vie active

Nathalie Havet, Working paper GATE 2016-10
Certains facteurs identifiables des mobilités internationales estudiantines favorisent ou au contraire entravent l’accès rapide à un premier emploi durable et de qualité ? L’exploitation économétrique d’une enquête auprès d’étudiants financés pour une mobilité au départ de la région Rhône-Alpes permet de conclure que certaines formes de mobilité (en langue anglaise, de courte durée, à caractère obligatoire, sanctionné par un diplôme) se révèlent être plus favorables à une insertion rapide et de qualité (contrat stable, salaires élevés), sans toutefois pouvoir contrebalancer l’influence de déterminants classiques tels que le niveau de diplôme, le secteur d’activité ou encore les inégalités liées au genre.

Doing Your Best when Stakes are High ? Theory and Experimental Evidence

Nicolas Houy, Jean-Philippe Nicolaï, Marie Claire Villeval, Working paper GATE 2016-09
Achieving an ambitious goal frequently requires succeeding in a sequence of intermediary tasks, some being critical for the final outcome, and others not. Individuals are not always able to provide a level of effort sufficient to guarantee success in all the intermediary tasks. The ability to manage effort throughout the sequence of tasks is therefore critical. In this paper we propose a criterion that defines the importance of a task and that identifies how an individual should optimally allocate a limited stock of exhaustible efforts over tasks. We test this importance criterion in a laboratory experiment that reproduces the main features of a tennis match. We show that our importance criterion is able to predict the individuals’ performance and it outperforms the Morris importance criterion that defines the importance of a point in terms of its impact on the probability to achieve the final outcome. We also find no evidence of choking under pressure and stress, as proxied by electrophysiological measures.

Amazonian Deforestation, Environmental Kuznets Curve and Deforestation Policy : A Cointegration Approach

Philippe Polomé, Jérôme Trotignon, Working paper GATE 2016-08
Brazilian Amazon deforestation rate is found to display a unit root and to be cointegrated with Brazilian GDP and its square – An Environmental Kuznets Curve (EKC). Although, it is not the first time that such an EKC is detected, this may be the first such time-series evidence. Detecting an EKC is hampered by several econometric issues that have been shown to lead to possibly spurious results in cross-section and panel contexts, but are satisfactorily addressed in a cointegrated (time-series) framework. Alternative theories for explaining the deforestation path are rejected. There is evidence that the “Action Plan” of the Brazilian government against deforestation had an important effect. These results are in contrast to the economics literature on an EKC in emissions such asCO2, but appear to be consistent with a geographical sciences literature that considers that deforestation declines when alternative activities become available.

The Efficiency of Crackdowns : A Lab-in-the-Field Experiment in Public Transportations

Zhixin Dai, Fabio Galeotti, Marie Claire Villeval, Working paper GATE 2016-07
The concentration of high frequency controls in a limited period of time (“crackdowns”) constitutes an important feature of many law-enforcement policies around the world. In this paper, we offer a comprehensive investigation on the relative efficiency and effectiveness of various crackdown policies using a lab-in-the-field experiment with real passengers of a public transport service. We introduce a novel game, the daily public transportation game, where subjects have to decide, over many periods, whether to buy or not a ticket knowing that there might be a control. Our results show that (a) concentrated crackdowns are less effective and efficient than random controls ; (b) prolonged crackdowns reduce fare-dodging during the period of intense monitoring but induces a burst of fraud as soon as they are withdrawn ; (c) pre-announced controls induces more fraud in the periods without control. Overall, we also observe that real fare-dodgers fraud more in the experiment than non-faredodgers.

Defaulting firms and systemic risks in financial networks

Nicolas Houy, Frédéric Jouneau, Working paper GATE 2016-06
In this paper, we use the axioms introduced in Eisenberg and Noe (2001) and Rogers and Veraart (2013) and study their consequences in terms of optimal sets of defaulting firms. We show that, from this point of view, the Absolute Priority axiom is not independent. We also show that the optimal sets of defaulting firms characterized in Eisenberg and Noe (2001) are still optimal when the Limited Payment axiom, implicit in Eisenberg and Noe (2001), is further removed. However, some other optimal sets of defaulting firms appear in this case. Finally, with the help of counterexamples, we show that no further weakening in the set of axioms considered can lead to positive results.

Cheating in the Lab Predicts Fraud in the Field : An Experiment in Public Transportations

Zhixin Dai, Fabio Galeotti, Marie Claire Villeval, Working paper GATE 2016-05
We conduct an artefactual field experiment using a diversified sample of passengers of public transportations to study attitudes towards dishonesty. We find that the diversity of behavior in terms of dis/honesty in laboratory tasks and in the field correlate. Moreover, individuals who have just been fined in the field behave more honestly in the lab than the other fare-dodgers, except when context is introduced. Overall, we show that simple tests of dishonesty in the lab can predict moral firmness in life, although frauders who care about social image cheat less when behavior can be verified ex post by the experimenter.

Carbon tax, pollution and spatial location of heterogeneous firms

Nelly Exbrayat, Stéphane Riou, Skerdilajda Zanaj, Working paper GATE 2016-04
This paper investigates the ability of a fully harmonized carbon tax to curb carbon emissions in a globalized economy characterized by an uneven spatial distribution of heterogeneous firms. The level of the carbon tax matters for the direction of the relocation and its impact on global emissions. When the carbon tax is low enough, emissions are reduced as firms relocate to the smaller country to pay lower taxes by reducing their output. If the carbon tax is too high, then firms react by relocating to the larger country to maintain their export activity, so that the most environmentally friendly spatial configurations can be removed.

Better at Home than in Prison ? The Effects of Electronic Monitoring on Recidivism in Frances

Anaïs Henneguelle, Benjamin Monnery, Annie Kensey, Working paper GATE 2016-03
Many countries have recently adopted electronic monitoring (EM) as an alternative sentence in order to reduce incarceration while maintaining public safety. However, the empirical evidence on the effects of EM on recidivism (relative to prison) is very scarce worldwide. In this paper, we adress this debated question using quasi-experimental data from France. Our empirical strategy exploits the incremental roll-in of electronic monitoring in France, which started as a local experiment in four courts in 2000-2001, and was later adopted by more and more courts (2002-2003). Our IV estimates show that fully converting prison sentences into electronic monitoring has long-lasting beneficial effects on recidivism, with estimated reductions in probability of reconviction of 6-7 percentage points (9-11%) after five years. There is also evidence that, in case of recidivism, EM leads to less serious offenses compared to prison. These beneficial effects are particularly strong on electronically monitored offenders who received control visits at home from correctional officers, were obliged to work while under EM, and had already experienced prison before. This pattern suggests that both rehabilitation and deterrence are important factors in reducing long-term recidivism, and that electronic monitoring can be a very cost-effective alternative to short prison sentences. However, the massive development of EM in France in recent years, with shorter and less intensive supervision, may reduce its effectiveness.

Optimal Monetary Provisions and Risk Aversion in Plural Form Franchise Networks. A Model of Incentives with Heterogeneous Agents

Muriel Fadairo, Cintya Lanchimba, Miguel Yangari, Working paper GATE 2016-02
Existing literature on franchising has extensively studied the presence of plural form distribution networks, where two types of vertical relationships-integration versus franchising-co-exist. However, despite the importance of monetary provisions in franchise contracts, their definition in the case of plural form networks had not been addressed. In this paper, we focus more precisely on the " share parameters " in integrated (company-owned retail outlet) and decentralized (franchised outlet) vertical contracts, respectively the commission rate and the royalty rate. We develop an agency model of payment mechanism in a two-sided moral hazard context, with one principal and two heterogenous agents distinguished by different levels of risk aversion. We define the optimal monetary provisions, and demonstrate that even in the case of segmented markets, with no correlation between demand shocks, the two rates (commission rate, royalty rate) are negatively interrelated.

Remittances and expenditure patterns of the left behinds in rural China

Sylvie Démurger, Xiaoqian Wang, Working paper GATE 2016-01
This paper investigates how private transfers from internal migration in China affect the expenditure behaviour of families left behind in rural areas. Using data from the Rural-Urban Migration in China (RUMiC) survey, we assess the impact of remittances sent to rural households on consumption-type and investment-type expenditures. We apply propensity score matching to account for the selection of households into receiving remittances, and estimate average treatment effects on the treated. We find that remittances supplement income in rural China and lead to increased consumption rather than increased investment. Moreover, we find evidence of a strong negative impact on education expenditures, which could be detrimental to sustaining investment in human capital in poor rural areas in China.

2015

European Experience with Shared Decision Making

Angela Coulter, Martin Härter, Nora Moumjid-Ferdjaoui, Lilisbeth Perestelo-Perez, Trudy van der Weijden, Working paper GATE 2015-38
Background : Shared decision making (SDM) is frequently advocated but not yet widely implemented in European countries. Experience suggests that various incentives must be in alignment to encourage wider uptake.
Objectives : To assess readiness for mainstream implementation of SDM in five European countries.
Methods : Qualitative assessment of clinical policies and the availability of various SDM support services in Germany, France, Spain, the Netherlands and the UK.
Results : All five countries have research groups working on SDM, patient groups calling for its wider use, and ethical and professional standards indicating its desirability, but apart from a small number of demonstration projects, there is no evidence of a systematic approach to implementation in any of the countries as yet.
Conclusions : Greater attention will need to be given to the provision of effective leadership, training and practical support if SDM is to become a regular feature of clinical practice in these countries.

Efficient networks for a class of games with global spillovers

Pascal Billand, Christophe Bravard, Jacques Durieu, Sudipta Sarangi, Working paper GATE 2015-37
In this paper we examine efficient networks in network formation games with global spillovers that satisfy convexity and sub-modularity properties. Unlike the previous literature we impose these properties on individual payoff functions. We establish that efficient networks of this class of games are nested split graphs. This allows us to complete the work of Goyal and Joshi (2006) and Westbrock (2010) on collaborative oligopoly networks.

Understanding the spectrum of residential energy-saving behaviours : French evidence using disaggregated data

Fateh Belaid, Thomas Garcia, Working paper GATE 2015-36
Analysing household energy-saving behaviours is crucial to improve energy consumption predictions and energy policy making. How should we quantitatively measure them ? What are their determinants ? This study explores the main factors influencing residential energy-saving behaviours based on a bottom-up multivariate statistical approach using data from the recent French PHEBUS survey. Firstly, we assess energy-saving behaviours on a one-dimension scale using IRT. Secondly, we use linear regression with an innovative variable selection method via adaptive lasso to tease out the effects of both macro and micro factors on the behavioural score. The results highlight the impact of five main attributes incentivizing energy-saving behaviours based on cross-variable analyses : energy price, household income, education level, age of head of household and dwelling energy performance. In addition, our results suggest that the analysis of the inverted U-shape impact of age enables the expansion of the energy consumption life cycle theory to energy-saving behaviours.

Voluntary Contributions to a Mutual Insurance Pool

Louis Lévy-Garboua, Claude Montmarquette, Jonathan Vaksmann, Marie Claire Villeval, Working paper GATE 2015-35
We study mutual-aid games in which individuals choose to contribute to an informal mutual insurance pool. Individual coverage is determined by the aggregate level of contributions and a sharing rule. We analyze theoretically and experimentally the (ex ante) efficiency of equal and contribution-based coverage. The equal coverage mechanism leads to a unique no-insurance equilibrium while contribution-based coverage develops multiple equilibria and improves efficiency. Experimentally, the latter treatment reduces the amount of transfers from high contributors to low contributors and generates a "dual interior equilibrium". That dual equilibrium is consistent with the co-existence of different prior norms which correspond to notable equilibria derived in the theory. This results in asymmetric outcomes with a majority of high contributors less than fully reimbursing the global losses and a significant minority of low contributors less than fully defecting. Such behavioral heterogeneity may be attributed to risk attitudes (risk tolerance vs risk aversion) which is natural in a risky context.

Economic Integration, Corporate Tax Incidence and Fiscal Compensation

Nelly Exbrayat, Benny Geys, Working paper GATE 2015-34
Higher corporate taxes are often argued to depress wages (a tax incidence effect), while higher wages may require compensation via lower corporate tax rates (a fiscal compensation effect). Yet, existing empirical evidence ignores that i) both effects are likely to occur simultaneously (necessitating a joint estimation approach), and ii) capital mobility might play a critical moderating role for the strength of both effects. Using a panel dataset comprising 24 OECD countries over the period 1982-2007, we address both these deficiencies. This clearly illustrates the simultaneous existence of tax incidence and fiscal compensation effects. Moreover, capital mobility (and the ensuing relative bargaining power of economic agents) has a significant influence on both the prevalence and strength of these effects.

Consistent collective decisions under majorities based on difference of votes

Mostapha Diss, Patrizia Pérez-Asurmendi, Working paper GATE 2015-33
The main criticism to the aggregation of individual preferences under majority rules refers to the possibility of reaching inconsistent collective decisions from the election process. In these cases, the collective preference includes cycles and even could prevent the election of any alternative as the collective choice. The likelihood of consistent outcomes under a class of majority rules constitutes the aim of this paper. Specifically, we focus on majority rules that require certain consensus in individual preferences to declare an alternative as the winner. Under majorities based on difference of votes, the requirement asks to the winner alternative to obtain a difference in votes with respect to the loser alternative taking into account that individuals are endowed with weak preference orderings. Same requirement is asked to the restriction of these rules to individual linear preferences.

Unbalanced credit distribution in emerging economies and FDI

Damien Cubizol, Working paper GATE 2015-32
This empirical study shows that an increasing credit distribution to State-Owned Enterprises (SOEs), to the detriment of private firms, slows the increase in inward FDI in emerging economies. The first approach is global and dynamic ; it relies on GMM and Bayesian techniques, utilizing a sample of 40 emerging countries over the period 1988-2008. Then, a sectoral approach is implemented for 1992-2012 and strengthens the negative effect on inward FDI (but the difference of financial dependence between sectors does not have clear effects). Finally, certain policy actions can improve the allocation of domestic and foreign capital in emerging economies.

The Tragedy of Corruption. Corruption as a social dilemma

Ye-Feng Chen, Shu-Guang Jiang, Marie Claire Villeval, Working paper GATE 2015-31
We investigate corruption as a social dilemma by means of a bribery game in which a risk of collective failure is introduced when the number of public officials accepting a bribe from firms reaches a certain threshold. We show that, despite the social risk, the pursuit of individual interest prevails and leads to the elimination of honest officials over time. Reducing the size of the groups while increasing the probability of collective failure diminishes the public officials’ corruptibility but is not sufficient to eliminate the tragedy of corruption altogether.

The effect of trade on agglomeration within regions

Carolina Guevara, Working paper GATE 2015-30
This paper assesses for the first time the effect of regional trade openness on agglomeration within regions, using regional data on the trade of Colombia. The results of the panel model show that the effect of trade is sufficiently strong to shape the spatial configuration, a structure that rarely changes. The effect varies across regions. On the one hand, trade enhances spatial agglomeration within regions with large home market and location advantages. On the other hand, trade induces dispersion within regions that lack access to international trade or historical advantage. These results hold when controlling for the natural course of agglomeration (regions-pecific time trends), congestion effects in main cities and road infrastructure within regions.

Cognitive ability and the effect of strategic uncertainty

Nobuyuki Hanaki, Nicolas Jacquemet, Stéphane Luchini, Adam Zylbersztejn, Working paper GATE 2015-29
How is one’s cognitive ability related to the way one responds to strategic uncertainty ? We address this question by conducting a set of experiments in simple 2 x 2 dominance solvable coordination games. Our experiments involve two main treatments : one in which two human subjects interact, and another in which one human subject interacts with a computer program whose behavior is known. By making the behavior of the computer perfectly predictable, the latter treatment eliminates strategic uncertainty. We find that subjects with higher cognitive ability are more sensitive to strategic uncertainty than those with lower cognitive ability.

Strategy proofness and unanimity in private good economies with single-peaked preferences

Mostapha Diss, Ahmed Doghmi, Abdelmonaim Tlidi, Working paper GATE 2015-28
In this paper we examine the relation between strategy-proofness and unanimity in a domain of private good economies with single-peaked preferences. We prove that, under a mild condition, a social choice function satisfies strategy-proofness if and only if it is unanimous. As implication, we show that when the property of citizen sovereignty holds, strategy proofness and Maskin monotonicity become equivalent. We also give applications to implementation literature : We provide a full characterization for dominant strategy implementation, standard Nash implementation, and partially honest Nash implementation and we prove that these theories are equivalent

On ambiguity apportionment

Christophe Courbage, Béatrice Rey-Fournier, Working paper GATE 2015-27
This paper investigates the notion of changes in ambiguity over loss probabilities in the smooth ambiguity model developed by Klibanoff, Marinacci and Mukerji (2005). Changes in ambiguity over loss probabilities are expressed through the specific concept of stochastic dominance of order n defined by Ekern (1980). We characterize conditions on the function capturing attitudes towards ambiguity under which an individual always considers one situation to be more ambiguous than another in a model of two states of nature. We propose an intuitive interpretation of the properties of this function in terms of preferences for harms disaggregation over probabilities, also labelled ambiguity apportionment.

Que savons-nous de l’impact économique des parcs scientifiques ? Une revue de la littérature

Corine Autant-Bernard, Working paper GATE 2015-26
Dans un contexte où les initiatives cherchant à regrouper géographiquement les acteurs de la recherche se développent, cette revue de littérature synthétise les principaux résultats des travaux de recherche sur l’impact des parcs scientifiques. Plus précisément, il s’agit d’évaluer dans quelle mesure les regroupements d’activités de nature scientifique autour d’universités permettent des transferts formels des résultats de la recherche, mais aussi des externalités de connaissance et des effets d’entrainement sur les dynamiques économiques régionales et nationales.
Un premier résultat de cette revue de littérature est qu’une évaluation précise des retombées issues des parcs scientifiques fait aujourd’hui défaut. Les méthodes d’évaluation utilisées restent extrêmement partielles et ne proposent pas de mise en parallèle des bénéfices estimés avec les coûts de mise en oeuvre de telles politiques. Or ce n’est qu’à cette condition que des orientations pertinentes de politiques publiques peuvent être véritablement formulées.
En dépit de ce manque d’outils d’évaluation précis, cette revue de littérature tente de fournir un état des lieux des résultats empiriques disponibles à l’heure actuelle. Cela contribue à éclairer la pertinence de la mise en place de parcs scientifiques, mais aussi à identifier un certain nombre de conditions d’efficacité des politiques de parcs scientifiques.

Normative conflict and the limits of self-governance in heterogeneous populations

Lata Gangadharan, Nikos Nikiforakis, Marie Claire Villeval, Working paper GATE 2015-25
Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality. Agents’ concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We provide evidence for this from a public good experiment using a simple mechanism which allows individuals to communicate periodically with other group members and reward them for their actions. We show that, in homogeneous populations – where there is no tension between efficiency and equality – the mechanism permits group to obtain maximum efficiency. This is not the case in heterogeneous populations where individuals derive different benefits from cooperation. Although almost all heterogeneous groups agree to follow specific contribution rules with positive contributions, most of them either prioritize equality over efficiency or strike a compromise between the two. These findings suggest that equality concerns can impose limits on the ability of heterogeneous populations to reach efficient outcomes through self-governance.

Endogenous firms’ organization, internal audit and leniency programs

Emilie Dargaud, Armel Jacques, Working paper GATE 2015-24
When multi-product firms make simultaneous price-fixing agreements on different markets, they may wish to compartmentalize their agreements managing them with different individuals in order to avoid the contagion of antitrust authority investigations. Sometimes the leniency programs are effcient to defeat this strategy and to induce CEO to launch internal investigations and report the obtained hard evidence to the antitrust authority. However these programs may have pro-collusive effects for centralized firms.

On commercial gluts Unexpected affinities between Jean-Baptiste Say and the Saint-Simonians

Adrien Lutz, Working paper GATE 2015-23
A standard reading in the history of economic thought considers Saint-Simonianism to be embodied in the works of a set of European social thinkers including Robert Owen, William Godwin and Sismondi, all of whom are seen as standing in strict opposition to the doctrine of laissez-faire. This article, however, argues that, during the first quarter of the 19th century, the Saint-Simonians and the liberal economist Jean-Baptiste Say can be seen to adopt convergent views on commercial gluts.
First, it shows how the Saint-Simonians and Say both see undersupply and lack of industry as causes of gluts. Next, we assert that their intellectual affinities are also visible in their belief that increasing production remains an appropriate solution for gluts. Finally, this convergence is explained by their common heritage : Saint-Simonianism is embedded in a neo-Smithian tradition for which Say can be taken as representative. We argue that this legacy explains their convergence.

Non-Euclidean geometry and political economy How Jacques Rueff explained unemployment in England (1919-1931)

Adrien Lutz, Working paper GATE 2015-22
This paper provides new perspectives on the French liberal economist Jacques Rueff (1896-1978), especially as regards his early writings on unemployment. We aim to show that Rueff distinguishes the root causes of permanent unemployment in England (1919-1931) based upon an interesting reading of non-Euclidean geometry.
Controversially, this enables him to locate the cause of unemployment in the stickiness of the wage/price ratio. Hence, arguing that reality remains inaccessible in itself, Rueff focuses on a succession of variables (price, wage, unemployment), supplemented by his concepts of rational ego and the reasoning machine, in order to approach this reality.

Initiative for Infrastructure Integration in South America : Way toward Regional Convergence

Andrea Bonilla Bolaños, Working paper GATE 2015-21
This paper studies how the public provision of transportation infrastructure impact output convergence and trade integration in a two-country dynamic general equilibrium model in which the transportation cost between countries is endogenously determined by the stock of public infrastructure in both countries. Because of its particular conception, the so-called « Initiative for the Integration of Regional Infrastructure in South America (IIRSA) » serves as the case study. Data from Argentina and Brazil is thus used to solve the model. Two main results emerge. First, increasing public investment in infrastructure provides an impetus to commercial integration but does not necessarily generate output convergence. Second, the model shows that the only way for the two countries to achieve output convergence (in a winwin
economic growth scenario) is to coordinate their increments on public infrastructure, as proposed by IIRSA.

Competence versus Honesty : What Do Voters Care About ?

Fabio Galeotti, Daniel John Zizzo, Working paper GATE 2015-20
We set up an experiment to measure voter preferences trade-offs between competence and honesty. We measure the competence and honesty of candidates by asking them to work on a real effort task and decide whether to report truthfully or not the value of their work. In the first stage, the earnings are the result of the competence and honesty of one randomly selected participant. In the second stage, subjects can select who will determine their earnings based on the first stage’s competence and honesty of the alternative candidates. We find that most voters tend to have a bias towards caring about honesty even when this results in lower payoffs.

Optimal design and defense of networks under link attacks

Christophe Bravard, Liza Charroin, Working paper GATE 2015-19
Networks facilitate the exchange of goods and information and create benefits. We consider a network composed of complementary nodes, i.e., nodes that need to be connected to generate a positive payoff. This network may face intelligent attacks on links. To study how the network should be designed, we develop a strategic model, inspired by Dziubiński and Goyal (2013), with two players : a Designer and an Adversary. The Designer has two potential ways to defend her network : forming destructible links among the given set of nodes to increase connectivity or protecting a group of nodes (with indestructible links). Links formation and protections (indestructible links) are costly. The Adversary then allocates her resources to attack links. We examine two situations which differ according to the number of protections available to the Designer. Our main findings are that if the number of protections is not limited, the Designer should either protect all the nodes, or create a large number of
(destructible) links to absorb the Adversary’s attack ; if the available number of protections is limited, then a strategy that uses protections and links can be the equilibrium.

Experience Transmission : Truth-telling Adoption in Matching

Min Zhu, Working paper GATE 2015-18
Boundedly rational people may engage in strategic behavior under the Deferred Acceptance mechanism, resulting in unstable outcome and reducing overall welfare. How to reduce strategic behavior is thus of importance for field implementation. I address this issue in a laboratory experiment by looking at whether experienced people can transmit what they have learned and promote truth-telling behavior. In this experiment, subjects repeatedly play the matching game induced by the Deferred Acceptance mechanism for a finite number of periods, and then offer advice about best strategies to their successors. Participants in succeeding sessions are either given advice from their predecessors or observe histories of previous sessions. I find that advice given by predecessors can help subjects coordinate on truth-telling behavior and the Pareto efficient stable outcome (but this effect is not statistically
significant in correlated preference environment). On the contrary, observing histories has ambiguous effect on truth-telling adoption. This implies that policy makers can encourage real people to adopt truth-telling in the field by providing them with collections of good advice from people who have already participated in matching market.

Transition and capital misallocation : the Chinese case

Damien Cubizol, Working paper GATE 2015-17
This paper demonstrates that the allocation of household savings to State-Owned Enterprises (SOEs) in China, and not to the increasing share of private firms, explains both the patterns of capital flows (FDI entries and the accumulation of foreign assets) and the drop in the consumption share during China’s transition. The contribution is to explain these two elements in a dynamic general equilibrium model with TFP growth that differentiates FDI and foreign assets. In addition to other frictions, financial intermediation and SOEs have the crucial role by misdirecting household savings. It modifies firms’ labor and capital intensiveness, and creates shifts in savings accumulation and capital flows. Moreover, the increasing share of credit-constrained private firms hinders wage growth, and returns on household savings are low to finance SOEs ; these two elements reduce the consumption share. With a calibration adapted to the Chinese economy and deterministic shocks, the model also matches to a large extent the data for a variety of stylized facts over the last 30 years.

The distortionary effect of monetary policy : credit expansion vs. lump-sum transfers in the lab

Romain Baeriswyl, Camille Cornand, Working paper GATE 2015-16
In an experimental monetary general equilibrium economy, we assess two processes of monetary injection : credit expansion vs. lump-sum monetary transfers. In theory, both processes are neutral and exert no real effect on allocation. In the experiment, however, credit expansion leads to substantial distortions of real allocation and relative prices, and exerts a redistributive effect across subjects. By contrast, an increase in money through lump-sum transfers does not distort real allocation.

Saving Face and Group Identity

Tor Eriksson, Lei Mao, Marie Claire Villeval, Working paper GATE 2015-15
Are people willing to sacrifice resources to save one’s and others’ face ? In a laboratory experiment, we study whether individuals forego resources to avoid the public exposure of the least performer in their group. We show that a majority of individuals are willing to pay to preserve not only their self- but also other group members’ image. This behavior is frequent even in the absence of group identity. When group identity is more salient, individuals help regardless of whether the least performer is an in-group or an out-group. This suggests that saving others’ face is a strong social norm.

The Monte Carlo first-come-first-served heuristic for network revenue management

Nicolas Houy, François Le Grand, Working paper GATE 2015-14
We introduce the Monte-Carlo based heuristic with first-come-first-served approximation for future optimal strategy (MC-FCFS) in order to maximize profit in a network revenue management problem. Like the randomized linear programming (RLP) model, one purpose of the MC-FCFS heuristic is to have information about displacement costs, considering the full probability distribution of future demands instead of a simplified degenerate distribution as in the deterministic linear programming (DLP) model. However, this information is conveyed by applying the FCFS heuristic as a future strategy rather than using the optimal ex-post profits as in the RLP heuristic. We show that MC-FCFS performs approximately as well as the RLP heuristic at a much lower computational cost and much better than the DLP heuristic at maximizing profit in a multi-night hotel booking setting with or without planned upgrades.

Financing and advising with (over)confident entrepreneurs : an experimental investigation

Laurent Vilanova, Nadège Marchand, Walid Hichri, Working paper GATE 2015-13
We test in the laboratory how entrepreneurs’ skill perceptions influence the design of financing and advising contracts. Our theoretical framework proposes that selfconfident entrepreneurs prefer issuing debt whereas low self-confident ones prefer equity which induces strong investor assistance. The prevalence of overconfidence makes investors more reluctant to accept debt offers and constrains self-confident entrepreneurs to finance through
mixed securities. Experimental results show that self-confident entrepreneurs issue more debt-like securities and receive less assistance. We also show that entrepreneurs learn not to offer pure debt and that initial ignorance of their own skills reinforces entrepreneurs’ ability to learn through risky choices.

Le devenir professionnel des bénéficiaires des clauses d’insertion des marchés publics après leur sortie du dispositif

Nathalie Havet, Alexis Penot, Morgane Plantier, Working paper GATE 2015-12
Prévue par le code des marchés publics, la clause d’insertion est un outil permettant d’intégrer explicitement des critères sociaux dans les appels d’offres. Les entreprises attributaires de tels marchés ont l’obligation de proposer un nombre minimal d’heures de travail à des personnes éloignées de l’emploi. Cet article vise à étudier le devenir professionnel des bénéficiaires de ces clauses à moyen terme (6 à 20 mois après). Pour ce
faire, une enquête téléphonique auprès d’un panel représentatif des bénéficiaires de l’agglomération lyonnaise a été réalisée. Il ressort qu’une partie des bénéficiaires arrivent à sécuriser leur parcours professionnel avec l’accès à des emplois durables. Notre étude montre aussi que le maintien en emploi à moyen terme semble dépendre de la durée du contrat de clause, de sa capacité à améliorer la confiance en soi des bénéficiaires et à leur
faire acquérir une formation.

Mobilité quotidienne des actifs résidant en zones urbaines sensibles et accès à l’emploi : Une analyse économétrique à partir de l’Enquête Ménages Déplacements de Lyon

Louafi Bouzouina, Nathalie Havet, Pascal Pochet, Working paper GATE 2015-11
Alors que le désenclavement des zones urbaines sensibles est l’un des objectifs de la politique de la ville, visant notamment à favoriser l’accès à l’emploi, très peu travaux s’intéressent à l’analyse des pratiques de mobilité de leurs habitants. En se focalisant sur la population des actifs de l’aire urbaine de Lyon, l’objectif de cet article est de tester l’impact du lieu de résidence, à travers la distinction ZUS/non ZUS, sur leur mobilité quotidienne et celle liée au travail en particulier. L’analyse repose sur la dernière Enquête Ménages Déplacements lyonnaise (2006) enrichie d’autres sources de données spatialisées. Les résultats des modèles multivariés montrent que le fait d’habiter un quartier ZUS réduit le nombre de déplacements des actifs, mais aussi leur distance et leur temps au quotidien. En revanche, quand il s’agit de la seule mobilité domicile-travail, les actifs de ces quartiers sont
amenés à parcourir de plus longues distances. Ces résultats laissent entrevoir les difficultés spécifiques des actifs dans les zones urbaines défavorisées en matière de mobilité quotidienne et d’accès à l’emploi et aux aménités.

Incentives to patients versus incentives to health care providers : The users’ perspective

Izabela Jelovac, Philippe Polomé, Working paper GATE 2015-10
In theory, health care providers may adapt their professional behavior to the financial incentives driven by their remuneration. Our research question is whether the users of health care services anticipate such a behavior from their general practitioner (GP) and, if they do, what are the consequences of such an anticipation on their preferences regarding financial incentives. We propose a theoretical model to identify potential determinants of such preferences. We empirically test our theoretical predictions using the data from a survey that elicits individual preferences for either patients’ or providers’ hypothetical incentives in France. The empirical results confirm the theoretical ones by establishing that users tend to prefer to pay a copayment themselves when the amount of GPs’ incentives is high, the one of the patients’ copayment is low, they anticipate that their GP’s medical decisions are affected by financial incentives and their wealth is high. Otherwise, they
prefer their GP to face financial incentives.

Volunteer and satisfied ? Rural households’ participation in a payments for environmental services programme in Inner Mongolia

Sylvie Démurger, Adeline Pelletier, Working paper GATE 2015-09
Using survey data from Inner Mongolia, this paper explores the role of stakeholder engagement in the implementation of the Sloping Land Conversion Programme (SLCP), a payments for environmental services programme designed to restore forest in degraded land. Based on the idea that volunteerism and satisfaction with the programme’s outcome are two important components of the programme’s viability, we successively analyse the intensity of households’ participation in the programme and their reported satisfaction with its economic achievement, which we relate to their stated volunteerism. We show that households’ participation intensity in the SLCP is primarily driven by land and location characteristics, and that these findings hold true whether or not the households voluntarily enrolled in the programme. Moreover, as far as participants’ satisfaction can be interpreted as an indicator of potential long-term support for the programme, our findings also support plausible sustainability for the programme.

Sen is not a capability theorist

Antoinette Baujard, Muriel Gilardone, Working paper GATE 2015-08
This paper aims to show that, contrary to the standard understanding of his work, Sen’s idea of justice does not consist in the defense of a capability theory. Under the dominant capability-centered view, Sen’s idea of justice is indeed characterized principally by a switch of focus from utility to capability. We demonstrate that this view amounts to the application of formal welfarism to capabilities. We reject this characterization and defend instead a heuristic account of the status of capability in Sen’s thought : capability was introduced to make a point against welfarism, but this does not imply that a commitment to a capability theory. The capability-centered view is shown to be inconsistent with Sen’s idea of justice, because the latter requires agents to be involved in the definition of their own welfare. Our study of the status of capability in Sen’s view of justice enables us to relocate his main contribution and to build the basis for an alternative theory of justice.

Communication and Coordination in a Two-Stage Game

Tjaša Bjedov, Thierry Madiès, Marie Claire Villeval, Working paper GATE 2015-07
We study the impact of communication on behavior in a two-stage coordination game with asymmetric payoffs. We test experimentally whether individuals can avoid a head-to-head confrontation by means of coordinated strategies. In particular we analyze whether and how quickly a conflict-avoidance take-turn strategy can emerge. First, our results show that players learn to solve the conflict by choosing opposite options at both stages of the game. Second, many adopt a take-turn strategy to sustain coordination over time and alleviate the inequality induced by the asymmetry of payoffs. Third, communication increases the likelihood of conflict resolution even when a single pair member has the right to communicate.

The heterogeneous cyclicality of income and wages among the distribution

María Cervini-Plá, Antonia López-Villavicencio, José I. Silva, Working paper GATE 2015-06
We investigate the cyclicality of real wages and income using individual data for the UK over the 1991-2008 period. By paying special attention to the heterogeneity among different earnings and income groups, we document that individuals at the top of the distribution are more cyclical than lower ones. Moreover, the estimated cyclicality is considerably higher in recessions than in expansions for top-incomes. We also show that real wages and income are roughly acyclical for low wage and income workers. Instead,
their adjustment to the cycle takes place through transitions to and from unemployment.

Intra-Household Coping Mechanisms in Hard Times : the Added Worker Effect in the 2001 Argentine Economic Crisis

Laurine Martinoty, Working paper GATE 2015-05
This paper shows that the added worker effect (AWE) plays an important role in coping against aggregate shocks, even in cases where the discouragement effect prevails at a macroeconomic scale. Using an Argentine panel dataset between 2000-2002, we instrument the endogenous variation in the labor market outcomes of household heads using the collapse of the Convertibility era as a natural experiment, and measure its causal impact on their spouses’ labor supply decisions. Within this framework, we show that a woman whose husband experiences the average decline in income is 4.4 percentage points more likely to enter the labor market. Out of four new entrants, three work at least one hour weekly, and one even finds a full time job. Heterogeneous effects are in line with expectations, robustness checks support the validity of our empirical strategy, and our results are robust to various sensitivity tests.

Do Negative Emotions Explain Punishment in Power-to-Take Game Experiments ?

Fabio Galeotti, Working paper GATE 2015-04
An important branch of economic research on emotions has used power-to-take game experiments to study the impact of negative emotions, such as anger, irritation and contempt, on the decision to punish. We investigate experimentally the role that the specific punishment technology adopted plays in this context, and test to what extent punishing behavior can be truly attributed to negative emotions. We find that a large part (around 70%) of the punishment behavior observed in previous PTTG studies is explained by the technology of punishment adopted instead of negative emotions. Once this effect is removed, negative emotions do still play an important role, but the efficiency costs associated to them are much smaller.

Migration Externalities in Chinese Cities

Pierre-Philippe Combes, Sylvie Démurger, Shi Li, Working paper GATE 2015-03
We analyse the impact of internal migration in China on natives’ labour market outcomes. We find evidence of a large positive correlation of the city share of migrants with natives’ wages. Using different sets of control variables and instruments suggests that the effect is causal. The large total migrant impact (+10% when one moves from the first to the third quartile of the migrant variable distribution) arises from gains due to complementarity with natives in the production function (+6.4%), and from gains due to agglomeration economies (+3.3%). Finally, we find some evidence of a stronger effect for skilled natives than for unskilled, as expected from theory. Overall, our findings support large nominal wage gains that can be expected from further migration
and urbanisation in China.

Network Form and Performance. The Case of Multi-Unit Franchising

Muriel Fadairo, Cintya Lanchimba, Josef Windsperger, Working paper GATE 2015-02
Multi-unit franchising (MUF) is a governance form inside franchising networks where the franchisor transfers to the franchisees the right to own and operate more than one outlet. While previous empirical literature has revealed various advantages of MUF as compared to single-unit franchising (SUF), we study the impact of this governance form on the network performance, taking into account different contexts. Our results from propensity score matching show that MUF leads to higher performance. However, non-parametric estimations highlight thresholds suggesting that a mix of SUF and MUF is a more efficient governance form than a pure MUF network.

Cooperation in a differentiated duopoly when information is dispersed : A beauty contest game with endogenous concern for coordination

Camille Cornand, Rodolphe Dos Santos Ferreira, Working paper GATE 2015-01
In Keynes’ beauty contest, agents have to choose actions in accordance with an expected fundamental value and with the conventional value expected to be set by the market. In doing so, agents respond to a fundamental and to a coordination motive respectively, the prevalence of either motive being set exogenously. Our contribution is to consider whether agents favor the fundamental or the coordination motive as the result of a strategic choice that generates a strong strategic complementarity of agents’ actions. We show that the coordination motive tends to prevail over the fundamental one, which yields a disconnection of activity away from the fundamental. A valuation game and a competition game are provided as illustrations of this general framework.

2014

Local government cooperation at work : A control function approach

Zineb Abidi, Edoardo di Porto, Angela Parenti, Sonia Paty, Working paper GATE 2014-44
Abstract.We analyze voluntary coalition formation using a unique panel data for 1,056 municipalities in the French region of Brittany between 1995 and 2002. We use a control function approach to develop a binary discrete choice model with spatial interactions. We find that a municipality’s decision to cooperate over the provision local public goods depends on the decisions of its neighbours. Comparison with spatial econometrics models (SAR and Durbin) shows that the decision to cooperate is over estimated by these
more traditional models. The results are in line with the recent applied spatial economics literature but are derived for a discrete choice model setting.

Non-verbal feedback, strategic signaling and non-monetary sanctioning : new experimental evidence from a public goods games

Adam Zylbersztejn, Working paper GATE 2014-43
Several experiments show that feedback transmission mechanisms mitigate opportunistic behavior in social dilemmas. The source of this effect, especially in a repeated interaction, nonetheless remains obscure. This study provides a novel empirical testbed for channels by which feedback may affect behavior in a repeated public goods game. One is related to strategic signaling. The other involves aversion to others’ expressed disapproval. The presence of
feedback is found to foster pro-social behavior. The data favour the non-monetary sanctioning explanation rather than the signaling hypothesis.

Urbanization and Agricultural Structural Adjustments : Some Lessons from European Cities

Walid Oueslati, Julien Salanié, JunJie Wu, Working paper GATE 2014-42
Urbanization presents both opportunities and challenges to agriculture. This paper analyzes the effect of urbanization on the structure and profitability of agriculture at the rural-urban fringe. We develop a theoretical model accounting for changes in the amount of urban development, the level of fragmentation, and population density associated with urbanization. We show that urbanization not only affects the land allocation between traditional and highvalue crops, but also changes relative input and output prices for the two types of crops. We conduct an empirical analysis to estimate the effect of increasing population density and urban fragmentation on farm returns for a set of European metropolises using a Bayesian averaged model that deals with model uncertainty. Our results show that increasing population density
increases farm returns while increasing land fragmentation may have a detrimental effect in the beginning but a positive effect for high levels of fragmentation.

The predominant role of signal precision in experimental beauty contests

Camille Cornand, Romain Baeriswyl, Working paper GATE 2014-41
The weight assigned to public information in Keynesian beauty contest depends on the signal precision and on the degree of strategic complementarities. This experimental study shows that the response of subjects to changes in the signal precision and in the degree of strategic complementarities is qualitatively consistent with theoretical predictions, though quantitatively weaker. The weaker subjects’ response to changes in the signal precision, however, mainly drives the weight observed in the experiment, making strategic complementarities and overreaction an issue of second order.

The Sequential Equal Surplus Division for Rooted Forest Games and an Application to Sharing a River with Bifurcations

Sylvain Béal, Amandine Ghintran, Eric Rémila, Philippe Solal, Working paper GATE 2014-40
We introduce a new allocation rule, called the sequential equal surplus division for rooted forest TU-games. We provide two axiomatic characterizations for this allocation rule. The first one uses the classical property of component efficiency plus an edge deletion property. The second characterization uses standardness, an edge deletion property applied to specific rooted trees, a consistency property, and an amalgamation property. We also provide an extension of the sequential equal surplus division applied to the problem of sharing a river with bifurcations.

Climatic Conditions and Productivity : An Impact Evaluation in Pre-industrial England

Stéphane Auray, Aurélien Eyquem, Frédéric Jouneau-Sion, Working paper GATE 2014-39
In this paper, we bridge economic data and climatic time series to assess the
vulnerability of a pre-industrial economy to changes in climatic conditions. We
propose an economic model to extract a measure of total productivity from English data (real wages and land rents) in the pre-industrial period. This measure of total productivity is then related to temperatures and precipitations. We find that lower (respectively higher) precipitations (resp. temperatures) enhance productivity. Further, temperatures also have non-linear effects on productivity : large temperature variations lower productivity. We perform counterfactual exercises and quantify the effects of large increases in temperatures on productivity, GDP and welfare.

Agricultural marketing cooperatives with direct selling : A cooperative non cooperative game

Maxime Agbo, Damien Rousselière, Julien Salanié, Working paper GATE 2014-38
We build a theoretical model to study a market structure of a marketing cooperative with direct selling, in which many farmers are members of an agricultural marketing cooperative. They can sell their production either to the cooperative or on an oligopolistic local market. We show that the decision to sell to the cooperative induces an anti-competitive effect on the direct selling market.
The cooperative facilitates collusion on the local market by making farmers softer competitors on that market. Conversely, direct selling may create a "healthy emulation" among farmers, leading to more production benefiting the cooperative.

Inégalités d’exposition aux agents cancérogènes, mutagènes ou reprotoxiques (CMR) en milieu professionnel en France

Nathalie Havet, Alexis Penot, Magali Morelle, Lionel Perrier, Béatrice Fervers, Working paper GATE 2014-37
Notre étude exploite l’édition 2010 de l’enquête Surveillance médicale des
expositions aux risques professionnels (SUMER) pour dresser un état des lieux des expositions des salariés français aux agents CMR sur leur lieu de travail. Au total, 2,2 millions de personnes, soit 10,2% des salariés, ont été exposés à un ou plusieurs produits CMR lors de la semaine précédant leur visite médicale. Parmi eux, 70000 connaissaient une multi-exposition sur leur lieu de travail, ce qui porte à 3,5 millions le nombre de situations d’expositions recensées en 2010. Les situations des expositions à l’amiante ne représentent que 2,3% des expositions aux produits CMR, soit 10 fois moins que les expositions aux gaz d’échappement diesel. Nos résultats montrent qu’il existe des emplois et des profils de salariés qui cumulent les préjudices sur le marché du travail, y compris de forts risques d’exposition à des produits dangereux pour la santé. Il s’agit notamment des ouvriers, des
travailleurs de nuit et des salariés à contrats précaires, qui devraient donc constituer des cibles prioritaires pour les mesures de prévention.

Le rôle de l’accompagnement dans la réussite des parcours de validation des acquis de l’expérience

Nathalie Havet, Working paper GATE 2014-36
Notre article cherche à décrire les parcours des candidats à la validation des acquis de l’expérience (VAE) et le rôle joué par les entretiens conseil et les prestations d’accompagnement sur chacune des étapes de ce dispositif. Pour ce faire, les données sur l’ensemble des individus ayant déposé un dossier de candidature à la VAE entre 2007 et 2009 auprès des principaux valideurs de la région Rhône-Alpes ont été mobilisées. Il ressort que la VAE remplit son rôle de qualification des personnes peu diplômées. L’accompagnement
durant la procédure semble un atout incontestable dans la réussite de ces parcours de VAE.

The Impact of Within-Party and Between-Party Ideological Dispersion on Fiscal Outcomes : Evidence from Swiss Cantonal Parliaments

Tjasa Bjedov, Simon Lapointe, Thierry Madiès, Working paper GATE 2014-35
The impact of the fragmentation of executive and legislative bodies on the level and composition of government expenditure is a political feature that attracted considerable attention from economists. However, previous authors have abstracted from two important concepts : ideology and intra-party politics. In this paper, we explicitly account for these two phenomenons, and make two main contributions. First, we show that both intra-party and interparty ideological dispersion matters in the level of public spending. Therefore, it is incorrect to consider parties as monolithic entities. We also show that ideological dispersion matters especially for current expenditures, and not so much for investment expenditures. To do so, we construct a panel database (2003 to 2011) including data from a survey that quantifies the policy preferences of individual party members that were candidates to federal elections in Switzerland.

Hierarchy, Coercion, and Exploitation : An Experimental Analysis

Nikos Nikiforakis, Jörg Oechssler, and Anwar Shah, Working paper GATE 2014-34
The power to coerce workers is important for the e¢ cient operation of hierarchically structured organizations. However, this power can also be used by managers to exploit their subordinates for their own benefit. We examine the relationship between the power to coerce and exploitation in a laboratory experiment where a senior and a junior player interact repeatedly for a finite
number of periods. We find that senior players try repeatedly to use their power to exploit junior workers. These attempts are successful only when junior workers have incomplete information about how their e¤ort impacts on the earnings of senior players, but not when they have complete information. Evidence from an incentive-compatible questionnaire indicates that the social
acceptability of exploitation depends on whether the junior worker can detect she is being exploited. We also show how a history of exploitation affects future interactions.

Les attitudes sont-elles différentes face à la fraude fiscale et à la fraude sociale ?

Mathieu Lefebvre, Pierre Pestieau, Arno Riedl, Marie Claire Villeval, Working paper GATE 2014-33
En période de crise économique, les besoins de l’Etat augmentent et l’assiette fiscale se réduit ; il est alors courant de voir resurgir dans le débat public la lutte contre les diverses formes de fraude qui reduisent les recettes publiques. Dans ce contexte, on oppose régulièrement fraude fiscale à fraude sociale et la discussion porte souvent sur l’importance relative de l’une et de l’autre. On entend par fraude fiscale le détournement illégal d’un système fiscal afin de ne pas contribuer au financement des charges publiques, et par fraude sociale à le fait d’échapper au versement des prélèvements sociaux ou de bénéficier indûment de prestations sociales. Les deux formes de fraude se recoupent parfois. S’il est difficile de mesurer avec précision l’une et l’autre forme de fraude, on estime généralement que la fraude fiscale représente un manque à gagner pour l’Etat beaucoup plus important que la fraude sociale. Cependant, il est important de noter que ces deux types de
fraude émanent certainement de populations aux caractéristiques différentes en termes d’activité et de ressources. Il est donc intéressant d’essayer d’identifier les facteurs explicatifs de ces deux types de fraude, à savoir s’ils répondent aux mêmes ressorts économiques et impératifs moraux. Des populations ou des groupes sont souvent stigmatisés pour pratiquer l’un ou l’autre type de fraude.
Cet article se propose d’expliquer les facteurs menant à ces deux types de fraude et ce, à partir de données obtenues d’une expérience en laboratoire. De par ses exigences de contrôle et son artificialité, l’expérimentation de laboratoire peut contribuer à apporter des éléments de réponse. En effet, par le choix de valeurs de paramètres appropriées, elle permet de comparer directement les deux types de fraude du point de vue économique de façon à isoler des dimensions non-économiques de la prise de décision.

Ambiguous Incentives and the Persistence of Effort : Experimental Evidence

Robin M. Hogarth, Marie Claire Villeval, Working paper GATE 2014-32
When the assignment of incentives is uncertain, we study how the regularity and frequency of rewards and risk attitudes influence participation and effort. We contrast three incentive schemes in a real-effort experiment in which individuals decide when to quit : a continuous incentive scheme and two intermittent ones, fixed and random. In all treatments, we introduce a regime shift by withdrawing monetary rewards after the same unknown number of
periods. In such an ambiguous environment, we show that less able and more risk averse players are less persistent in effort. Intermittent incentives lead to a greater persistence of effort, while continuous incentives entail exit as soon as payment stops. Randomness increases both earlier and later exiting. This selection effect in terms of ability and risk attitudes combined with the impact of intermittent rewards on persistence lead to an increase in mean performance after the regime shift when incentives are intermittent.

The Dark Side of Competition for Status

Gary Charness, David Masclet, Marie Claire Villeval, Working paper GATE 2014-31
Unethical behavior within organizations is not rare. We investigate experimentally the role of status-seeking behavior in sabotage and cheating activities aiming at improving one’s performance ranking in a flat-wage environment. We find that average effort is higher when individuals are informed about their relative performance. However, ranking feedback also favors disreputable behavior. Some individuals do not hesitate to incur a cost to improve their rank by sabotaging others’ work or by increasing artificially their own performance. Introducing sabotage opportunities has a strong detrimental effect on performance. Therefore, ranking incentives should be used with care. Inducing group identity discourages sabotage among peers but increases in-group rivalry.

Who’s Favored by Evaluative Voting ? An Experiment Conducted During the 2012 French Presidential Election

Antoinette Baujard, Frédéric Gavre, Herrade Igersheim, Jean-François Laslier, Isabelle Lebon, Working paper GATE 2014-30
Under evaluative voting, the voter freely grades each candidate on a
numerical scale, with the winning candidate being determined by the sum of the grades they receive. This paper compares evaluative voting with the two-round system, reporting on an experiment, conducted during the 2012
French presidential election, which attracted 2,340 participants. Here we show that the two-round system favors “exclusive” candidates, that is candidates
who elicit strong feelings, while evaluative rules favor “inclusive” candidates, that is candidates who attract the support of a large span of the electorate. These differences are explained by two complementary reasons : the opportunity for the voter to support several candidates under evaluative voting rules, and the specific pattern of strategic voting under the two-round voting rule.

Destructive Behavior in a Fragile Public Good Game

Maximilian Hoyer, Nadège Bault, Ben Loerakker, Frans van Winden, Working paper GATE 2014-29
Socially destructive behavior in a public good environment - like damaging
public goods - is an underexposed phenomenon in economics. In an experiment we investigate whether such behavior can be influenced by the very nature of an environment. To that purpose we use a Fragile Public Good (FPG) game which puts the opportunity for destructive behavior (taking) on a level playing field with constructive behavior (contributing). We find substantial evidence of destructive decisions, sometimes leading to sour relationships characterized by persistent hurtful behavior. While positive framing induces fewer destructive decisions, shifting the selfish Nash towards minimal taking doubles its share to more than 20%. Female subjects are found to be more inclined to use destructive decisions. Finally, subjects’ social value orientation turns out to be partly predictive of (at least initial) destructive choices.

Une étude de la répartition du pouvoir confessionnel au Liban

Mostapha Diss, Abdallah Zouache, Working paper GATE 2014-28
La composition du parlement libanais est basée sur un compromis entre les différentes confessions religieuses de ce pays, souvent considéré comme seule démocratie parlementaire de l’Orient arabe. A partir des outils de la théorie des jeux coopératifs et en utilisant les fichiers électoraux libanais, cet article analyse le pouvoir des différentes confessions dans le parlement libanais. Nous étudions la différence entre le pouvoir “apparent” et le pouvoir
“réel” de chaque confession prenant part au processus de décision. Cet article analyse aussi l’impact des dispositions de la nouvelle réforme électorale sur le pouvoir de chaque confession représentée au parlement libanais. Nous montrerons que le compromis confessionnel au Liban
est loin d’être parfait.

Dishonesty under scrutiny

Jeroen van de Ven, Marie Claire Villeval, Working paper GATE 2014-27
We investigate how different forms of scrutiny affect dishonesty, using Gneezy’s (2005) deception game. We add a third player whose interests are aligned with those of the sender. We find that lying behavior is not sensitive to revealing the sender’s identity to the observer. The option for observers to communicate with the sender, and the option to reveal the sender’s lies to the receiver also do not affect lying behavior. Even more striking, senders whose identity is revealed to their observer do not lie less when their interests are misaligned with those of the observer.

The Role of R&D Collaboration Networks on Regional Innovation Performance

Cilem Selin Hazir, James LeSage, Corinne Autant-Bernard, Working paper GATE 2014-26
In this study, we consider R&D collaboration networks as a mechanism that modifies knowledge flows in space, and hence as another source of interaction among regional innovation processes. Our objective is to understand the relative role of spatial neighbors and network neighbors on patenting performance of regions. We make use of data on R&D collaborations supported by the European Union’s Framework Programs (FP) and empirically investigate the patent activity of 213 European regions in the field of ICT during 2003-2009. Concerning the short length of the time frame we adopt a static modeling strategy and specify a spatial Durbin Model. As spatial neighbors intersect with network neighbors we decompose neighbor regions into three sets : spatially proximate regions that are not collaboration partners, spatially proximate regions that are collaboration partners, and distant collaboration partners. We express the weight matrix as a convex combination of these three sets and by means of gridding we compare how model fit changes as we move from a purely space based view to a purely
network based view to express the dependence structure. The weight
matrix that performs the best accords 60% weight to distant collaboration partners, 30% weight to proximate collaboration partners and
10% weight to proximate regions with whom there is no FP collaboration. This result reveals that the interaction (proximate and distant) among European regions within FP networks in the field of ICT is key for understanding dependence among their patenting performances.

Drug approval decision times, international reference pricing and strategic launches of new drugs

Nicolas Houy, Izabela Jelovac, Working paper GATE 2014-25
This paper analyzes how drug approval procedures influence the incentives of
pharmaceutical firms to launch new drugs in the presence of international reference pricing. First, we show that the set of countries in which a firm commercializes a new drug is larger when countries do not approve this new drug simultaneously. We also show that a firm’s best response to international reference pricing is to never launch a new drug sequentially as long as the difference in drug approval times between countries is small enough. Furthermore, we show that a firm’s incentives to launch a new drug in one or another country are the same if the drug approval times are
identical across countries or if the difference between approval times are small enough.
However, we show that these incentives can change if the approval times differences across countries are large enough.

An Examination of the Convergence in the Output of South American Countries : The Influence of the Region’s Integration Projects

Andrea Bonilla Bolanos, Working paper GATE 2014-24
Since 2000, South American economies have undertaken several regional projects to eliminate socioeconomic inequalities and improve citizens’ living standards. This study evaluates the convergence in real GDP per-capita, as a suitable proxy measure, of 10 Unasur members, namely Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Peru, Uruguay, Paraguay, and Venezuela, for the period 1951-2011. By relying on cointegration techniques and applying Bernard and Durlauf’s (1995) stochastic definitions of convergence
and common trends, the presented evidence supports the existence of common long-run trends driving output in South America, meaning that the region is involved in a dynamic process of convergence in living standards.

The Bank of France and the Open-Market instrument : an impossible wedding ?

Nicolas Barabaroux, Working paper GATE 2014-23
In the aftermath of the sovereign debt criss, open-market interventions
prevailed within the central bank’s policy answers known under the label
unconventional monetary policy measures. During interwar period, France
was an isolated case, among the leading countries, by everlastingly rejecting
open-market operations in its monetary policy toolset. The present study
analyzes the French monetary policy history by explaining why Bank of
France had been so old-fashioned in monetary policymaking for too long
time. Moreover, the article provides an explanation of the latter point by
raising five major arguments of explanation : (1) the irrelevancy of the French
interwar monetary reforms which enabled the Bank of France to conduct
open-market operations per se ; (2) the French conservatism throughout the
insiders’ view from the Bank of France leaders (not only governors and deputy
governors, but also the General Council’s members at the head of the French
central bank) ; (3) the legacy of a metallist vision, embodied by Charles Rist,
within the French economists of that time (4) the negative public opinion
regarding open-market operations which were seen as being an inflationist
public debt financing instrument and lastly (5) the unfair competition that
occurred between the discounting operations and the open-market operations
in the Bank of France’s balance sheet.

In Fisher’s net : exact F-tests in semi-parametric models with exchangeable errors

Frédéric Jouneau-Sion, Olivier Torrès, Working paper GATE 2014-22
We consider testing about the slope parameter β when Y - X β is assumed to be an exchangeable process conditionally on X. This framework encompasses the semi-parametric linear regression model. We show that the usual Fisher’s procedure have non trivial exact rejection bound under the null hypothesis R β = ϒ.
This bound derives from the Markov inequality and a close inspection of multivariate moments of self-normalized, self-centered, exchangeable processes. Improvement by higher order versions of the Markov inequality are also presented. The bounds do not require the existence of any moment, so they remain valid even if TCL do not apply. We generalize the framework to multivariate and order-1 auto-regressive models with exogenous variables.

Les Déterminants de la Productivité des Inventeurs : Une Analyse en Termes de Diversité et de Cohérence de la Base de Connaissances

Riad Jawel Bouklia-Hassane, Working paper GATE 2014-21
Bien que la créativité humaine soit au coeur du processus d’innovation, peu d’attention a été accordée à la dimension individuelle dans l’analyse de l’activité d’innovation. L’objet de ce travail est d’étudier les déterminants de la productivité des inventeurs individuels. Contrairement à d’autres études, notre hypothèse est que le stock de connaissances de l’inventeur n’est pas homogène. Aussi, nous élaborons un modèle qui ‘augmente’ les spécifications traditionnelles par l’introduction des facteurs de diversité d’une part et de cohérence d’autre part de la base de connaissances des inventeurs. Les résultats des estimations économétriques réalisées sur les données de brevets des inventeurs français et britanniques valident l’hypothèse d’une influence positive de ces deux facteurs sur la productivité des inventeurs individuels. Ils mettent également en évidence la présence d’un effet indirect de la cohérence sur la productivité de l’inventeur : plus la cohérence de la base de connaissances de l’inventeur est grande et plus l’impact de la diversification technologique sur sa productivité est élevé.

The Power of International Reserves : the impossible trinity becomes possible

Layal Mansour, Working paper GATE 2014-20
This aim of the present paper is to measure first, the degree of trilemma indexes : exchange rate stability, monetary independence capital account openness while taking into account the increase of hording IR ratio over GDP, over External Debt and over Short Term External Debt. The evolution of the trilemma indexes shows that countries applying de facto flexible Exchange Rate Regime (ERR) take advantage of the IR and become able to adopt a managed ERR that consist of achieving the three trilemma indexes simultaneously without renouncing to anyone of them. We found that different IR ratio could have different interpretations and different directions of monetary policies, where external debt should be taken into consideration in such study while using the IR. As for country that is applying a de facto fixed exchange rate regime, the IR (different ratio) do not play any role in changing the patter of the Mundell trilemma and do not intervene in monetary authority policies. This paper treats as well the normative aspects of the trilemma, relating the policy choices to macroeconomic outcomes such as the volatility of output growth. We found different results from country to another, while taking different ratios of measuring IR, concluding that the impact of IR on the output volatility could change due to the level of external debt and adopted exchange rate regime.

Increase in home bias in the Eurozone debt crisis : the role of domestic shocks

Camille Cornand, Pauline Gandré, Céline Gimet, Working paper GATE 2014-19
One of the most striking consequences of the recent episode of sovereign debt market stress in the Eurozone has been the increase in the share of public debt held by the domestic sector in fragile economies. However, the causes and potential consequences of this increase were only given scarce attention in the literature on the Euro area sovereign debt crisis. In order to fill this gap, we first identify the shocks that impact the variation in the share of sovereign debt held at home in an SVAR model on a sample of Eurozone countries between 2002 and 2014, distinguishing between external and domestic shocks. Thanks to several alternative tests, we show that home bias in sovereign debt responds positively to country-specific fundamentals
and expectations shocks but we find no evidence that the increase in home bias is
destabilizing per se in the short-run. Second, a stylized theoretical model backed by the empirical results predicts that the consequences for sovereign debt crisis depend on the relative impact of domestic initial destabilizing shocks and increased home bias. The analysis suggests that an increase in home bias in times of sovereign debt stress, despite reflecting deteriorating fiscal conditions, may make default less likely.

A Field Study of Chinese Migrant Workers’ Attitudes toward Risks, Strategic Uncertainty, and Competitiveness

Li Hao, Daniel Houser, Lei Mao, Marie Claire Villeval, Working paper GATE 2014-18
Using a field experiment in China, we study whether migration status is
correlated with attitudes toward risk, ambiguity, and competitiveness. Our subjects include migrants and non-migrants. We find that, migrants exhibit no differences from non-migrants in risk and ambiguity preferences elicited using pairs of lotteries ; however, migrants are significantly more likely to enter competition in the presence of strategic uncertainty when they expect competitive entries from others. Our results suggest that migration may be driven more by a stronger belief in one’s ability to succeed in an uncertain and competitive environment than by risk attitudes under state
uncertainty.

Are teams less inequality averse than individuals ?

Haoran He, Marie Claire Villeval, Working paper GATE 2014-17
We compare inequality aversion in individuals and teams by means of both within- and between-subject experimental designs, and we investigate how teams aggregate individual preferences. We find that team decisions reveal less inequality aversion than individual initial proposals in team decision-making. However, teams are no more selfish than individuals who decide
in isolation. Individuals express strategically more inequality aversion in their initial proposals in team decision-making because they anticipate the selfishness of other members. Members with median social preferences drive team decisions. Finally, we show that social image has little influence because guilt and envy are almost similar in anonymous and non-anonymous interactions.

Norm Enforcement in Social Dilemmas. An Experiment with Police Commissioners

David L. Dickinson, David Masclet, Marie Claire Villeval, Working paper GATE 2014-16
Do individuals trained in law enforcement punish or reward differently from typical student subjects ? We analyze norm enforcement behavior of newly appointed police commissioners in both a Voluntary Contribution Mechanism game and a Common Pool Resource game. Our experimental design includes treatments where a reward or sanction institution is exogenously imposed, as well as treatments with endogenous selection of the norm enforcement
institution. Compared to a standard student-subject pool, police commissioners cooperate significantly more in both games. With exogenous institutions, police commissioners bear a higher burden of punishment costs than non-police subjects. When the norm enforcement institution is endogenous, all subjects vote more in favor of rewards over sanctions, but police subjects with some work experience are more likely to vote for sanctions. Police subjects also reward and sanction more than the others when the institution results from a majority vote.

Pro-rural policies, income and inequality : Evaluating a cash-for-work program in rural China

Yu Chen, Sylvie Démurger, Working paper GATE 2014-15
Despite the dramatic reduction of poverty in China over the past thirty-five years, poverty has not been fully eradicated in rural areas, and in the context of growing inequalities, it remains a national concern. This paper examines a local cash-for-work program launched in mountainous areas of Beijing municipality in December 2004, with a view to understanding both the challenges and achievements of pro-poor programs in China. Using original household survey data, we first highlight the fairly good targeting performance of the program towards the local poor. Second, participation
equations provide evidence of increasing local income without crowding out local agricultural activities. Finally, a decomposition of household income inequality by source highlights the strongly equalizing effect of the program on peasants’ income.

A geometric examination of majorities based on difference in support

Richard Baron, Mostapha Diss, Eric Rémila, Philippe Solal, Working paper GATE 2014-14
Reciprocal preferences have been introduced in the literature of social choice
theory in order to deal with preference intensities. They allow individuals to show preference intensities in the unit interval among each pair of options. In this framework, majority based on difference in support can be used as a method of aggregation of individual preferences into a collective preference : option a is preferred to option b if the sum of the intensities for a exceeds the aggregated intensity of b in a threshold given by a real number located between 0 and the total number of voters. Based on a three dimensional geometric approach, we provide a geometric analysis of the non transitivity of the collective preference relations obtained by majority rule based on difference in support. This aspect is studied by assuming that each individual reciprocal preference satisfies a g-stochastic transitivity property, which is stronger than the usual notion of transitivity

Rural Electrification in Rwanda : A Measure of Willingness to Contribute Time and Money

Thierry Kalisa, Working paper GATE 2014-13
This paper’s motivation is to contribute to the growing literature on contingent valuation in developing countries. In a new survey in Rwanda valuing people’s contribution for electrification, an innovative design is proposed,
giving the choice to respondents between two scenarios : one in which
they would contribute their time and another in which they would contribute
their money. Results show that people prefer to contribute in time rather
than in money. A great majority of people who have electricity would accept
to contribute for the electrification of others. The potential contributors are
willing to contribute 37,250 Frw ($ 55) and 66 days on average per year for
five years.

The Bitcoin mining games

Nicolas Houy, Working paper GATE 2014-12
When processing transactions in a block, a miner increases his reward but also decreases his probability to earn any reward because the time needed for his block to reach consensus depends on its size. We show that this leads to a game situation between miners. We analytically solve this game for two miners. Then, we show that miners do not play a Nash equilibrium in the current Bitcoin mining environment, instead, they should not process any transaction. Finally, we show that the situation where no transaction is ever processed would stop being a Nash equilibrium if the transaction fee was multiplied or, equivalently, the fixed reward divided by a factor of about 12.

Market Power and Collusion on Interconnection Phone Market in Tunisia : What Lessons from International Experiences

Sami Debbichi, Walid Hichri, Working paper GATE 2014-11
We try in this paper to characterize the state of mobile phone market in Tunisia. Our study is based on a survey of foreign experience (Europe) in detecting collusive behavior and a comparison of the critical threshold of collusion between operators in developing countries like Tunisia. The market power is estimated based on the work of Parker Roller (1997) and the assumption of "Balanced Calling Pattern". We use then the model of Friedman (1971) to compare the critical threshold of collusion. We show that the “conduct parameter” measuring the intensity of competition is not null during the period 1993-2011. Results show also that collusion is easier on the Tunisian market that on the Algerian, Jordanian, or Moroccan one.

Does Forecasts Transparency Affect Macroeconomic Volatility in Developing Countries ? Evidence From Quasi-Natural Experiments

Ummad Mazhar, Cheick Kader M’baye, Working paper GATE 2014-10
In this paper, we empirically investigate the link between forecasts transparency and macroeconomic volatility as measured by inflation and output growth volatility in developing economies. We adopt the quasi-random controlled experiments methodology that divides our sample of 49 developing countries into three categories on the basis of their forecasts transparency. The first category is composed of central banks that are completely opaque over our sample period. The second type of countries is
constantly transparent about their forecasts over the period of study while the third category includes central banks that have recently started to disclose their forecasts. In contrast to the previous literature, we interestingly find that increasing forecasts transparency unambiguously leads to higher macroeconomic volatility in developing countries. Indeed, we find that both groups of countries that constantly disclose their forecasts and that have only recently started to disclose their forecasts experience an increase in their macroeconomic volatility compared to the remaining group of countries that are completely opaque. Our results however indicate that forecasts transparency may have some stabilizing effects if and only if it is practiced along with other forms of institutional transparency.

La critique saint-simonienne de la secte des économistes : un positionnement original

Michel Bellet, Working paper GATE 2014-09
L’antiphysiocratie des saint-simoniens peut paraître assez naturelle. En effet,
une doctrine saint-simonienne réputée pour son industrialisme utopiste ne pouvait, semble t-il, que s’opposer à ce que Smith a appelé le "système agricole". Cette interprétation, sans être totalement erronée, est une réduction abusive du point de vue saint-simonien. En effet, si, au début du XIXème siècle, les saint-simoniens peuvent être rangés dans la catégorie des "néo-smithiens" qui réfutent la thèse selon laquelle la terre est à l’origine de la richesse, ils le font à partir d’une approche spécifique, opposant oisifs et travailleurs. Cette partition modifie les débats classiques concernant
le rôle des diverses classes et des revenus qui y sont associés, tout en légitimant un programme anti-physiocrate, opposé au rôle économique et politique des propriétaires fonciers. Pour autant, les saint-simoniens ne se contentent pas de cette opposition : ils soutiennent la méthode de Quesnay et sa définition de l’économie politique. Selon eux, il faut raisonner à partir d’un système, et une philosophie générale des rapports sociaux doit précéder la science des richesses. Même si la nature de cette philosophie diffère (droit naturel vs évolutionnisme historique et physiologique), cette communauté de vue revendiquée concernant la méthode et le refus d’autonomie de l’économie politique conduit les saint-simoniens à une définition et un usage originaux de leur antiphysiocratie, dans le contexte du premier tiers du XIXème siècle.

Monetary Policy and Value Judgments : Did we forget Myrdal’s legacy ?

Nicolas Barbaroux, Michel Bellet, Working paper GATE 2014-08
Myrdal’s works are usually analysed with a dual and separated point of view : on the one hand the methodological papers concerning the value problem and based on a strong non neutrality thesis ; on the other part the theoretical analysis concerning monetary theory and policy, with a Wicksellian filiation. In fact both the dimensions are strongly connected by a common way : the application of the Hägerström’s Swedish guillotine between is and ought, but also the construction of a bridge between economic science and political views on social engineering and economic policy. Myrdal wants to address this problem : how economic science can become politically relevant ? This paper analyses two stages of that unique project : the proposition of a "technology of economics" (1930), and the selection process for a "norm for monetary policy" (1939). It shows that Myrdal distorts an initial end and means scheme by proposing some intermediary concepts between positive and normative fields. From a theoretical and statistical framework and an explicit value judgment these concepts enable to elaborate an iterative tree of selection of a speci-c monetary policy. If the Myrdal’s project encounters difficulties in conciliating a non-cognitivist thesis with economic prescriptions and in proposing a tractable method, it remains an important benchmark for the analysis of the links between positive and normative views concerning monetary policy.

The economics of Bitcoin transaction fees

Nicolas Houy, Working paper GATE 2014-07
We study the economics of Bitcoin transaction fees in a simple static partial
equilibrium model with the specificity that the system security is directly linked to the total computational power of miners. We show that any situation with a fixed fee is equivalent to another situation with a limited block size. In both cases, we give the optimal value of the transaction fee or of the block size. We also show that making the block size a non binding constraint and, in the same time, letting the fee be fixed as the outcome of a decentralized competitive market cannot guarantee the very existence of Bitcoin in the long-term.

Willingness-to-pay for road safety improvement

Mouloud Haddak, Nathalie Havet, Marie Lefèvre, Working paper GATE 2014-06
Few studies have explored, to date, the issue of the monetary valuation of non-fatal injuries caused by road traffic accidents. The present paper arises interest in this question and aims to estimate, by means of the contingent valuation, the willingness to pay (WTP) of French households to improve their road safety level and reduce their risk of non-fatal injuries following a road accident. More precisely, Logit and Tobit models will be estimated to identify the factors influencing the individual will to pay. The results highlight the significant
and positive influence of the injury severity on the WTP of the participants. The direct or indirect experience of road traffic accidents seems to play an important role and positively influences the valuation of the non-fatal injuries.

Economic Rationales of Exclusive Dealing ; Empirical Evidence from the French Distribution Networks

Muriel Fadairo, Jianyu Yu, Working paper GATE 2014-05
This paper investigates the rationales of exclusive dealing (ED), which is one of the most common forms of vertical restraint and attracts intense policy debates in anti-trust regulations. Based on a survey of the theoretical literature, we derive several hypotheses relative to the anti- and pro-competitive motivations of ED. These hypotheses are submitted to French data regarding several types of distribution networks in a wide range of sectors. Considering the industry features, our empirical analysis indicates that in the French distribution system, ED contracts tend to be procompetitive. The evidence suggests that the motivation of ED mainly lies in its positive role to foster the investment of upstream firms.

It will cost you nothing to "kill" a Proof-of-Stake crypto-currency

Nicolas Houy, Working paper GATE 2014-04
It is a widely spread belief that crypto-currencies implementing a proof of stake transaction validation system are less vulnerable to a 51% attack than crypto-currencies implementing a proof of work transaction validation system. In this article, we show that it is not the case and that, in fact, if the attacker’s motivation is large enough (and this is common knowledge), he will succeed in his attack at no cost.

Ambiguity on audits and cooperation in a public goods game

Zhixin Dai, Robin M. Hogarth, Marie Claire Villeval, Working paper GATE 2014-03
We investigate the impact of various audit schemes on the future provision of public goods, when contributing less than the average of the group is sanctioned exogenously and the probability of an audit is unknown. We study how individuals update their beliefs about the probability of being audited, both before and after audits are definitely withdrawn. We find that when individuals have initially experienced systematic audits, they decrease both their beliefs and
their contributions almost immediately after audits are withdrawn. In contrast, when audits were initially less frequent and more irregular, they maintain high beliefs about the probability of being audited and continue cooperating long after audits have been withdrawn. Inconsistency in experiencing audits across time clearly increases the difficulty of learning the true audit probabilities. Thus, conducting less frequent and irregular audits with higher fines can increase
efficiency dramatically.

Consistent collective decisions under majorities based on differences

Mostapha Diss, Patrizia Pérez-Asurmendi, Working paper GATE 2014-02
The main criticism to the aggregation of individual preferences under majority rules refers to the possibility of reaching inconsistent collective decisions from the election process. In these cases, the collective preference includes cycles and even could prevent the election of any alternative as the collective choice. The likelihood of consistent outcomes under two classes of majority rules constitutes the aim of this paper. Speci-cally, we focus on majority rules that require certain consensus in individual preferences to declare an alternative as the winner. In the case of majorities based on difference of votes, such requirement asks to the winner alternative to obtain a difference in votes with respect to the loser alternative taken into account that individuals are endowed with weak preference orderings. Same requirement is asked to the restriction of these rules to individual linear preferences, whereas in the case of majorities based on di-erence in support, the requirement has to do with the difference in the sum of the intensities for the alternatives in contest.

Spatial targeting of agri-environmental policy and urban development

Thomas Coisnon, Walid Oueslati, Julien Salanié, Working paper GATE 2014-01
Widespread public support exists for the provision of natural amenities, such as
lakes, rivers or wetlands, and for efforts to preserve these from agricultural pollution. Agri-environmental policies contribute to these efforts by encouraging farmers to adopt environmentally friendly practices within the vicinity of these ecosystems. A spatially targeted agri-environmental policy promotes natural amenities and may thereby affect household location decisions. The purpose of this paper is to investigate the extent of these impacts on the spatial urban structure. We extend a monocentric city model to include farmers’ responses to an agri-environmental policy. Our main findings are that the implementation of a spatially targeted agrienvironmental policy may lead to some additional urban development, which could conflict with the aim of the policy.

2013

A small macro econometric model for Kazakhstan : a retrospective of alternative economic policies undertaken during the transition process

Gilles Dufrénot, Adelya Ospanova, Alain Sand-Zantman, Working paper GATE 2013-44
This paper presents a quarterly macro econometric model of the Kazakhstan. The main goal is to provide a stylized representation of the Kazakh economy in order to simulate the consequences of several economic policies viewed by the authorities as essential during the period of transition to a market economy. The policy simulation potential of the model is illustrated by five types of
simulations : interest rate shocks, foreign direct investment shocks, world oil price shocks, foreign demand shocks and nominal wages shocks. These sets of simulations show the importance of foreign direct investments in terms of theirs global positive effect, as well as the demand effect of an increase in the wages. We also find that effect of the tight monetary policy in not ambiguous ; we argue that in some cases it is not the most efficient policy instrument to sustain the economy.

Housing wealth accumulation : The role of public housing

Florence Goffette-Nagot, Modibo Sidibé, Working paper GATE 2013-43
The public housing sector provides housing units at below-market rents, potentially allowing its tenants to save for a downpayment more quickly than they would have otherwise.
In this paper, we analyze the e-ffect of a spell in public housing on age at first-time homeownership using the French Housing Survey. We use a pseudo-panel approach that takes into account the speci-cities of the local housing market, to derive individual tenure transitions from multiple cross-sections data. Using an IV strategy to control for a potential selection into public housing, we jointly estimate public housing tenancy and duration before -first-time homeownership, and take into account unobserved heterogeneity. Our results indicate that a spell in public housing increases the hazard to homeownership, supporting the idea that, in France, the public housing policy provides an important pathway to homeownership.

Welfare Reversals in a Monetary Union

Stéphane Auray, Aurélien Eyquem, Working paper GATE 2013-42
We show that welfare can be lower under complete financial markets than under autarky in a monetary union with home bias, sticky prices and asymmetric shocks. Such a monetary union is a second-best environment in which the structure of financial markets affects risk-sharing but also shapes the dynamics of inflation rates and the welfare costs from nominal rigidities. Welfare reversals arise for a variety of empirically plausible degrees of price stickiness when the Marshall-Lerner condition is met. These results carry over a model with
active fiscal policies, and hold within a medium-scale model, although to a weaker extent.

Measuring Agents’ Reaction to Private and Public Information in Games with Strategic Complementarities

Camille Cornand, Franck Heinemann, Working paper GATE 2013-41
In games with strategic complementarities, public information about the state of the world has a larger impact on equilibrium actions than private information of the same precision, because public signals are more informative about the likely behavior of others. We present an experiment in which agents’ optimal actions are a weighted average of the fundamental state and their expectations
of other agents’ actions. We measure the responses to public and private signals. We find that, on average, subjects put a larger weight on the public signal. In line with theoretical predictions, as the relative weight of the coordination component in a player’s utility increases, players put more weight
on the public signal when making their choices. However, the weight is smaller than in equilibrium, which indicates that subjects underestimate the information contained in public signals about other players’ beliefs.

Bailout policy in a globalized economy

Nelly Exbrayat, Thierry Madiès, Stéphane Riou, Working paper GATE 2013-40
This paper explores how trade integration influences the decision by national
governments to bailout manufacturing firms. We develop a 2-country model of
generalized oligopoly with heterogenous firms and trade costs. High-cost firms are eligible for a bailout while low-cost firms are profitable. Our results show that trade liberalization influences both political benefits of a bailout and its relative cost as compared to a laissez-faire policy. If the fall in trade cost is so large that it allows high-cost firms to become exporters, governments might move away from a bailout policy to a laissez-faire policy. In contrast, a marginal decline in trade costs that does not affect the export status of high-cost firms, always makes governments more prone to adopt a bailout decision.

A Note on Networks of Collaboration in Multi-market Oligopolies

Pascal Billand, Christophe Bravard, Subhadip Chakrabarti, Sudipta Sarangi, Working paper GATE 2013-39
In this note, we extend the Goyal and Joshi’s model of network of collaboration
in oligopoly to multi-market situations. We examine the incentive of firms to form links and the architectures of the resulting equilibrium networks in this setting. We also present some results on efficient networks.

Mixing the Carrots with the Sticks : Third Party Punishment and Reward

Nikos Nikiforakis, Helen Mitchell, Working paper GATE 2013-38
While the opportunity to punish selfish and reward generous behavior coexist in many instances in daily life, in most laboratory studies, the demand for punishment and reward are studied separately from one another. This paper presents the results from an experiment measuring the demand for reward and punishment by ‘unaffected’ third parties, separately and jointly. We find that the demand for costly punishment is substantially lower when individuals
are also given the ability to reward. Similarly, the demand for costly reward is lower when individuals can also punish. The evidence indicates the reason for this is that costly punishment and reward are not only used to alter the material payoff of others as assumed by recent economic models, but also as a signal of disapproval and approval of others’ actions, respectively. When the opportunity exists, subjects often choose to withhold reward as a form of costless punishment, and to withhold punishment as a form of costless reward. We
conclude that restricting the available options to punishing (rewarding) only, may lead to an increase in the demand for costly punishment (reward).

Social preferences and lying aversion in children

Valeria Maggian, Marie Claire Villeval, Working paper GATE 2013-37
While previous research has shown that social preferences develop in
childhood, we study whether this development is accompanied by reduced use of
deception when lies would harm others, and increased use of deception to benefit others. In a sample of children aged between 7 and 14, we find strong aversion to lying at all ages. Lying is driven mainly by selfish motives and envy. Children with stronger social preferences are less prone to deception, even when lying would benefit others at no monetary cost. Older children lie less than younger children and require more selfjustification to lie.

Central bank Transparency and Information Dissemination : An experimental Approach

Emna Trabelsi, Walid Hichri, Working paper GATE 2013-36
In this paper, we propose to compare different partial transparency regimes in order to determine the optimal diessemination policy by the central bank, using an experimental approach. A treatment dedicated to the benchmark situation (where information is fully released) is also available. Our experiment is based
on subsequent framework of Morris and Shin (2002), Cornand and Heinemann (2008) and Trabelsi (2012).
The predictive power of K-level reasoning is an issue that is addressed also in this paper. Our experiment indicates that -when fully disclosed- players overreact to public information and this overreaction is efficiently reduced when the degree of publicity decreases (i.e. when the fragmentation measure increases). The average weight assigned to common signal decreases over treatments, especially when we establish partial transparent strategy (i.e. fragmented information). The results provide support both for and against global games theoretical predictions. In fact, although players overreact to public signal, their behavior is inconsistent with theoretical equilibrium, which means that the destabilizing effect of public information is less pronounced
experimentally than when it does in theory. This is not the case when public information is fragmented ; subjects’ behavior does approach equilibrium. These observations coincide with both a collective and an individual analyses of behavior.

Stratégie familiale de gestion des chocs : l’offre de travail des épouses en réponse aux fermetures d’entreprise en Argentine

Laurine Martinoty, Working paper GATE 2013-35
Cet article a pour objectif d’étudier le rôle de la famille comme mécanisme d’assurance lorsqu’un choc touche le revenu du travail du pourvoyeur principal du ménage. En incertitude, le modèle du cycle de vie prédit qu’un tel
choc a un impact positif sur l’offre de travail de son conjoint. Données de panel à l’appui, nous testons l’existence de cet « effet travailleur additionnel » lors de la récession argentine (1998-2002). Le motif stratégique rend compte de 12,5% de l’augmentation totale de la participation féminine. Une femme a 13 p.p. de chance supplémentaire d’entrer sur le marché du travail et de trouver un temps plein si son conjoint perd son emploi. A la marge intensive, la participation reste inchangée.

Abram Bergson

Antoinette Baujard, Working paper GATE 2013-34
This paper briefly presents the life of Abram Bergson (Burk). It summarizes its most important contributions to economic theory : microeconomics, welfare economics, comparative economics and sovietology. The role of value judgments in the construction of social indexes or in the comparison of systems is especially highlighted.

Welfare economics

Antoinette Baujard, Working paper GATE 2013-33
This paper presents the Paretian Watershed and the fundamental theorems of welfare economics. It distinguishes the British approach (à la Kaldor-Hicks)
from the American approach (à la Bergson-Samuelson) to new welfare economics. It develops the more recent domains of happiness economics, the comparative approach by Amartya Sen, and the theory of fair allocation by Marc Fleurbaey.

Utilitarianism and anti-utilitarianism

Antoinette Baujard, Working paper GATE 2013-32
This paper presents the different utilitarian approaches to ethics.
It stresses the influence of utilitarianism in economics in general and in
welfare economics in particular. The key idea of the paper to explain
the evolution from classical utilitarianism to preferences utilitarianism and towards post-welfarist approaches is the following. Utility is
defi-ned normatively and positively. This generates some serious tensions. Utilitarianism needs to evolve to go beyond this ethical tension.
Another idea defended in this paper is that the solutions developed
by utilitarianism to solve the ethical issue eventually reinforces operational problems. This raises a legitimacy issue as whether the intervention of utilitarian economists in public decision are likely to be
normatively transparent.

A Theory of Agricultural Marketing Cooperatives with Direct Selling

Maxime Agbo, Damien Rousselière, Julien Salanié, Working paper GATE 2013-31
We build a theoretical model to study a market structure of a marketing cooperative with direct selling, in which many farmers are members of an agricultural marketing cooperative. They can sell their production either to the cooperative or on a local market. We show that the decision to sell to the cooperative induces an anti-competitive effect on the direct selling market. Conversely, direct selling may create a "healthy emulation" among farmers, leading to more production benefiting the cooperative.

Does Inflation Targeting Matter ? An Experimental Investigation

Camille Cornand, Cheick Kader M’Baye Working paper GATE 2013-30
We use laboratory experiments with human subjects to test the relevance of different inflation targeting regimes. In particular and within the standard New Keynesian model, we evaluate to what extent communication of the inflation target is relevant to the success of inflation targeting. We find that if the central bank only cares about inflation stabilization, announcing the inflation target does not make a di-fference in terms of macroeconomic performances compared to a standard active monetary policy.
However, if the central bank also cares about the stabilization of the economic activity, communicating the target helps to reduce the volatility of inflation, interest rate, and output gap although their average levels are not affected. This finding is consistent with those of the theoretical literature and provides a rationale for the adoption of a flexible inflation targeting regime.

International Reserves versus External Debts : Can International reserves avoid future Financial Crisis in indebted Countries ?

Layal Mansour, Working paper GATE 2013-29
The aim of this paper is to evaluate the economic consequences on the countries that on one hand protect themselves from future financial crises by accumulating international reserves (IR) while on the other hand expose themselves to severe financial crisis due to their excessive internal and/or external public debt. Using the Financial Stress Indicator (FSI) proposed by Balakrishnan et al (2009) and IMF -which cover several aspects of financial
crisis- and by applying the Markov switching model with time varying, we estimated the probability whether an indebted country is vulnerable to crises despite its accumulation of IR -acting as a buffer stock and self-insurance-. We studied the case of five emerging countries in Asia and Latin America that had increased both of their IR and public debts, and found that debt had increased the likelihood for a country to suffer from financial crisis, however IR did not necessarily provide “Peace” in the indebted countries except of some exceptions.
We conclude that although debt and international reserves have theoretically opposite economic concerns for a country, the deleterious effects of debts might outweigh in most cases the beneficial effects of IR

Is financial support for private R&D always justified ? A discussion based on literature on growth

Benjamin Montmartin, Nadine Massard, Working paper GATE 2013-28
Many economists have long held that market failures create a gap between social and private returns to Research and Development (R&D), thereby limiting private incentives to invest in R&D. However, this common belief that firms significantly underinvest in R&D is increasingly being challenged, leading the rationale behind public support for private R&D to be questioned.
In this paper, we attempt to clarify the perspectives of two sources : the theoretical literature on endogenous growth, and its recent developments in integrating a geographical dimension, and the empirical literature that measures the social returns to R&D in relation to the private returns. Ultimately, we are able to clearly distinguish among different types of market failures and compare their relative impact on the gap between the private and social returns to R&D. Two main conclusions are reached. First, systematic firm underinvestment in R&D is not demonstrated. Second, even though instances of underinvestment do occur, they are mainly explained by surplus appropriability problems rather than by knowledge externalities. This suggests the need for a new policy mix
that employs more demand-oriented instruments and is more concentrated on identifying efficient allocations among activities rather than merely increasing global private R&D investment.

College Admissions in China : A Mechanism Design Perspective

Min Zhu, Working paper GATE 2013-27
This paper justifies the evolution of the college admissions system in China from a mechanism design perspective. The sequential choice algorithm and the parallel choice algorithm used in the context of China’s college admissions system are formulated as the well-studied Boston mechanism and the Simple Serial Dictatorship mechanism. We review both theoretical and experimental
mechanism design literature in similar assignment problems. Studies show that the Boston mechanism does not eliminate justified envy, is not strategy-proof and is not Pareto-efficient. The Simple Serial Dictatorship mechanism eliminates justified envy, is strategy-proof and is Pareto-efficient, thus outperforming the Boston mechanism in all three criteria. This result provides justification for
the transition in recent years from the sequential choice algorithm to the parallel choice algorithm in China’s college admissions practices.

L’importance des institutions d’échange : une mise en perspective par les expériences de marché

Stéphane Robin, Carine Staropoli, Working paper GATE 2013-26
Les premières expériences de marché réalisées par Vernon Smith [1962] ont mis en évidence l’importance des institutions de marché pour l’efficacité des échanges. Ces institutions organisent la communication d’information entre les acteurs du marché et structurent les incitations individuelles qui motivent l’échange. Elles ont une influence sur la dynamique des prix, le volume des transactions, l’efficacité allocative et informative du marché. Au cours des trente dernières années, l’économie expérimentale est devenue une méthode empirique utilisée pour le design de marché dans différents secteurs économiques. Le laboratoire est alors utilisé comme banc d’essai pour étudier les propriétés et mesurer les performances des institutions d’échange dans un environnement simple, contrôlé et reproductible. Dans cet article, nous illustrons l’apport de cette démarche à partir d’une revue des recherches conduites en laboratoire sur le design des marchés électriques.

Mimic Behavior in Home Waste-waters Management

Philippe Polomé, Working paper GATE 2013-25
We present results of a household-level survey on behaviors regarding refuses in the home waste-waters network. Interpreting survey results in a panel-data logit results show that most socio-economic and public good-related respondent’s characteristics do not play a significant role in explaining choices to discard in the home waste-waters network. The only significant regressor, apart from the nature of the refuse itself, is, by far, the belief that the respondent has about her neighbors’ and relatives’ discarding behavior. We use Dong’s endogeneity test [7] to show that that regressor is not endogenous. We argue that these results may be used by policymakers to reduce undesirable refuses in the home waste-waters network by means of properly designed
nudges.

Limited higher order beliefs and the welfare effects of public information

Camille Cornand, Frank Heinemann, Working paper GATE 2013-24
In games with strategic complementarities, public information about the state of the world has a larger impact on equilibrium actions than private information of the same precision, because the former is more informative about the likely behavior of others. This may lead to welfare-reducing ‘overreactions’ to public signals as shown by Morris and Shin (2002). Recent experiments on games
with strategic complementarities show that subjects attach a lower weight to public signals than theoretically predicted. Aggregate behavior can be better explained by a cognitive hierarchy model where subjects employ limited levels of reasoning. This paper analyzes the welfare effects of public information under such limited levels of reasoning and argues that for strategies according with
experimental evidence, public information that is more precise than private information cannot reduce welfare, unless the policy maker has instruments that are perfect substitutes to private actions.

Social Networks and Peer Effects at Works

Julie Beugnot, Bernard Fortin, Guy Lacroix, Marie Claire Villeval, Working paper GATE 2013-23
This paper extends the standard work effort model by allowing workers to interact through networks. We investigate experimentally whether peer performances and peer contextual effects influence individual performances. Two types of network are considered. Participants in Recursive networks are paired with participants who played previously in isolation. In Simultaneous networks, participants interact in real-time along an undirected line. Mean peer effects are identified in both cases. Individual performances increase with peer performances in the recursive network. In the simultaneous network, endogenous peer effects vary according to gender : they are large for men
but not statistically different from zero for women.

Firm voluntary measures for environmental changes, eco-innovations and CSR : Empirical analysis based on data surveys

Christian Le Bas, Nicolas Poussing, Working paper GATE 2013-22
Despite the increased strategic importance of environmental innovation on the one hand and corporate social responsibility on the other, there are still few studies that show firm voluntary measures create a primary determinant of environmental changes. First, we clarify the meaning of voluntary measures and CSR. Second, we utilize a survey carried out in Luxemburg on firm CSR practices jointly with the Community Innovation Survey 2008 (CIS 2008). We merge them and show through the estimation of a probit model that CSR is an important factor that explains environmental innovation. Thanks to a question from CIS 2008 we can contribute to the literature by developing a new indicator measuring the scale of the positive impacts on the environment coming from the firm technological innovation capacity. A negative binomial regression enables us to estimate a significant and positive effect of CSR and firm value on this scale.

Optimal Monetary Provisions in Plural Form Franchise Systems ; A Theoretical Model of Incentives with Two Risk-Averse Agents

Cintya Lanchimba, Working paper GATE 2013-21
Empirical studies show that most franchise chains use dual distribution - or a plural form franchise system - characterized by the coexistence of franchised units and company-owned retail units in the same distribution network. Therefore, this paper focuses on dual distribution and considers the different contractual arrangements in this type of franchise system. The paper contributes to the theoretical efforts at developing a model to study the optimal determination of the share parameters (commission and royalty rates) in a
mixed system.

The determinants of recidivism among ex-prisoners : a survival analysis on French data

Benjamin Monnery, Working paper GATE 2013-20
This article explores the main determinants of the hazard of recidivism among ex-prisoners. We use a nationally-representative sample of prisoners released in 1996-1997 in France, drawn from a 5-year follow-up survey run by the French correctional administration. We estimate semiparametric duration models which deal with violations of the proportional hazards hypothesis.
Our results confirm the importance of gender, age, nationality, access to employment and prior convictions on recidivism within five years after release from prison. We also find significant differences in hazards of recidivism by type of initial offense, penal status at entry, and type of release (early release under parole, etc.), while controlling for prison fixed effects. Finally, our study casts doubt on the influence of certain variables (marital status at entry, education,
homelessness) and on the effectiveness of semi-libert´e as a way to prevent recidivism.

Collusion et structure des coûts dans un marché de duopole mixte vs privé de téléphonie mobile

Sami Debbichi, Walid Hichri, Working paper GATE 2013-19
Nous présentons dans ce papier une modélisation du seuil critique de
préférence pour la collusion dans un duopole mixte/privé en fonction du tarif
d’interconnexion et de son coût marginal, dans un régime de concurrence à la
Cournot. L’objectif consiste à comparer la préférence pour la collusion à travers
ce seuil dans les deux structures de marché étudiées et dans deux cas de figures : coûts d’interconnexion linéaires et coût d’interconnexion quadratiques. Les résultats montrent que le seuil dépend de deux variables : Le tarif d’interconnexion et un paramètre relatif à la technologie employée par l’opérateur. Les résultats de l’application au cas du marché Tunisien sont conformes aux résultats théoriques.

How to make the metropolitan area work ? Neither big government, nor laissez-faire

Carl Gaigné, Stéphane Riou, Jacques-François Thisse, Working paper GATE 2013-18
We study how political boundaries and fiscal competition interact with the labor and land markets to determine the economic structure and performance of metropolitan areas. Contrary to general belief, institutional fragmentation need not be welfare-decreasing, and commuting from the suburbs to the central city is not wasteful. Thus, the institutional and economic limits of the central city are not the same. With tax competition, the central business district is too small. The dispersion of jobs is increased when suburbanite workers are allowed to consume the public services supplied by the central city. This indicates the
need for some metropolitan governance.

Literature review of the decision-­‐making determinants related to the influenza vaccination policy

Maria Laura Silva, Lionel Perrier, Jean Marie Cohen, Anne Mosnier, John Paget, Hans Martin Spath, Working paper GATE 2013-17
Background : Seasonal influenza concerns the worldwide population every year, whilst pandemic influenza is an unpredictable threat. Due to an important socioeconomic impact, mitigation measures must be specified. Governments elaborate vaccination policy based on scientific evidence. However, this process is, in general, not transparent.
Objectives : To study the decision-making process related to the influenza vaccination policy, identifying the actors involved, the decisions made and describing the information used by type and level of importance.
Methods : Six major databases were searched in seven languages, without time limit, using keywords related to influenza vaccination, decision-making and health policy. Titles and abstracts were screened according to three established criteria. Selected articles were analysed and compared against a checklist for context, stakeholders and evidence.
Results : 111 articles were retrieved since the 1990s, most of them (40%) were conducted in the USA. The decision-making process mainly concerned vaccination strategies (53%) and pandemic preparedness (28%). Stakeholders were identified at an institutional, production and consumer level. Evidence used by policy-makers was similar (e.g. logistics of vaccines), but the factors influencing were different (e.g. social conditions).
Conclusion : Considering the imminent risk of socio-economic disruption and media pressure, the pandemic threat needs to be integrated into an analysis of decision making processes regarding seasonal influenza vaccination.

The Importance of the Cognitive Environment for Intertemporal Choice

Michael A. Kuhn, Peter Kuhn, Marie Claire Villeval, Working paper GATE 2013-16
We experimentally manipulate two aspects of the cognitive environment —
cognitive depletion and recent sugar intake — and estimate their effects on individuals’ time preferences in a way that allows us to identify the structural parameters of a simple (α,β,δ) intertemporal utility function for each person. We find that individuals exposed to a prior cognitive load, individuals who consumed a sugared drink and individuals who consumed a sugar-free drink all defer more income than a control group exposed to none of these conditions. Structural estimates show that all three effects are driven entirely by
increases in the intertemporal substitution elasticity parameter (α). Together, our results suggest that at least for complex economic decisions like intertemporal financial choice, the ‘attention/focusing’ effect of both prior cognitively demanding activity and prior assignment of a primary reward can improve decision-making.

Publish or Teach ? The Role of the Scientific Environment on Academics’ Multitasking

Yann Kossi, Jean-Yves Lesueur, Mareva Sabatier, Working paper GATE 2013-15
The scientific environment might influence university researchers’ job designs. In a principal–agent model, researchers must choose between substitutable tasks, publishing or teaching, according to their individual abilities and the scientific and pedagogical context that exists in their universities. This proposed model shows that scientific production can increase, regardless of researchers’
abilities, if the scientific environment favours agglomeration effects. The authors test these predictions using an original data set of French economics professors that reveals their individual investments in both teaching and publishing. The econometric results confirm that the tasks conflict and that the scientific context affects researchers’ investments in each task.

Value judgments and economics expertise

Antoinette Baujard, Working paper GATE 2013-14
This paper tackles the problem of the demarcation of value judgments in
economic expertise. Is it possible to disentangle values from facts, or neutral
scientific assertions from value-laden judgments, in the context of economic
expertise ? If not, why not ? And if it is, under what conditions ? First, drawing
on concepts from analytic philosophy, the paper highlights the interdependencies
between descriptive, evaluative, and prescriptive judgments.
Second, drawing notably on social studies of science, the paper proposes a
definition of ‘expertise’, and translates this into a list of successive stages
wherein these different types of judgments are involved. A backward analysis
of these stages is provided in order to identify where values stand, and
who holds them. Third, reconsidering the positions of neutrality in economics
(Mongin 2006), the paper defends the ‘weak non-neutrality’ view
in the context of expertise, and concludes with reflections on what could be
done to address the problem of democratic legitimacy raised by the difficulty
of demarcation.

Technological interdependence between south american countries : a spatial panel data growth model

Carolina Guevara, Corinne Autant-Bernard, Working paper GATE 2013-13
This study examines how the dissemination of research and development (R&D) and technology affected economic performance in different South American countries from 1990 to 2010. The objective is to understand the relationship between countries in the process of international technology diffusion, i.e. measuring externalities and identifying the mechanisms through which technology is transferred.
To answer these questions, we consider the Schumpeterian growth model proposed by Ertur and Koch (2011). This framework accounts for the interdependences between countries (resulting from R&D externalities) from both a theoretical and an empirical point of view. With this spatial panel model, we assess the extent to which one country’s productivity affects the
productivity of other countries in the region and test the effectiveness of R&D in terms of direct and indirect impact on the economy. Different specifications of the spatial weight matrix are considered in order to investigate the different mechanisms of technological diffusion.
The originality of this study lies firstly through the use of R&D measures that allow different sources of funding to be distinguished. In particular, we can thus assess the role of R&D expenditure from national sources in comparison with R&D expenditure from foreign sources which, in the context of developing countries, is a key issue. In addition, we provide an assessment of the role of absorptive capacity in terms of research expenditure or investment in
human capital on the productivity levels of countries in the region.
The results suggest that of the various factors determining South America’s economic performance, public sector funded R&D investments and, to a lesser extent, private sector funded R&D, have a positive impact on these countries’ productivity. In contrast, however, foreign investment in research does not produce the expected benefits. We also observe that there are significant international spillovers from R&D activities. The ability to disseminate technologies and to take advantage of these international spillovers, however, differs from one country to another. Our estimates indicate that Brazil has positioned itself as the main actor in the region in terms of technological diffusion, while Bolivia is the country most likely to benefit from these
spillover effects.

Network Formation and Geography : Modelling Approaches, Underlying Conceptions, Recent and Promising Extensions

Corinne Autant-Bernard, Cilem Selin Hazir, Working paper GATE 2013-12
Due to the strong polarisation of economic activities in space and rise in collaborative behaviour, increasing attention has recently been devoted to the
relationship between geography and network formation. The studies conducted on this topic reveal a high variation in terms of methodologies. Putting special emphasis on R&D networks, the aim of this chapter is to review the different methods and assess their ability to address the issues raised by the relationship between network and space. We first discuss the different facets of the relationship between geography and networks. Then, we detail the methodological approaches and their capability to test each effect of geography on network formation. We argue that the effect of distance on dyads have received the major attention so far, but the development of block modelling and top-down approaches opens new research perspectives on how distance or location might affect formation of more complex structures. Moreover, recent improvement in temporal models also offers opportunities to better separate spatial effects from that of influence over time.

Interactions entre stratégies de promotion et fusions

Laurent Granier, Working paper GATE 2013-11
De nombreuses études analysent les phénomènes de fusion en prenant en compte les variables stratégiques des firmes telles que les prix ou les quantités de vente. Or, peu d’études font le lien entre les stratégies de promotion et les fusions. Pourtant, les dépenses mondiales de promotion se porteront à 525 milliards de dollars en 2013 (Zenithoptimedia, 2012). Ceci nous incite à établir un modèle théorique étudiant l’influence de la promotion sur les incitations à fusionner. A l’instar de Friedman (1983a et 1983b), nous introduisons deux types de promotions, l’une étant prédatrice et l’autre coopérative. Nous trouvons que les incitations à fusionner différent de celles existantes dans les
modèles de concurrence en prix (Brito, 2003).

Promotions prédatrice et coopérative sur le marché des médicaments

Laurent Granier, Sébastien Trinquard, Working paper GATE 2013-10
Ce papier propose un modèle de différenciation horizontale afin d’analyser la
concurrence en promotion sur le marché pharmaceutique. La promotion pharmaceutique cible à la fois le médecin et le patient. Néanmoins, la nature de ces stratégies diffère : la promotion orientée vers le consommateur (POC) élève la demande de marché et la promotion orientée vers le médecin (POM) augmente la part de marché.
Dans un cadre théorique, nous obtenons un résultat principal. D’une part, la profitabilité de la POM s’élève avec les dépenses de POC du concurrent, et celle de la POC baisse avec les dépenses de POM de son concurrent.

Tarif forfaitaire de responsabilité : quels impacts sur le pharmacien ?

Carine Franc, Laurent Granier, Sébastien Trinquard, Working paper GATE 2013-09
L’objectif de cet article est d’étudier l’impact du tarif forfaitaire de responsabilité (TFR) sur la part de la marge du grossiste attribuée au pharmacien et sur l’effort de substitution entre marque et générique. Nous considérons une situation dans laquelle le génériqueur vend directement son générique au pharmacien et le laboratoire de marque vend son princeps par l’intermédiaire d’un grossiste. Nous supposons que les produits sont verticalement différenciés
et nous résolvons un jeu en deux étapes. A la première étape, le génériqueur détermine la part de la marge du grossiste qu’il consent au pharmacien afin de l’inciter à substituer et, si un tarif forfaitaire de responsabilité est introduit, les firmes se concurrencent en prix. A la seconde étape, le pharmacien choisit son effort de substitution. Nous montrons que l’introduction du TFR augmente la part de la marge du grossiste allouée au pharmacien par le génériqueur, mais diminue l’effort de substitution du pharmacien.

Tax Evasion and emotions : An empirical test of re-integrative shaming theory

Giorgio Coricelli, Elena Rusconi, Marie Claire Villeval, Working paper GATE 2013-08
Shaming can be either of two types, shaming that becomes stigmatization of
the offender and favors his exclusion from the community, or shaming that is followed by forgiveness and reintegration of the deviant. Here we test experimentally these aspects of shaming theory with a repeated tax-payment game, in which the shaming “ritual” consisted of displaying the evader’s picture in addition to charging monetary sanctions. Results show that when cheating is made public and the contravener is not successively reintegrated, the total amount of cheating is significantly increased compared to when cheating is made public but publicity is immediately followed by reintegration. The
former condition is associated with more intense negative emotions related to cheating. This suggests that the employment of a social shaming mechanism may be an effective, albeit very sensitive, tool in the hands of policy makers.

Threshold of Preference for Collusion and Interconnection Fees in Different Market Structures : the Tunisian Mobile Market Case

Sami Debbichi, Walid Hichri, Working paper GATE 2013-07
We present a Cournot model that compares the critical threshold of collusion in Duopoly and Oligopoly Markets where the actors are private, mixed or public. We assume that the incentive critical threshold for collusion depends on the interconnection fees. The different threshold values calculated in each Market structure are then estimated, using the OLS method, with variables related to the Tunisian market structures and prices. The Econometric estimation of the different threshold values is consistent with our theoretical results. Our findings can be used by the decision makers to control collusion, by acting on the level of interconnection fees for each market structure and by implementing the suitable market liberalization policies in this sector.

Productivité et mobilité des inventeurs prolifiques : une approche comparative des systèmes d’innovation de quatre grands pays asiatiques (Chine, Corée, Japon, Taiwan)

Christian Le Bas, William Latham, Dmity Volodin, Working paper GATE 2013-06
Dans ce texte nous décrivons et comparons les systèmes d’innovation de quatre grands pays asiatiques (Chine, Corée, Japon, Taiwan) à partir de quelques caractéristiques des inventeurs les plus productifs de ces pays. On mobilise le modèle évolutionniste de production de connaissance par recombinaisons pour expliquer la productivité, la mobilité et la valeur des inventions de ces inventeurs prolifiques. Les données de brevets de la base du NBER permettent d’estimer une série de relations. Nos principaux résultats sont : validité pour tous les pays de la loi expliquant la valeur des inventions par la productivité de l’inventeur, la mobilité inter firmes ne joue aucun rôle sur la productivité des inventeurs au Japon et en Corée, elle a un impact positif sur leur productivité en Chine et à Taiwan, la mobilité internationale des inventeurs prolifiques joue un rôle dans la détermination de la valeur des inventions à Taiwan.

Physicians’ balance billing, supplemental insurance and access to health care

Izabela Jelovac, Working paper GATE 2013-05
Some countries allow physicians to balance bill patients, that is, to bill a fee above the one that is negotiated with, and reimbursed by the health authorities. Balance billing is known for restricting access to physicians’ services while supplemental insurance against balance billing amounts is supposed to alleviate the access problem. This paper analyzes in a theoretical setting the consequences of balance billing on the fees setting and on the inequality of access among the users of physicians’ services. It also shows that
supplemental insurance against the expenses associated with balance billing, rather than alleviating the access problem, increases it.

Cooperation among local governments to deliver public services : a “structural” bivariate response model with fixed effects and endogenous covariate

Edoardo di Porto, Vincent Merlin, Sonia Paty, Working paper GATE 2013-04
Cooperation among local governments has been encouraged to enable the aggregation of resources and improved public sector efficiency. However, if cooperation through the joint delivery of local public services is likely to be welfare enhancing for the agglomeration, but will lead to losses for one of the parties, it is unlikely that the losing municipality will cooperate. Using a unique panel dataset of 30,000 French municipalities for 1995-2003, we estimate the relationship between cooperation decision and the fiscal revenues raised to provide local public goods. We employ a new econometric strategy based on Lee (1978), developing a non linear method controlling for fixed effect, endogenous covariates and cluster standard error. We find evidence that a positive difference between the expected fiscal revenues of a cooperating locality and the actual revenues realized by an isolated locality significantly increases the probability of joining an inter-municipal community.

Urbanisation and Migration Externalities in China

Pierre-Philippe Combes, Sylvie Démurger, Shi Li, Working paper GATE 2013-03
We evaluate the role that cities play on individual productivity in China. First, we
show that location explains a large share of nominal wage disparities. Second, even after controlling for individual and -firms characteristics and instrumenting city characteristics, the estimated elasticity of wage with respect to employment density is about three times larger than inWestern countries. Land area and industrial specialisation also play a significant role whereas the access to external markets does not. Therefore, large agglomeration economies prevail in China and they are more localised than in Western countries. Third, we -find evidence of a large positive impact of the local share of migrants on local workers’wages. Overall, these results strongly support the productivity gains that can be expected from further migration and urbanisation in China.

Strategic manipulability of self-­selective social choice rules

Mostapha Diss, Working paper GATE 2013-02
We provide exact relations giving the probability of individual and coalitional
manipulation of three specific social choice functions (Borda rule, Copeland rule, Plurality rule) in three-alternative elections when the notion of self-selectivity is imposed. The results suggest that the Borda rule is more vulnerable to coalitional manipulation than the Copeland rule and the Plurality rule. However, Plurality rule seems to be more vulnerable to individual manipulability when the number of voters is greater than a certain threshold value. In addition, the probability of individual and coalitional manipulation tends to vanish significantly when the notion of selfs-electivity is imposed.

Drug launch timing and international reference pricing

Nicolas Houy, Izabela Jelovac, Working paper GATE 2013-01
This paper analyzes the timing decisions of pharmaceutical firms to launch a new
drug in countries involved in international reference pricing. We show three important features of launch timing when all countries reference the prices in all other countries and in all previous periods of time. First, there is no withdrawal of drugs in any country and in any period of time. Second, there is no strict incentive to delay the launch of a drug in any country. Third, whenever the drug is sold in a country, it is also sold in all countries with larger willingness to pay. We then show that the three results do not hold when the countries only reference a subset of all countries. The first two results do not hold when the reference is on the last period prices only.

2012

The geometry of voting power : weighted voting and hyper-­ellipsoids

Nicolas Houy, William S. Zwicker, Working paper GATE 2012-39
In cases where legislators represent districts that vary in population, the design of fair legislative voting rules requires an understanding of how the number of votes cast by a legislator is related to a measure of her influence over collective decisions. We provide three new characterizations of weighted voting, each based on the intuition that winning coalitions should be close to one another. The locally minimal and tightly packed characterizations use a weighted Hamming metric. Ellipsoidal separability employs the Euclidean metric : a separating hyperellipsoid contains all winning coalitions, and omits losing ones. The ellipsoid’s proportions, and the Hamming weights, reflect the ratio of voting weight to influence, measured as Penrose-Banzhaf voting power. In particular, the spherically separable rules are those for which voting powers can serve as voting weights.

External vulnerabilities and economic integration. Is the Union of South American Nations a promising project ?

Andrea Bonilla Bolanos, Working paper GATE 2012-38

This article addresses the reactions of the Union of South American Nations (UNASUR) economies to external shocks. Because it was conceived as a political alliance, the UNASUR is likely to be a promising integration project. Thus, assessing the union from an economic perspective is essential. Using a structural vector autoregression (SVAR) approach, this study assesses the external monetary, commercial and -financial vulnerability of the bloc members, together with their preferences for stabilization tools (monetary or fi-scal instruments) and the level of convergence. The results reveal mutual weaknesses to overcome and a considerable synchronization level within the UNASUR. Evidence of positive integration prospects is found.

De la question coloniale chez les anciens et néo-institutionnalistes

Abdallah Zouache, Working paper GATE 2012-37

L’article propose une analyse comparative du traitement de la question coloniale par les anciens et les néo-institutionnalistes nord-américains. Dans le cas des anciens institutionnalistes, le sujet colonial est indissociable de la question raciale. L’article montre également une convergence conceptuelle entre les deux traditions autour d’une explication culturaliste de la dynamique institutionnelle. Les anciens et les néo-institutionnalistes mettent au premier plan le rôle de la culture religieuse comme facteur explicatif de l’émergence des institutions efficaces. La convergence entre anciens et néo-institutionnalisme sur le rôle de la culture dans la sélection et l’évolution des institutions efficaces illustre l’ambigüité de la relation entre race et culture.

Temporal stability of risk preference measures

Katerina Straznicka, Working paper GATE 2012-36

We examine the temporal stability of risk preference measures obtained by
different elicitation methods in a controlled laboratory experiment at two distinct
times. Our results indicate remarkable temporal stability of risk measures at the
aggregated level and temporal instability at the individual level. We control
for the impact of, first, personality traits, and second, performance realized in
a market game. When better market performers demonstrate more stable risk
preferences, the impact of personality traits is marginal.

Bubbles and Incentives : An Experiment on Asset Markets

Stéphane Robin, Katerina Straznicka, Marie Claire Villeval, Working paper GATE 2012-35

We explore the effects of competitive incentives and of their time horizon on the
evolution of both asset prices and trading activity in experimental asset markets. We compare i) a no-bonus treatment based on Smith, Suchanek and Williams (1988) ; ii) a short-term bonus treatment in which bonuses are assigned to the best performers at the end of each trading period ; iii) a long-term bonus treatment in which bonuses are assigned to the best performers at the end of the 15 periods of the market. We find that the existence of bonus contracts does not increase the likelihood of bubbles but it affects their severity, depending on the time horizon of bonuses. Markets with long-term bonus contracts experience lower price deviations and a lower turnover of assets than markets with either no bonuses or long-term bonus
contracts. Short-term bonus contracts increase price deviations but only when markets include a higher share of male traders. At the individual level, the introduction of bonus contracts increases the trading activity of males, probably due to their higher competitiveness. Finally, both mispricing and asset turnover are lower when the pool of traders is more risk-averse.

Mutual Insurance Networks in Communities

Pascal Billand, Christophe Bravard, Sudipta Sarangi, Working paper GATE 2012-34

We study the formation of mutual insurance networks in a model where every agent who obtains more resources gives a fixed amount of resources to all agents who have obtained less resources. The low resource agent must be directly linked to the high resource agent to receive this transfer. We identify the pairwise stable networks and efficient networks. Then, we extend our model to situations where agents differ in their generosity with regard to the transfer
scheme. We show that there exist conditions under which in a pairwise stable network agents who provide the same level of transfers are linked together, while there are no links between agents who provide high transfers and agents who provide low transfers.

Payments for Ecological Restoration and Internal Migration in China : The Sloping Land Conversion Program in Ningxia

Sylvie Démurger, Haiyuan Wan, Working paper GATE 2012-33

This paper analyses the impact of the Sloping Land Conversion Program (SLCP) on rural labor migration in China. We use recent survey data from Ningxia Hui Autonomous Region and a difference-in-difference approach to assess the impact of the policy on labor migration decision. We find a significant effect of the policy : the migration probability increase due to the SLCP policy
amounts to 17.5 percentage points in 2008. Furthermore, we highlight the role of policy duration in strengthening the impact of the program on migration. We also find that young, male and Hui nationality individuals are more likely to be impacted by the policy.

Les émissions de CO2 du Brésil - L’impact du secteur UTCATF (usage des terres, changementd’affectation des terres et foresterie)

Jérôme Trotignon, Working paper GATE 2012-32

L’Equation de Kaya exprime les émissions de CO2 d’un pays en fonction de facteurs économique, démographique et énergétique. Plusieurs travaux décomposent par période, à partir de cette équation, les effets sur les émissions brésiliennes des variables de population, de PIB par tête, d’intensité énergétique (contenu en énergie du PIB) et d’intensité carbonique (contenu en carbone de l’énergie). Mais ils ne tiennent pas compte des émanations de CO2 engendrées par le secteur UTCATF. Pour pallier cet inconvénient et mieux éclairer les enjeux des politiques climatiques, nous proposons une analyse de décomposition des facteurs d’évolution des émissions qui inclut les statistiques du secteur UTCATF. Son influence dans la variation des émissions totales s’avère prédominante, aussi bien comme stimulant sur la période de déforestation massive de 1994-2000, que comme modérateur de 2000 à 2005, année où s’ébauche le programme de déforestation évitée.

L’impact des politiques d’exonérations territoriales : méthodes d’évaluation et résultats

Nathalie Havet, Working paper GATE 2012-31

Cet article propose une revue de la littérature sur l’efficacité des expériences de politiques d’éxonérations ou d’allègements de charges sociales ciblées sur les territoires aux Etats-Unis et en France. Elle montre que leurs résultats sont mitigés en termes de créations nettes d’emplois, de créations d’entreprises et de retours à l’emploi des chômeurs de ces zones. Pour la France, les évaluations sur les Zones Franches Urbaines (ZFU) concluent à un faible impact positif sur l’activité locale alors que celle sur les Zones de Redynamisation Rurale (ZRR) à aucune retombée significative. Le régime dérogatoire dans les DOM, certes le plus coûteux, n’a malheureusement pas encore fait l’objet d’-évaluation ex-post faute de données -fiables disponibles. Les travaux existants montrent par ailleurs que l’évaluation de tels dispositifs doit relever deux d-e-s pour être de bonne qualité : d’une part, définir convenablement un groupe de contrôle auquel les zones bénéficiant des dispositifs pourront être comparées ; d’autre part, rendre compte correctement, dans les données analysées, du périmètre des zones traitées.

Migration, Remittances and Rural Employment Patterns : Evidence from China

Sylvie Démurger, Li Shi, Working paper GATE 2012-30
This paper explores the rural labor market impact of migration in China using crosssectional data on rural households for the year 2007. A switching probit model is used to estimate the impact of belonging to a migrant-sending household on the individual occupational choice categorized in four binary decisions : farm work, wage work, self-employment and housework. The paper then goes on to estimate how the impact of migration differs across different types of migrant households identified along two additional lines : remittances
and migration history. Results show that individual occupational choice in rural China is responsive to migration, at both the individual and the family levels, but the impacts differ : individual migration experience favors subsequent local off-farm work, whereas at the family level, migration drives the left-behinds to farming rather than to off-farm activities. Our results also point to the interplay of various channels through which migration influences rural employment patterns.

Wage Growth and Job Mobility in the Early Career : Testing a Statistical Discrimination Model of the Gender Wage Gap

Philippe Belley, Nathalie Havet, Guy Lacroix, Working paper GATE 2012-29
The paper focuses on the early career patterns of young male and female workers. It investigates potential dynamic links between statistical discrimination, mobility, tenure and wage profiles. The model assumes that it is more costly for an employer to assess female workers’ productivity and that the noise/signal ratio tapers off more rapidly for male workers. These two assumptions yield numerous theoretical predictions pertaining to gender wage gaps. These predictions are tested using data from the 1979 cohort of the National Longitudinal Survey of Youth. As predicted by our statistical discrimination model, we find that men and women have the same wage at the start of their career, but that female wages grow at a slower rate, creating a gender wage gap. Also consistent with our model, we find that mean wages are
higher for workers who keep their job, while wage growth is stronger for workers who change job.

Signaling the value of a business concept : Evidence from a structural model with Brazilian franchising data

Muriel Fadairo, Cintya Lanchimba, Working paper GATE 2012-28
Within the wide literature regarding franchising, a few studies were devoted to the adverse selection phenomena in the franchise relationships, and to the signaling explanation of the franchisors’ organizational choices. Previous empirical works concluded that the signaling framework is not well adapted to
study franchising. However, most of the empirical literature has focused on developed countries. This empirical paper deals with the case of Brazil. We estimate on recent franchising data a structural equation model capturing the simultaneous influences of a valuable business concept. The paper provides evidence that the signaling theory is adequate to understand the organizational choices regarding the ownership structure of franchised networks in emerging
markets. The estimation results suggest indeed that the Brazilian franchisors use signaling devices, and that the necessity to signal the value of a business concept affects the organizational choices at the network level.

Mobility, Productivity and Patent Value for Asian Prolific Inventors : China, Japan, Korea and Taiwan, 1975 – 2010

William Latham, Christian Le Bas, Dmitry Volodin, Working paper GATE 2012-27
We provide new insights into the role of individual inventors in innovation. We focus our analysis on prolific inventors in China, Japan, Korea and Taiwan. We analyse patents issued by the U.S. Patent and Trademark Office to thousands of inventors from those countries between 1975 and 2010 to investigate the
role that mobility plays in the behaviour of prolific inventors. We hypothesize that mobility affects : (1) the productivity of prolific inventors and, (2) the value of their inventions. We compare findings for each of the countries with those for inventors in North America, Western Europe and Australia & New Zealand.

Trust and Trustworthiness under the Prospect Theory : A field experiment in Vietnam

Quang Nguyen, Marie-Claire Villeval, Hui Xu, Working paper GATE 2012-26
We study the influence of risk and time preferences on trust and trustworthiness by conducting a field experiment in Vietnamese villages and by estimating the parameters of the Cumulative Prospect Theory and of quasi-hyperbolic time preferences. We find that while probability sensitivity or risk aversion do not affect trust, loss aversion influences trust indirectly by lowering the expectations of return. Also, more risk averse and less present biased
participants are found to be trustworthier. The experience of receiving remittances influences behavior and a longer exposure to a collectivist economy tend to reduce trust and trustworthiness.

The impact of inter-municipal cooperation on local public spending ?

Quentin Frère, Matthieu Leprince, Sonia Paty, Working paper GATE 2012-25
The purpose of this paper is to assess the effects of inter-municipal fiscal cooperation on municipal public spending, based on the French experience. We estimate a model of municipal spending choice using panel data and spatial econometrics for municipalities over the period 1994-2003. We provide two main results. First, inter-municipal cooperation has no significant impact on
the level of municipal public spending, which suggests that cooperation does not achieve its goal of reducing municipal spending by the sharing of local responsibilities. Second, there are no spending interactions between municipalities belonging to the same inter-municipal community. This is in
line with the goal assigned to cooperation in terms of internalization of spatial externalities. However, our results show that benefit spillovers remain highly significant outside inter-municipal communities, suggesting that inter-municipal communities remain too small.

Performance in distribution systems : What is the influence of the upstream firm’s organizational choices ?

Muriel Fadairo, Cintya Lanchimba Lopez, Working paper GATE 2012-24
This paper studies the performance of distribution networks as the result of a range of organizational choices made by the upstream firm. The analytical part of the paper surveys the vast literature devoted to franchising and to dual distribution. From this framework, several testable propositions are derived, linking the networks performance to the organizational choices. Three complementary criteria of performance are taken into account : the internationalization rate, the expansion rate, the market share. The paper provides evidence that these criteria are empirically related. Thus, a system of simultaneous equations is defined, free of endogeneity relating to the explanatory variables. The estimations on recent French data by means of the three-least squares method provide robust results, and show that the type of distribution network, the number of company-owned units in the network, the type of sector, and the choice to manage several networks simultaneously affect the performance in distribution systems.

Strategic interactions in public R&D across EU-15 countries : A spatial econometric analysis

Hakim Hammadou, Sonia Paty, Maria Savona, Working paper GATE 2012-23
The aim of this paper is to test the presence of strategic interactions in government spending on Research and Development (R&D), among EU-15 countries. We add to the literature on public choice strategic interactions
in general, and to work on R&D spending in particular. We take account of traditional and some rather overlooked factors related to countries’ public R&D spending, including (i) the international context – i.e. Lisbon strategy ; (ii) country characteristics - the National System of Innovation ; (iii) national similarities in relation to (a) trade and economic size and (b) sectoral specialization. Sectoral specialization is likely to affect government spending, depending on the mechanisms of complementarity or substitution between
public and private R&D. Using a dynamic spatial panel model in which spatial matrices are specified in terms of traditional Euclidean distance, and sectoral specialization proximity, we confirm the existence of strategic interactions in relation to R&D spending among European countries with similar economic,
international trade and sectoral structure perspectives. Unlike the results for strategic interactions in public choice, geographic proximity seems not to affect interactions related to public spending on R&D.

On the Price Effects of Horizontal Mergers : A Theoretical Interpretation

Emilie Dargaud, Carlo Reggiani, Working paper GATE 2012-22
Horizontal mergers are usually under the scrutiny of antitrust authorities due to their potential undesirable effects on prices and consumer surplus. Ex-post evidence, however, suggests that not always these effects take place and even relevant mergers may end up having negligible price effects. The analysis of mergers in the context of non-localized spatial competition may offer a further interpretation to the ones proposed in the literature : in this framework both positive and zero price effects are possible outcomes of the merger activity.

Mesure et caractérisation de l’attention à l’autre en situation d’interaction stratégique : l’apport de l’économie expérimentale

Stéphane Robin, Working paper GATE 2012-21
Dans certaines situations, les comportement réels des individus peuvent apparaître comme des anomalies dans le cadre de la théorie classique de l’agent rationnel. La théorie comportementale vise à expliquer ces anomalies, en particulier celles relatives aux préférences sociales. L’objet de cet article est de montrer comment l’économie expérimentale a permis de mieux mesurer et de mieux caractériser ces préférences. Sur la base d’une revue très sélective d’expériences, nous montrons comment s’est établi un dialogue fructueux entre l’analyse des comportements en laboratoire et la théorie autour de la question de l’attention à l’autre en situation d’interaction stratégique.

Compte-­rendu de l’expérimentation des votes par approbation et par note lors des élections présidentielles françaises le 22 avril 2012 à Saint-­Etienne, Strasbourg et Louvigny

Antoinette Baujard, Frédéric Gavrel, Herrade Igersheim, Jean-­François Laslier,
Isabelle Lebon, Working paper GATE 2012-20
A l’occasion du premier tour des élections présidentielles du 22 avril 2012, les
électeurs de trois communes françaises ont été invités à tester in situ le vote par
approbation ainsi que trois versions du vote par évaluation. Ce papier a pour objet de présenter les résultats de cette expérimentation. Après correction des
biais de représentativité locaux et nationaux, deux enseignements principaux
s’en dégagent. Le vote par approbation conduit à un classement des candidats
qui diffère nettement du scrutin uninominal et, quelle que soit l’échelle des notes
retenue, le vote par évaluation tend à accentuer cette divergence.

Does fiscal coopération increase local tax rates in urban areas ?

Sylvie Charlot, Sonia Paty, Virginie Piguet, Working paper GATE 2012-19
The main purpose of this paper is to assess the effects of fiscal cooperation on local taxation in a decentralized country, using the French experience in urban municipalities. We estimate a model of tax setting for local business tax using spatial and dynamic econometric techniques, for the period 1993-2003 and an unbalanced data set. As predicted by the theory, we find that reducing the number of municipalities is likely to limit tax competition and, as a consequence, increase local business tax rates.

Firm technological innovation persistence : Organizational innovation matters

Naciba Haned, Christian Le Bas, Caroline Mothe, Uyen Nguyen, Working paper GATE 2012-18
Organizational innovation favors technological innovation, but does it also influence technological innovation persistence ? This article investigates empirically the pattern of technological innovation persistence and tests the potential impact of organizational innovation using firm-level data from three waves of the French Community Innovation Surveys. Evidence shows a positive effect of organizational innovation on technological innovation persistence, according to various measures of organizational innovation. Moreover, this impact is more significant for complex innovators (i.e., those who innovate in
both products and processes). These results highlight the complexity of managing organizational practices with regard to the firm’s technological innovation. They also add to comprehension of the drivers of innovation persistence, through a focus on an often forgotten dimension of innovation in a broader sense.

Aging and Attitudes Towards Strategic Uncertainty and Competition : An Artefactual Field Experiment in a Swiss Bank

Thierry Madies, Marie Claire Villeval, Malgorzata Wasmer, Working paper GATE 2012-17
We study the attitudes of junior and senior employees towards strategic uncertainty and competition, by means of a market entry game inspired by Camerer and Lovallo (1999). Seniors exhibit higher entry rates compared to juniors, especially when earnings depend on relative performance. This difference persists after controlling for attitudes towards non-strategic
uncertainty and for beliefs on others’ competitiveness and ability. Social image matters, as evidenced by the fact that seniors enter more when they predict others enter more and when they are matched with a majority of juniors. This contradicts the stereotype of risk averse and less competitive older employees.

Moral Hypocrisy, Power and Social Preferences

Marie-Claire Villeval, Aldo Rustichini, Working paper GATE 2012-16
We show with a laboratory experiment that individuals adjust their moral principles to the situation and to their actions, just as much as they adjust their actions to their principles. We first elicit the individuals’ principles regarding the fairness and unfairness of allocations in three different scenarios (a Dictator game, an Ultimatum game, and a Trust game). One week later, the same individuals are invited to play those same games with monetary compensation. Finally in the same session we elicit again their principles regarding the fairness and unfairness of allocations in the same three scenarios.

Our results show that individuals adjust abstract norms to fit the game, their role and the choices they made. First, norms that appear abstract and universal take into account the bargaining power of the two sides. The strong side bends the norm in its favor and the weak side agrees : Stated fairness is a compromise with power. Second, in most situations, individuals adjust the range of fair shares after playing the game for real money compared with their initial statement. Third, the discrepancy between hypothetical and real behavior is larger in games where real choices have no strategic consequence (Dictator game and second mover in Trust game) than in those where they do
(Ultimatum game). Finally the adjustment of principles to actions is mainly the fact of individuals who behave more selfishly and who have a stronger bargaining power.

The moral hypocrisy displayed (measured by the discrepancy between statements and actions chosen
followed by an adjustment of principles to actions) appears produced by the attempt, not necessarily conscious, to strike a balance between self-image and immediate convenience.

The Contribution of Housing to the Dynamics of Inequalities

Modibo Sidibé, Working paper GATE 2012-15
This paper proposes a unified framework for the analysis of inequalities. In contrast to the former literature on inequalities, housing is included as a major determinant of individual saving behavior. Disparities across locations affect individual outcomes in both labor and education markets. In a Bewley-Huggett-Aiyagari type model where several frictions are represented, the model allows for segmentation between homeowners and renters in the housing market, imperfection in the capital market and residential mobility over the life-cycle. Moreover, individual location is assumed to affect labor productivity, wealth accumulation via the dynamics of housing prices and the human capital acquisition process of the next generation. The dynamics of prices combined to
bequest motive provide the perfect framework to understand the tenure choice of individuals. Furthermore, the fixity of housing supply in each neighborhood combined with borrowing constraints prevent some households from living in their preferred area, which leads to segregation. Using this general framework, the paper contributes to the understanding of the complex relationships between labor, housing and education markets. Finally, several experiments aimed at decreasing the level of inequalities at the individual and location level are provided.

Les déterminants de l’innovation dans les services : une analyse à partir des formes d’innovation développées

Michelle Mongo, Working paper GATE 2012-14
This article makes a study of the influence of innovation determinants on their ability to innovate and the different types of innovation (technological and non-technological) developed within service sector. The statistics are provided from the community Innovation Survey. The estimation method is a probit with selection from the framework proposed by Heckman (1979) and refined by Van De Ven and Van Praag (1981). The first equation explains the innovative capacity and the second explicates the implementation of different types of innovation (technological and / or non-technological). The analysis focuses on the comparison of innovation behaviors in service sector and industry. The results demonstrate that the determinants of innovation ability are similar for service sector and industry and the differences are issued from different forms of innovation developed. More precisely, it comes from the orientation of each sector towards more or less technological innovation. The results bring up the question of the appropriateness of current policies of innovation especially in R&D’ promotion. The author proposes to take into account the consideration of
different types of activities and innovation for this policy and suggests to focus on the lowtechnological but innovative and non-technological activities like intellectual services.

The information content of the WTP-WTA gap : An empirical analysis among severely ill patients

Nathalie Havet, Magali Morelle, Alexis Penot, Raphaël Remonnay, Working paper GATE 2012-13
Large disparities between willingness to pay (WTP) and willingness-to-accept (WTA) are commonly encountered in empirical studies and raise some important controversies. Nevertheless, the relationships between WTA and WTP can help understand not only how a service is valued but also how it can be
substituted or how its loss can be resisted. The purpose of this study was to examine cancer patients’ preferences for blood transfusion setting from the perspective of WTA and WTP. A contingent valuation (CV) survey was administered to 139 patients receiving transfusions either at home or in the hospital. While few patients (6%) gave WTP protest responses, the WTA approach generated more protest responses (18%). The WTA-WTP discrepancy was confirmed. One in four of the patients reported that no amount was deemed
sufficient to compensate for the renunciation of their home BT management. The main determinants of WTP were significantly different from WTA predictors. Our results suggest that individuals’ strategies towards constructing WTP and WTA differ in terms of determinants, reasoning, use of information and economic
rationality. They give empirical evidence on the usefulness to elicit both WTP and WTA responses in healthsurveys to help understand the economic evaluation of health technology assessment and care organization.

Using Affiliation Networks to Study the Determinants of Multilateral Research Cooperation Some empirical evidence from EU Framework Programs in biotechnology

Cilem Selin Hazir, Corinne Autant-Bernard, Working paper GATE 2012-12
This paper studies multilateral cooperation networks among organizations and work on a two-mode representation to study the decision to participate in a consortium. Our objective is to explain the underlying processes that give rise to multilateral collaboration networks. Particularly, we are interested in how heterogeneity in organizations’ attributes plays a part and in the geographical
dimension of this formation process. We use the data on project proposals submitted to the 7th Framework Program (FP) in the area of Life sciences, Biotechnology and Biochemistry for Sustainable Non-Food. We employ exponential random graph models (p* models) (Frank and Strauss, 1986 ; Wasserman and Pattison, 1996) with node attributes (Agneessens et al., 2004), and we make use of extensions for affiliation networks (Wang et al., 2009). These models do not only enable handling variability in consortium sizes but also relax the assumption on tie/triad independence. We obtained some preliminary results indicating institutional types as a source of heterogeneity affecting participation decisions. Also, these initial results point out that organizations take their potential partners’ participations in other projects into account in giving their decision ; organizations located in the core European countries tend to participate in the same project ; the tendency to preserve the
composition of a consortium across projects and the tendency of organizations with the same institutional type to co-participate are not significant.

Les bénéficiaires de la validation des acquis de l’expérience : l’exemple de la Région Rhône-Alpes

Nathalie Havet, Working paper GATE 2012-11
En 2002, les pouvoirs publics français ont mis en place un dispositif de reconnaissance officielle des compétences acquises par l’expérience (VAE), qui permet d’obtenir tout ou partie d’un diplôme sans devoir suivre de cursus de formation initiale ou de formation continue. Leur principal objectif était de lutter contre l’exclusion au travail avec une priorité à accorder au public non qualifié. Dans ce contexte, notre article cherche à savoir non seulement quels sont réellement les profils des candidats qui se lancent dans une telle procédure, mais aussi s’il existe des caractéristiques individuelles qui facilitent ou au contraire entravent les chances de réussite au processus de VAE. Pour ce faire, les données sur l’ensemble des individus ayant déposé un dossier de candidature à la VAE entre 2007 et 2009 auprès des principaux valideurs de la région Rhône-Alpes ont été mobilisées. On propose d’estimer des modèles économétriques distinguant les différentes étapes du processus (recevabilité, passage en jury, validation, durée entre recevabilité et jury) et les sélections successives des candidats. En particulier, comme les décisions de validation rendues par les jurys sont uniquement observées pour les candidats s’étant effectivement présentés devant les jurys, le cadre économétrique retenu est un probit ordonné avec équation de sélection. Il introduit notamment de la corrélation entre les termes d’erreurs de ses équations, ce qui permet de traiter adéquatement les biais de sélection potentiels et de contrôler l’hétérogénéité individuelle inobservée. Il ressort que même si la VAE semble avoir du mal à trouver sa place parmi les dispositifs d’aide à l’emploi pour les chômeurs, elle remplit son rôle de qualification des personnes peu ou non-diplômées.

Compétition académique et modes de production scientifique des économistes français : Quelques résultats économétriques du dispositif P.E. S.

Yann Kossi, Jean-Yves Lesueur, Mareva Sabatier, Working paper GATE 2012-10
This paper studies the determinants of scientific productivity from an original database of French academic economists observed in 2009 and 2010. All individuals of this data set were involved in the first and second experiences of the “Prime excellence Scientifique”. This academic competition was introduced by the French academic system to select best publishers and PhD supervisors. The context of this competition conforms to the tournament theory in two points. The scientific productivity was observed in a same period from 2005 to 2010 and competitors are selected and ranked by their relative performance in publications using the same criteria (National Scientific Research Center ranking). We construct a scientific production index and estimate productivity
regressions using censored data models (Tobit). We control for individual characteristics like age, gender, environmental context, initial publication performance (h index), in line with stylized facts and theoretical foundations like Lotka law, Matthews effect and scientific life cycle productivity. The paper brings two novel dimensions in the literature. The first is done by controlling for the multi-task activities of tenure and associated professor when evaluating their scientific production. We control for the time allowed to alternative occupation like teaching, doctoral supervision, administrative and scientific responsibilities. The second outcome of the paper consists to evaluate the impact of network
spillovers externalities induced by local competences accumulated in economics departments (coauthorship, peer externalities...), on each individual performance.

Mapping Modes of Rural Labour Migration in China

Sylvie Démurger, Working paper GATE 2012-09
Internal labour migration has become an important part of the process of China’s
industrialization and urbanisation in the 2000s. Using micro data for the year 2007, this chapter attempts to contribute to a better understanding of the motives of and the constraints to labour mobility in China. Drawing on various empirical investigations at the household level, it examines both the decision and the level of migration and provides a mapping of the main factors driving different types of labour mobility across space (by destination) and time
(by duration).

Hoarding of International Reserves and Sterilization in Dollarized and Indebted Countries : an effective monetary policy ?

Layal Mansour, Working paper GATE 2012-08
The primary aim of this paper is to explore the effectiveness of Hoarding International Reserves and Sterilization in dollarized and indebted countries such as Turkey and Lebanon, by measuring the sterilization coefficient, and the offset coefficient. It also focuses on exploring the link between the sources of Reserves and the external debt. Using monthly data collected from the International Monetary Fund and from the Central Banks of Turkey and
Lebanon between January 1994 and February 2011, we applied a 2SLS regression models and we identified explanatory variables that enabled us to estimate the aforementioned coefficients. Our results showed that despite their theoretical practice of sterilization policy, economic constrains of these countries contribute to weaken the efficacy expected from monetary policies.

Ingratiation and Favoritism : Experimental Evidence

Stéphane Robin, Agnieszka Rusinowska, Marie-Claire Villeval, Working paper GATE 2012-07
We provide experimental evidence of workers’ ingratiation by opinion conformity
and of managers’ discrimination in favor of workers with whom they share similar opinions. In our Baseline, managers can observe both workers’ performance at a task and opinions before assigning unequal payoffs. In the Ingratiation treatment, workers can change their opinion after learning that held by the manager. In the Random treatment, workers can also change opinion but payoffs are assigned randomly, which gives a measure of non-strategic
opinion conformism. We find evidence of high ingratiation indices, as overall, ingratiation is effective. Indeed, managers reward opinion conformity, and even more so when opinions cannot be manipulated. Additional treatments reveal that ingratiation is cost sensitive and that the introduction of performance pay for managers as well as a less noisy measure of performance increase the role of relative performance in the assignment of payoffs, without eliminating the reward of opinion conformity.

Competition between clearing houses on the European market

Marie-Noëlle Calès, Laurent Granier, Nadège Marchand, Working paper GATE 2012-06
For several years, European financial markets have been the place of important mutations. These mutations have hit both stock markets themselves as well as the infrastructures including all necessary services for the transactions on financial securities. Among the market services to which the investors appeal, is the clearing of the orders, the service which allows reducing exchanged flows while guaranteeing their safety. The market of clearing became strongly
competitive with the arrival of new Pan European clearing houses. Confronted with aggressive pricing policies, “incumbent” clearing houses have to adopt new strategies : merger, simple or mutual links of interoperability. We develop a model of industrial organization to appreciate the consequences of these various strategies in terms of price and social welfare. The strategic incentives of clearing houses and their effects on their customers, i.e. investors, are observed by means of a sequential game. We show that the interoperability agreements are never reached at the equilibrium in spite of the fact that the "European code of good practice" of postmarkets incites them to accept this type of agreements. On the other hand, a merger between incumbent clearing houses can occur under some conditions. The merger is beneficial to these
last ones as well as to the investors, but it is unfavourable to the Pan European clearing houses.

The impact of commitment on nonrenewable resources management with asymmetric information on costs

Julie Ing, Working paper GATE 2012-05
We study the optimal contracts (payment and extraction path) implemented by a regulator unable to commit to long term contracts that delegates the extraction of a nonrenewable resource to a firm. The regulator wishes to maximize the tax revenue and does not know the firm’s efficiency which is private information. As the regulator is unable to commit, the ratchet effect appears. We show that the contracts implemented depend on which types of firms exhaust the stock. If both types exhaust the stock, the contracts are fully separating and similar to those implemented under full commitment. The efficient firm produces the first best and gets an informational rent whereas the inefficient one produces lower quantity. If the stock is not exhausted, the contracts are semi separating and the inefficient firm produces higher quantity than under full commitment and the tax revenue is lower. However, those contracts may not be incentive compatible if the discount factor and the second period price are high and thus the regulator may be forced to implement a pooling contract.

Quitting and Peer Effects at Work

Julie Rosaz, Robert Slonim, Marie-Claire Villeval, Working paper GATE 2012-04
This paper studies the influence of peers on the extensive margin of effort at work by means of a real-effort experiment in which subjects have to decide on the intensity of effort and when to stop working. Participants perform a task alone or in the presence of a peer. The feedback on the co-worker’s output is manipulated and we vary whether the two workers can communicate. We find that when communication is allowed, the average productivity per unit of time and the quitting time are not increased but the presence of a peer causes workers to stay longer and to quit at more similar times. Peer effects on the extensive margin of effort derive more from a sociability effect, i.e. a reduction of the social distance between co-workers that could make the other’s presence more valuable, than from performance or quitting time comparisons

Intensité de l’investissement privé en R&D dans les pays de l’OCDE : Impact et complémentarité des mesures de soutien financier

Benjamin Montmartin, Working paper GATE 2012-03
Les politiques de soutien financier à la R&D se sont multipliées depuis les années 80 dans les pays de l’OCDE avec une utilisation croissante des mesures fiscales. Cependant, il existe assez peu d’études mesurant l’impact macroéconomique de ces mesures sur l’investissement privé en R&D. L’objectif de cet article est d’analyser l’impact et la complémentarité des politiques internes de soutien financier à la R&D mais aussi l’influence des politiques externes sur l’intensité de la R&D financée par le secteur privé. En utilisant
une base de données couvrant 25 pays de l’OCDE sur la période 1990-2007, nos estimations en panel dynamique montrent que seules les politiques internes de soutien financier indirect (incitations fiscales) influencent significativement l’intensité de la R&D privée. Si les instruments de soutien direct (subventions
et prêts) n’ont pas d’impact significatif, il apparaît que leur renforcement nuirait à l’efficacité des mesures indirectes. Alors que la R&D publique externe semble dynamiser l’investissement privé en R&D, les politiques extérieures de soutien financier (direct et indirect) ne montrent pas d’influence significative.

Inflation Targeting under Heterogeneous Information and Sticky Prices

Cheick Kader M’baye, Working paper GATE 2012-02
Under what conditions should a central bank adopt an inflation targeting regime ?
This is the main question we address in this paper. A large part of the literature
puts forward that these regimes should have to be adopted, as they yield higher
macroeconomic performances. We analyze the issue of optimal inflation targeting in a new theoretical framework, which conciliates the interaction between the degree of price stickiness, and the degree of strategic complementarities in fi-rms’ price setting.
We show that adopting a target for inflation, crucially depends on the sequential
but complementary importance of the model’s parameters. In particular, we show that strategic complementarities appear to be the fi-rst driving force. When they are low, the central bank must adopt an inflation targeting regime whatever the importance of other parameters in the model. By contrast, when the degree of strategic complementarities is high, adopting a target for in
ation depends on both the degree of price stickiness and the precision of central bank’s information about the fundamentals of the economy. When prices are
exible enough, adopting an inflation target is never optimal. However, when prices are strongly sticky, and the central bank holds precise information about the fundamentals, the central bank should adopt an explicit target for inflation.

Are complex innovators more persistent than single innovators ? An empirical analysis of innovation persistence drivers

Christian Le Bas, Nicolas Poussing, Working paper GATE 2012-01
This paper examines the persistence of innovation behaviour at the firm level
(manufacturing and services sectors). We attempt to answer the question : does being successful in past innovation activities increase the probability of being successful in current innovation activities ? We contribute to the literature by explicitly distinguishing between single and complex innovation strategies. Using two waves of the Community Innovation Survey (2002–2004, 2006–2008) conducted in Luxembourg, the regressions show that complex innovators are more inclined to remain persistent innovators than single innovators.
Within the group of single innovators pure product innovators have an advantage over pure process innovators. The results support the idea that the differences in innovation strategies across firms are important for understanding the firm innovation dynamics.

2011

Reducing overreaction to central banks’ disclosures : theory and experiment

Romain Baeriswyl, Camille Cornand
Financial markets are known for overreacting to public information. Central banks can reduce this overreaction either by disclosing information to a fraction of market participants only (partial publicity) or by disclosing information to all participants but with ambiguity (partial transparency). We show that, in theory, both communication strategies are strictly equivalent in the sense that overreaction can be indi-erently mitigated by reducing the degree of publicity or by reducing the degree of transparency. We run a laboratory experiment to test whether theoretical predictions hold in a game played by human beings. In line with theory, the experiment does not allow the formulation of a clear preference in favor of either communication strategy. This paper, however, makes a case for partial transparency rather than partial publicity because the latter seems increasingly diffcult to implement in the present information age and is associated with discrimination as well as fairness issues.

Symmetry of External Shock responses within the Andean Community of Nations : A SVAR Approach

Andrea Gabriela Bonilla Bolaños
This article studies the symmetry in reactions of the Andean Community of Nations (CAN) economies to external shocks in order to analyze the group’s evolution towards economic integration. The undertaking of a Monetary Union project in South America enhances the usefulness of evaluating shocks within this region according to the Optimal Currency Area Theory. A Structural VAR model with non-recursive contemporaneous restrictions is built for each economy and a correlation analysis is performed. The results evidence that the CAN has evolved positively towards structural convergence.

Government Spending, Monetary Policy, and the Real Exchange Rate

Hafedh Bouakez, Aurélien Eyquem
A robust prediction across a wide range of open-economy macroeconomic models is that an unanticipated increase in public spending in a given country appreciates it currency in real terms. This result, however, contradicts the findings of a number of recent empirical studies, which instead document a significant and persistent depreciation of the real exchange rate following an expansionary government spending shock. In this paper, we rationalize the findings of the empirical literature by proposing a small-open-economy model that features three key ingredients : incomplete and imperfect international financial markets, sticky prices, and a not-too-aggressive monetary policy. The model predicts that in response to an unexpected increase in public expenditures, the risk-adjusted long-term real interest rate falls, causing the real
exchange rate to depreciate. We establish this result both analytically, within a special version of the model, and numerically for the more general case.

A Tale of Tax Policies in Open Economies

Stéphane Auray, Aurélien Eyquem, Paul Gomme
Recent financial crises in Europe as well as the periodic battles in the U.S. over
the debt ceiling point to the importance of fiscal discipline among developed countries.
This paper develops an open economy model, calibrated to the U.S. and a subset of the EMU, to evaluate the impact of various permanent tax changes. The first set of experiments considers a targeted one percentage point reduction in the government deficit-to-GDP ratio through raising one of : the consumption tax, the labor income tax, or the capital income tax. In terms of welfare, the consumption tax is found to be the least costly of the tax increases. A second set of experiments looks at deficit-neutral tax changes : partially replacing the capital income tax with either a higher labor income tax or higher consumption tax ; and partially replacing the labor income tax with an increased consumption tax. Reducing reliance on capital income taxation is welfare-enhancing, although it leads to short term losses. Reducing labor income taxation improves international competitiveness and is welfare-improving.

Evidence on the Efficacy of School-Based Incentives for Healthy Living

Harold E. Cuffe, William T. Harbaugh, Jason M. Lindo, Giancarlo Musto, Glen R. Waddell
We analyze the effects of a school-based incentive program on children’s
exercise habits. The program offers children an opportunity to win prizes if they walk or bike to school during prize periods. We use daily child-level data and individual fixed effects models to measure the impact of the prizes by comparing behavior during prize periods with behavior during non-prize periods. Variation in the timing of prize periods across different schools allows us to estimate models with calendar date fixed effects to control for day-specific attributes, such as weather and proximity to holidays. On average, we find that being in a prize period increases riding behavior by sixteen percent, a large impact given that the prize value is just six cents per participating student. We also find that winning a prize lottery has a positive impact on ridership over subsequent weeks ; consider heterogeneity across prize type, gender, age, and calendar month ; and explore differential effects on the intensive versus extensive margins.

Sector-based explanation of vertical integration in distribution systems ; Evidence from France

Magali Chaudey, Muriel Fadairo, Gwennaël Solard
Based on recent data concerning the French distribution networks in retail and services, this paper highlights several stylized facts relating to the sector-based differences in the organizational choices.
Until now this issue has not been studied in the economical literature. This paper provides an analytical framework derived from the theory of contracts, and evidence for the French case.

Saint-Simonism and Utilitarianism : the history of a paradox. Bentham’s Defence of Usury under Saint-Amand Bazard’s Interpretation

Michel Bellet
This article reveals and studies the connections between Bentham’s Defence of Usury (1787) and Saint-Amand Bazard (1791-1832), a founder of Saint-Simonianism. We first traces Bazard’s exposure to Bentham through his unknown friendship with Bentham’s publisher Etienne Dumont. After introducing in details the Saint-Simonian views on interest and money, we examines the significance of Bazard’s translation of Defence of Usury and his shared opposition against usure laws. We explain why the puzzling reference to Benthamite utilitarianism is not fortuitous but appears to justify a common ground between Bentham’s utilitarism and Saint-Simonianism. This connection did not survive the July Revolution.

Monetary Policy and the Dutch Disease in a Small Open Oil Exporting Economy

Mohamed Tahar Benkhodja
In this paper, we compare, …rst, the impact of a windfall and a boom sectors on
the economy of an oil exporting country and their welfare implications ; in a second step, we analyze how monetary policy should be conducted to insulate the economy from the main impact of these shocks, namely the Dutch Disease. To do so, we built a Multisector DSGE model with nominal and real rigidities. The main fi…nding is that Dutch disease effect arise after spending and resource movement effects in the following cases : i) flexible prices and wages both in the case of a windfall and in the case of a boom ; ii) flexible wage and sticky price only in the case of a …fixed exchange rate. In other cases, Dutch disease effect can be avoided if : prices are sticky and wages are flexible when the exchange rate is flexible ; iii) prices and wages are sticky whatever the objective of the central bank is in both cases : windfall and boom. We also compare the source of fluctuation that leads to Dutch disease effect and we conclude that the windfall leads to a strong e¤ect in terms of de-industrialization compared to a boom. The choice of flexible exchange rate regime also helps to improve welfare.

Value of invention, prolific inventor productivity and mobility : evidence from five countries, 1975-2002

William Latham, Christian Le Bas, Dmitry Volodin
The aim of this paper is to provide new insights into (1) the determinants of the value of inventions and (2) the role that mobility plays in the behavior of prolific inventors, whom we identify based on the number of patents exceeding a threshold of productivity. We examine mobility in two dimensions : from firm to firm (inter-firm) and from one technical field to another. We exploit data on patents filed by inventors from five countries (France, the UK, Germany, the US and Japan) in the US Patent and Trademark office during the period from 1975 to 2002. From our regressions we obtain a rich set of results. In particular we show that : (1) as predicted by evolutionary theory, inventor productivity is a
positive determinant of invention value, (2) inter-firm mobility is a consistently positive determinant of productivity and (3) technological mobility is a negative determinant. The last implies that the more specialized an inventor is, the higher his productivity is.

Technological innovation persistence : Literature survey and exploration of the role of organizational innovation

Christian Le Bas, Caroline Mothe, Thuc Uyen Nguyen‐Thi
In this paper, we will review the literature on technological innovation persistence and provide a general theoretical framework to analyze the main determinants of this innovative behavior. Moreover, no previous empirical study has taken into account organizational innovation practices as possible
determinants of innovation persistence. We will therefore include them, as previous studies have shown the interaction effects between the two types of innovation, and produce empirical results on technical innovation persistence. A multinomial probit model was used to estimate the likelihood of belonging to
each of the three longitudinal innovation profiles. Results confirm the differentiated impact of determinants on process and technological innovation persistence, and the effect of R&D intensity, R&D cooperation and competition intensity. As hypothesized, we also found that organizational innovation is a
determinant factor for innovation persistence and, more generally speaking, for technological innovation, in particular organizational practices such as knowledge management and external partnerships.

Homeownership and job-match quality in France

Carole Brunet, Nathalie Havet
Our empirical study stems from previous research on the inter-relations between residential status and microeconomic labour market outcomes. It focuses on employees and assesses the a priori ambiguous e-ect of homeownership on job-match quality. We use the French data set of the 1995-2001 European Community Household Panel to build a subjective measure of job downgrading. We estimate a recursive trivariate probit with partial
observability that simultaneously models the residential status choice, its impact on the probability of being downgraded, and the selection into employment. The comparison with simpler models indicates that taking into account the selection into employment and controlling unobservable individual heterogeneity are of prime necessity to obtain robust conclusions.

Inflation Targeting, Exchange Rate and Financial Globalization

Muhammad Naveed Tahir
In this paper I investigate the impact of financial globalization on the
behaviour of inflation targeting emerging market economies with respect to
exchange rate – do central banks respond to exchange rate movements or not. The study uses small open-economy New Keynesian model à la Gali and Monacelli (Rev Econ Stud 72:707-734, 2005), and employs multi-equation GMM
technique. The study finds that the response of central bank to the exchange rate in case of Brazil, Chile, Mexico and Thailand is statistically significant while insignificant for Korea and Czech Republic. Theoretically, it should not be so as even under flexible inflation targeting central bank responds to inflation deviation and output gap ; I think that the peculiar characteristics of emerging markets like ; fear of floating, weak financial system and low level of central
bank credibility make exchange rate important for these economies.

The reform of European securities settlement systems : Towards an integrated financial market

Marie‐Noëlle Calès, Dominique Chabert, Walid Hichri, Nadège Marchand
The European Central Bank (ECB) will offer to banks in 2013 an european shared platform for securities settlement, named TARGET 2 Securities (T2S), in order to open the national financial markets. The financial crisis did not change the ECB agenda. This paper develops a spatial competition model to understand the impact of this new organisation on european post-trading services. We analyse the incentives of the Central Securities Depositaries (CSD) to move to T2S when they become competitors in the market for settlement services and
remain in a monopoly position for depository services. Settlement and depository services are complementary goods, because banks have to pay for these two services to buy or sell a security. We show that such a reform should induce a decrease in the settlement price and more generally in post-trading prices, but that prices depend strongly on market organisation. Under certain conditions, partial adhesion would make prices increase. This configuration appears as a Nash equilibrium. As CSDs are free to adhere to T2S, the ECB might be forced to regulate.

Coordination and Cooperation in Investment Timing with Externalities ?

Etienne Billette de Villemeur, Richard Ruble, Bruno Versaevel
We characterize sequential (preemption) and simultaneous (coordination) equilibria, as well as joint-value maximizing (cooperation) solutions, in a model of investment timing allowing for externalities in both flow pro…ts and investment costs. For two ex-ante symmetric …rms, either preemption or attrition occur depending on the size of the investment externality. Coordination is less likely with more discounting, as in a repeated game, and more likely with higher growth and volatility. Optimal cooperation involves either monopoly or duopoly investment, the latter being either symmetric or asymmetric. Finally, these characterizations are validated by applications to standard speci…cations of capacity accumulation and of R&D investment. In the former setup, coordination is likelier if installed capacities and lumpy investments are both large. With R&D input choices, if investment synergies are large, coordination and cooperation result in the same outcomes.

Do Women Prefer a Co-operative Work Environment ?

Peter Kuhn, Marie-Claire Villeval
Are women disproportionately attracted to work environments where cooperation rather than competition is rewarded ? This paper reports the results of a real-effort experiment in which participants choose between an individual compensation scheme and a team-based payment scheme. We find that women are more likely than men to select team-based compensation in our baseline treatment, but women and men join teams with equal frequency when we add an efficiency advantage to team production. Using a simple structural discrete choice framework to reconcile these facts, we show that three elements can account for the observed patterns in the team-entry gender gap : (1) a gender gap in confidence in others (i.e. women are less pessimistic about their prospective teammates’ relative ability), (2) a greater responsiveness among men to instrumental reasons for joining teams, and (3) a greater “pure” preference for working in a team environment among women.

Self-Confidence and Teamwork : An Experimental Test

Isabelle Vialle, Luis Santos-Pinto, Jean-Louis Rullière
We use a laboratory experiment to study how perceptions of skill influence
teamwork. Our design is based on Gervais and Goldstein (2007) theory of
teams. Team output is increasing in skill and in effort, skill and effort are
complements, and workers’ effort choices are complements. An overconfident
agent thinks that his skill is higher than it actually is. We find that the
presence of overconfi-dent workers in teams is beneficial for firms since it raises
effort provision and team output. We also find that overconfidence leads to
a Pareto improvement in workers’ payoffs. In contrast, underconfidence is
detrimental to firms as well as workers.

The 2007-2008 financial crisis : Is there evidence of disaster myopia ?

Camille Cornand, Céline Gimet
The disaster myopia hypothesis is a theoretical argument that may explain why crises are a recurrent event. Under very optimistic circumstances, investors disregard any relevant information concerning the increasing degree of risk. Agents’ propensity to underestimate the probability of adverse outcomes
from the distant past increases the longer the period since that event occurred and at some point the subjective probability attached to this event reaches zero. This risky behaviour may contribute to the formation of a bubble that bursts into a crisis. This paper tests whether there is evidence of disaster
myopia during the recent episode of financial crisis in the banking sector. Its contribution is twofold. First, it shows that the 2007 financial crisis exhibits disaster myopia in the banking sector. And second, it identifies macro and specific determinant variables in banks’ risk taking since the beginning
of the years 2000.

Lies and Biased Evaluation : A Real-Effort Experiment

Julie Rosaz, Marie-Claire Villeval
This paper presents the results of a laboratory experiment in which workers
perform a real-effort task and supervisors report the workers’ performance to the experimenter. The report is non verifiable and determines the earnings of both the supervisor and the worker. We find that not all the supervisors, but at least one third of them bias their report. Both selfish black lies (increasing the supervisor’s earnings while decreasing the worker’s payoff) and Pareto white lies (increasing the earnings of both) according to Erat and Gneezy (2009)’s terminology are frequent. In contrast, spiteful black lies (decreasing the
earnings of both) and altruistic white lies (increasing the earnings of workers but decreasing those of the supervisor) are almost non-existent. The supervisors’ second-order beliefs and their decision to lie are highly correlated, suggesting that guilt aversion plays a role.

Trade Integration and Business Tax Differentials : Theory and Evidence from OECD Countries

Nelly Exbrayat, Benny Geys
Building on recent contributions to the New Economic Geography literature, this paper analyses the relation between asymmetric market size, trade integration and business income tax differentials across countries. First, relying on a foot-loose capital model of tax competition, we illustrate that trade integration (or decreasing trade costs) reduces the importance of relative market size for differences in the extent of corporate taxation between countries. Then, using a
dataset of 26 OECD countries over the period 1982-2004, we provide supportive evidence of these theoretical predictions : i.e., market size differences are strongly positively correlated with corporate income tax differences across countries but, crucially, trade integration weakens this link. These findings are obtained controlling for the potential endogeneity of trade integration and are robust to various alternative specifications and robustness checks.

Left-Behind Children and Return Decisions of Rural Migrants in China

Sylvie Démurger, Hui Xu
This paper examines how left-behind children influence return migration in China. We first present a simple model that incorporates economic and non-economic motives for migration duration (or intentions to return). Based on Dustmann (2003b), the parent is assumed to be altruistic and to care about the prospects of her left-behind children. We then propose two complementary empirical tests based on an original dataset from a rural household survey carried out in Wuwei County (Anhui province, China) in fall 2008. We first use a discrete-time proportional hazard model to estimate the determinants of migration duration for both on-going migrants with incomplete length of duration and return migrants with complete length of duration. Second, we apply a binary Probit model to study the return intentions of on-going migrants. Both models find consistent results regarding the role of left-behind children as a significant motive for return. First, left-behind children are found to pull their
parents back to the village, the effect being stronger for pre-school children. Second, sons are found to play a more important role than daughters in reducing migration duration.

Coordinating cross-border congestion management through auctions : An experimental approach to European solutions

Céline Jullien, Virginie Pignon, Stéphane Robin, Carine Staropoli
Competition among producers within an integrated electricity system is impeded by any limited transmission capacity there may be at its borders. Two alternative market mechanisms have recently been designed to organize the allocation of scarce transmission capacity at cross-border level : (i) the “implicit auction”, already used in some countries, and (ii) the “coordinated explicit auction”, proposed by the European Transmission System Operators (ETSO) but not implemented yet. The main advantage of the explicit auction is that it allows
each country to keep its own power exchange running. In the European institutional context, this is seen as a factor of success of a market reform, although the explicit auction (not coordinated) is known to be less efficient than the implicit mechanism. The addition of a coordination dimension in the explicit auction is intended to solve problems of international flows. We use an experimental methodology to identify and compare in a laboratory setting
the efficiency properties of these two market mechanisms, given a market structure similar to the existing one in continental Europe, i.e. a competitive oligopoly. Our main result highlights the inefficiency of the coordinated explicit auction compared to the performance of the implicit auction, measured in terms of both energy prices and transmission capacity allocation. We suggest that the poor performance of the coordinated explicit auction in the laboratory is due to the level of individual expectations about both energy and transmission
prices that the mechanism demands. One solution to resolve this problem when the mechanism is implemented in the field would be to design an additional and secondary market for “used” transmission capacity.

Spatial econometrics of innovation : Recent contributions and research perspectives

Corinne Autant-Bernard
Preliminary introduced by Anselin, Varga and Acs (1997) spatial econometric tools are widely used in economic geography of innovation. Taking into account spatial autocorrelation and spatial heterogeneity of regional innovation, this paper analyzes how these techniques have improved the ability to quantify knowledge spillovers, to measure their spatial extent, and to explore the underlying mechanisms and especially the interactions between geographical and social distance. It is also argued that the recent developments of spatio-dynamic models opens new research lines to investigate the temporal dimension of both spatial knowledge flows and innovation networks, two issues that should rank high in the research agenda of the geography of innovation.

Comparative risk aversion of different preferences

Richard Ruble
An article about Kihlstrom and Mirman about comparative risk aversion with many goods is critiqued. If "more risk averse" is interpreted as signifying that an individual is less willing to accept a median-preserving spread, then risk aversion cannot be compared across individuals with different preferences. If it is interpreted as signifying that an individual has a greater directional risk premium, then risk aversion may be compared across individuals with different preferences, in particular in partial equilibrium analysis.

On the timing of vertical relationships

Etienne Billette de Villemeur, Richard Ruble, Bruno Versaevel
In a real option model, we show that the standard analysis of vertical relationships transposes directly to investment timing. Thus, when a firm undertaking a project requires an outside supplier (e.g., an equipment manufacturer) to provide it with a discrete input to serve a growing but incertain demand, and if the supplier has market power, investment occurs too late from an industry standpoint. The distortion in firm decisions is characterized by a lerner-type index, and we show how market growth rate and volatility affect the extent of the distortion. If the initial market demand is high, greater volatility increases the effective investment cost and results in lower value for both firms. Vertical restraints can restore efficiency. For instance, the upstream firm can induce entry at the correct investment threshold by selling a call option on the input. Otherwise, if two downstream firms are engaged in a preemption race, the upstream firm sells the input to the first investor at a discount which is chosen in such a way that the race to preempt exactly offsets the vertical distortion, and this leader invests at the optimal time.

CSR firm profiles and innovation : An empirical exploration with survey data

Rachel Bocquet, Christian Le Bas, Caroline Mothe, Nicolas Poussing
This paper explores the relationship between different Corporate Social Responsibility (CSR) strategies and innovation. Using a survey carried out on CSR behavior of Luxembourg firms, we found two types of firms as far as CSR practices are concerned. Cluster 1 firms adopted CSR practices to achieve economic goals without resorting to the formalization of these practices. In
contrast, cluster 2 firms “learn CSR by doing” and by establishing CSR procedures and tools. Then we match Community Innovation Survey (CIS) data and specific data collected on CSR clusters. We estimate Logit models to explain the different types of innovation (product, process, organizational). In comparison with the firms which don’t adopt CSR, firms in Cluster 1 are more innovative in terms of product and process once we control for firm characteristics and innovation drivers while firms in cluster 2 tend to reject innovation in process and adopt organizational innovation. These results, which show the link between the various CSR practices and innovation types, have
important consequences in terms of managerial recommendations and public policy support for innovation.

Tax Evasion, Welfare Fraud, and the « Broken Windows » Effect : An Experiment in Belgium, France and the Netherlands

Mathieu Lefebvre, Pierre Pestieau, Arno Riedl, Marie‐Claire Villeval
In a series of experiments conducted in Belgium (Wallonia and Flanders), France and the Netherlands, we compare behavior regarding tax evasion and welfare dodging, with and without information about others’ behavior. Subjects have to decide between a "registered" income, the realization of which will be known to the tax authority for sure, and an "unregistered" income that will only be known with some probability. This unregistered income comes from self-employment in the Tax treatment and from black labor supplementing some unemployment compensation in the Welfare treatment. Subjects have then to decide on wether reporting their income or not, knowing the risk od detection. The results show that (i) individuals evade more in the Welfare treatment than in the Tax treatment ; (ii) many subjects choose and option that allows for tax evasion or welfare fraud but report their income honestly anyway ; (iii) examples of low compliance tend to increase tax evasion while examples of high compliance exert no influence ; (iv) tax evasion is more frequent in France and the Netherlands ; Wallons evade taxes less than Flemish. There is no cross-country difference in welfare dodging.

Ramsey Policies in a Small Open Economy with Sticky Prices and Capital

Stéphane Auray, Beatriz de Blas, Aurélien Eyquem
This paper analyzes jointly optimal fiscal and monetary policies in a small open economy with capital and sticky prices. We allow for trade in consumption goods under perfect international risk sharing. We consider balanced-budget fiscal policies where authorities use distortionary taxes on labor and capital together with monetary policy using the nominal interest rate. First, as long as a symmetric equilibrium is considered, the steady state in an open economy is isomorphic to that of a closed economy. second, whereas sticky prices allocations are almost indistinguishable from flexible prices allocations, the open economydimension delivers results that are qualitatively similar to those of a closed economy but with significant quantitative changes. Fluctuations in terms of trade implied by complete international financial markets affect (i) consumption through changes in the consumption price index (CPI), (ii) hours through changes in the CPI-based real wage and (iii) capital accumulation through the relative price of capital goods. These wedges affect the volatility and persistence of optimal tax rates, and resulting allocations are quite different, as compared to a closed economy.

Endogenous Entry, International Business Cycles, and Welfare

Stéphane Auray, Aurélien Eyquem
This paper examines if taking into account changes in the number of producers, or equivalently changes in the product variety space over the business cycle, helps to understand and replicate international business cycle facts. To this end, we develop a two-country model in which the economy is driven by real and monetary policy shocks. If it is characterized by an endogenous number of firms and varieties, sticky prices and financial markets incompleteness. We show that these features are crucial to reproduce international business cycle statistics. We also evaluate the welfare implications of various monetary policies and highlight the importance for monetary policymakers to respond moderately to output fluctuations.

Emotions, Sanctions and Cooperation

Mateus Joffily, David Masclet, Charles N. Noussair, Marie Claire Villeval
We use skin conductance responses and self-reports of hedonic valence to
study the emotional basis of cooperation and punishment in a social dilemma. Emotional reaction to free-riding incites individuals to apply sanctions when they are available. The application of sanctions activates a "virtuous emotional circle" that accompanies cooperation. Emotionally aroused cooperators relieve negative emotions when they punish free riders. In response, the free-riders experience negative emotions when punished, and increase their subsequent level of cooperation. The outcome is an increased level of contribution that becomes the new standard or norm. For a given contribution level, individuals attain higher levels of satisfaction when sanctioning institutions are in place.

Income Segregation and Suburbanization in France : a discrete choice approach

Florence Goffette‐Nagot, Yves Schaeffer
This paper focuses on residential sorting by social and ethnic status in large French urban areas. Our objective is to assess the relative importance of two major determinants of segregation stressed by the economic literature (Bartolome and Ross, 2003 ; Brueckner et al., 1999) : (i) “Alonso sorting over space”, due to the trade-off between land consumption and accessibility to the central city and (ii) “Tiebout sorting over jurisdictions”, due to the taste for
local public goods and by extension for all kinds of local public amenities (e.g. neighborhood externalities). Our methodology draws on Schmidheiny (2006). First, a conditional logit model is estimated for each urban area, in which moving households are assumed to sort based on jurisdiction distance to the central city and jurisdiction mean of households’ incomes (as a proxy for the level of public amenities). Second, our estimation results are used to
simulate the counterfactual residential patterns that would prevail if, alternatively, one or the other of these mechanisms were inactive (setting the coefficients of the corresponding variables to zero). The contribution of each mechanism to the observed social and ethnic segregation is finally appreciated by comparing the values of dissimilarity indexes computed on the basis of the counterfactual households distributions and on the observed households
distribution. “Tiebout-sorting” emerges as the primary cause of social segregation among wage-earning households. On the contrary, “Alonso-sorting” appears to be the main driver of segregation between economically active and inactive households, as well as between Frenchcitizen and Foreign-citizen households.

Existence of Nash Networks and Partner Heterogeneity

Pascal Billand, Christophe Bravard, Sudipta Sarangi
In this paper, we pursue the work of H. Haller and al. (2005, [10]) and examine
the existence of equilibrium networks, called Nash networks, in the noncooperative two-way flow model (Bala and Goyal, 2000, [1]) with partner heterogeneous agents. We show through an example that Nash networks do not always exist in such a context. We then restrict the payoff function, in order to find conditions under which Nash networks always exist. We give two properties : increasing differences and convexity in the first argument of the payoff function, that ensure the existence of Nash networks. It is worth noting that linear payoff functions satisfy the previous properties.

Local Spillovers, Convexity and the Strategic Substitutes Property in Networks

Pascal Billand, Christophe Bravard, Sudipta Sarangi
We provide existence results in a game with local spillovers where the payoff function satisfies both convexity and the strategic substitutes property. We show that there always exists a stable pairwise network in this game, and provide a condition which ensures the existence of pairwise equilibrium networks. Moreover, our existence proof allows us to characterize a pairwise equilibrium of these networks.

On the Interaction between Heterogeneity and Decay in Two-way Flow Models

Pascal Billand, Christophe Bravard, Sudipta Sarangi
In this paper we examine the role played by heterogeneity in the popular “connections model” of Jackson andWolinsky (1996). We prove that under heterogeneity in values or decay involving only two degrees of freedom, all networks can supported as Nash. Moreover, we show that Nash networks may not always exist. In the absence of decay, neither result can be found in a model with value heterogeneity. Finally, we show that on reducing heterogeneity, both the earlier “anything goes” result and the non-existence problem disappear.

Resources Flows Asymmetries in Strict Nash Networks with Partner Heterogeneity

Pascal Billand, Christophe Bravard, Sudipta Sarangi
This paper introduces a partner heterogeneity assumption in the one-way flow model of Bala and Goyal (2000, [1]). Our goal consists in the characterization of strict Nash networks with regard to the set of resources obtained by players. We use the notion of condensation network which allows us to divide the population in sets of players who obtain the same resources and we order these sets according to the resources obtained. Accordingly, we can examine the relationship between heterogeneity and asymmetries in networks. We establish
that the nature of heterogeneity plays a crucial role on asymmetries observed in equilibrium networks.

Le ciblage d’inflation : un essai de comparaison internationale

Zied Ftiti, Jean-François Goux
La politique de ciblage d’inflation est un régime monétaire qui vise l’inflation. Sa pratique a été marquée par une grande stabilité observée aux débuts des années 90 et 2000. Un débat émerge sur l’efficacité et la performance économique de ce régime. De nombreuses recherches se sont intéressées à cette question sans pouvoir pour autant parvenir à un consensus ultime. L’objectif de ce papier est de contribuer à ce débat en clarifiant l’origine de ce régime monétaire et en proposant, par la suite, notre propre grille d’analyse quantitative. Nous avons recours à l’analyse de deux agrégats macroéconomique : l’inflation et la croissance économique selon différents échantillons. Dans un premier temps, nous évaluons l’évolution de ces deux grandeurs, dans tous les pays à ciblage d’inflation, entre la période précédant son adoption et la période post-adoption. Les résultats de cette première comparaison montrent sans exception que tous les pays à ciblage d’inflation ont eu un taux d’inflation plus faible et moins volatile. De même, nous prouvons que le ciblage d’inflation ne sacrifie pas la croissance économique en contre partie d’une faible volatilité d’inflation. Dans un second temps et pour des raisons de robustesse nous procédons à une comparaison des pays voisins deux à deux, dont l’un adoptant le régime de ciblage d’inflation et l’autre pratiquant une politique monétaire différente. Cette seconde comparaison montre que tous les pays à ciblage d’inflation sans exception ont connu de meilleures performances macroéconomiques que leurs voisins de non ciblage. A partir de ces résultats nous concluons à l’efficacité et la performance économique de cette politique monétaire à la fois pour les pays industrialisés et les pays émergents.

The evolution of patent functions : New trends, main challenges and implications for firm strategy

Pascal Corbel, Christian Le Bas
Recent publications in the field of Intellectual Property (IP) have shown that the previous literature did not grasp how complex patents are. The goal of this paper is to present an overview of all identified functions of patents and of the main strategic implications of such a complex picture. We first survey the main patent functions : innovation protection, functions related to trade and finance, defensive roles, and patent as an input in the innovation process.
We then define each function and analyse their main evolution trends in relation with the current environment. We finally identify the strategic implications of each function. We focus on the implications of the newly identified functions and on the interaction between the different functions.

Taxe carbone globale, effet taille de marché et mobilité des firmes

Nelly Exbrayat, Carl Gaigné, Stéphane Riou
Nous analysons l’impact et les déterminants d’une taxe carbone globale
dans une économie imparfaitement intégrée composée de pays de différente
taille. A l’aide d’un modèle de commerce et de localisation, nous montrons
tout d’abord que la concentration de firmes dans le pays disposant d’un
avantage de taille de marché accroît les émissions totales de C O2 . L’intro-
duction d’une taxe carbone globale conduit alors à des délocalisations de
firmes du grand pays vers le petit pays de sorte que même fixée à un taux
unique, une fiscalité carbone ne serait pas neutre du point de vue de la
géographie économique. Enfin, parce qu’elles conduisent à une réduction
des émissions mondiales de C O2 , ces relocalisations améliorent l’effcacité
environnementale de la taxe carbone.

A closer look at financial development and income distribution

Céline Gimet, Thomas Lagoarde-Segot
This paper analyzes the under-investigated relationship uniting financial development and income distribution. We use a novel approach taking into account for the first time the specific channels linking banks, capital markets and income inequality, the time-varying nature of the relationship, and reciprocal causality. We construct a set of annual indicators of banking and capital market size, robustness, efficiency and international integration. We then estimate the determinants of income distribution using a panel Bayesian structural vector autoregressive (SVAR) model, for a set of 49 countries over the 1994-2002 period. We uncover a significant causality running from financial sector development to income distribution. In addition, the banking sector seems to exert a stronger impact on inequality. Finally, the relationship appears to depend on characteristics of the financial sector, rather than on its size.

Global crisis and Financial destabilization in ASEAN countries. A microstructural perspective

Céline Gimet, Thomas Lagoarde-Segot
This paper investigates wether the ongoing financial crisis has destabilized the microstructures of ASEAN stock market. Using daily stock market data from 2007 to 2010, we first develop a set of monthly country-level liquidity, efficiency, international integration and volatility indicators. We then analyze the impact of global market volatility shocks on those indicators, using a set of Bayesian S-VAR models. Finally, forecast error variance decomposition analysis and impulse response function permits to identify the magnitude and the symmetry of ASEAN financial systems’ exposures to international shocks. Our results uncover significant and asymmetrical schock transmission channels. We draw implications for the design of future integration initiatives.

Why royalties ? Evidence from French distribution networks


Muriel Fadairo
This empirical note deals with the contractual design of relationships in distribution networks. In the framework of agency theory, I study the royalty rate as an incentive device for the upstream firm in maintaining brand-name value, using recent French data to estimate probit models. The results are consistent with the analytical framework.

Centralized Innovation Policy in an agglomeration and growth model : A welfare analysis


Benjamin Montmartin
Innovation policies are strategic tools for reinforcing long-term economic growth. If the literature highlights the need for coordination among national R&D policies, the need for transnational policies appears to be less clear. Using a model à la Martin and Ottaviano (1999), we conduct a welfare analysis in order to judge the effect of a centralized R&D subsidy policy. If theoretical results suggest that this policy can improve efficiency and equity, our welfare analysis shows that when there are few knowledge spillovers between countries, then the policy leads to a conflict of interest. In the case of strong international knowledge spillovers however, the conflict of interest disappears suggesting that innovation policies should first focus on the development of knowledge flows between countries.

2010

Contract Dynamics : Lessons from Empirical Analyses

Magali Chaudey
The recognition that contracts have a time dimension has given rise to a very abundant literature since the end of the 1980s. In such a dynamic context, the contract may take place over several periods and develop repeated interactions. Then, the principal topics of the analysis are commitment, reputation, memory and the renegotiation of the contract. Few papers have tried to apply the predictions of dynamic contract theory to data. The examples of applications introduced in this article show the relevance of the change from a static contractual framework to a dynamic one. In a dynamic context, contracts are more sophisticated and can include commitment or a better revelation of
the type of agent (insurance contract) ; contracts are more flexible (franchise contract) or offer a better measurement of information asymmetry and effort level (insurance or work contract).

The determinants of innovation adoption

Corinne Autant‐Bernard, Jean‐Pascal Guironnet, Nadine Massard
Using a sample of 46 000 EU firms from the Community Innovation Survey, this paper analyses the drivers of innovation adoption. In contrast to most empirical studies on innovation diffusion in which a specific technology is analyzed, this study covers several countries and industries in the European Union. Following Van de Ven and Van Praag (1981), Heckman’s method is applied in a context of binary endogenous variable to explain the choices made by firms regarding innovation. Distinctions are made between the internal generation of innovation and the adoption of innovation produced by others, as well as between different types of adoption (product vs. process and cooperation-based adoption vs.
isolated adoption). The study is focused on the impact of users’ features and their cooperation with suppliers on the adoption choices. The results point out that cooperation is a key driver of adoption choices. Usual determinants such as firm size, absorptive capability or exports would foster generation of innovation instead of adoption.

Updating beliefs with imperfect signals : experimental evidence

François Poinas, Julie Rosaz, Béatrice Roussillon
This article analyses belief updating when agents receive a signal that restricts the number of possible states of the world. We create an experiment on individual choice under uncertainty. In this experiment, the subject observes an urn, containing yellow and blue balls, whose composition is partially revealed. The subject has to assess the composition of the urn and form an initial belief. Then, he receives a signal that restricts the set of the possible urns from which the initial observed sample is drawn. Once again, he has to estimate the
composition of the urn. Our results show that, on the whole, this type of signal increases the frequency of correct assessment. However, differences appear between validating and invalidating signals (i.e. signals that either confirm or disprove the initial belief). The later significantly increase the probability to make a correct assessment whereas validating signals reduce the frequency of correct estimations. We find evidences of lack of persistence in choice under uncertainty. The literature shows that people may persist with their choice even when they are wrong. We show that they may also change even if they are right.

Earnings Differentials between the Public and the Private Sectors in China : Explaining Changing Trends for Urban Locals in the 2000s

Juan Yang, Sylvie Démurger, Shi Li
This paper analyzes the changes in public-private sector earnings differentials for local residents in urban China between 2002 and 2007. We find that earnings gaps across ownership have been reducing during this period and that the convergence trend has been in favor of the private and semi-public sectors as opposed to the public sector. This is in sharp contrast to what occurred at the
turn of the century, when employees of public administration and enterprises were found to enjoy a very much privileged situation. On the one hand, differences in endowments are found to play a growing role in explaining earnings differentials. On the other hand, although starting to become less
an issue, segmentation across ownership remains important, especially for high-wage earners.

Subsidy Policy for Innovation : A way to reach objectives of both higher growth and equity ?


Benjamin Montmartin
Since the Lisbon Agenda (2000), the European Union policies are increasingly
oriented towards innovation as attested to by the deep change of the new Regional Policy. This paper proposes an analysis of an innovation subsidy policy in an agglomeration and growth model à la Martin and Ottaviano (1999). In this two-regions model, we assume that the policy is implemented by a central authority that taxes the profit of industrial firms to subsidy employment in innovative activities. We show that the positive effects on growth and equity of such a policy, as highlighted by Martin (1999), hold in the case where the policy is not geographically differentiated. In the case where the government however grants larger subsidies to the poorer region in order to reduce the concentration of the innovative sector, we show that the policy can be inefficient if it is not of
sufficient magnitude.

La production scientifique des enseignants-chercheurs en économie : Quelques résultats économétriques issus du dispositif PES


Jean-Yves Lesueur
La littérature sur la mesure et les déterminants de la production scientifique des enseignantschercheurs s’est montrée particulièrement prolifique ces dix dernières années. Le cas français est particulièrement intéressant à étudier tant les successions de réformes en vue d’améliorer la position des universités françaises dans le classement de Shanghai se sont récemment succédées à un rythme effréné. La réforme du statut des enseignants chercheurs et l’application progressive de la loi du 10 août 2007 Liberté et Responsabilité des Universités ont ouvert un changement structurel profond dans le management des
ressources humaines au sein des universités françaises. Dans ce contexte, si la littérature s’est intéressée aux critères de mesure de la production scientifique, rares sont les études qui ont pu contrôler, lors de l’évaluation de la production scientifique, les multiples facettes qui animent l’activité d’un enseignant-chercheur à partir d’une même base statistique. La mise en place en France depuis 2009 de la Prime d’Excellence Scientifique (PES) offre une base de données originale et particulièrement adaptée à cette attente à deux niveaux. D’une part la procédure de sélection des candidats respecte les conditions d’une
logique de tournoi bien connue des économistes du travail. D’autre part la richesse des données permet de contrôler les différentes dimensions de l’activité des enseignants – chercheurs ainsi que leur environnement de recherche lors de l’étude des facteurs explicatifs de leur production scientifique. Nous exploitons dans cet article les données relatives aux candidats de la première campagne de la PES 2009 appartenant au domaine des sciences économiques. L’économétrie des données censurée est utilisée en mobilisant deux critères de
mesure de la production scientifique, l’un qualitatif l’autre quantitatif. Les résultats économétriques obtenus confirment l’existence d’un effet Saint Matthieu lié au cycle de vie de la production scientifique. L’étude complète les rares résultats délivrés par la littérature sur les économistes français.

Fusions endogènes : une revue de la littérature


Laurent Granier
This paper analyzes the literature concerning models of endogenous mergers. Traditional models of exogenous mergers analyze mergers as isolated phenomena. However, some empirical facts about M&A don’t seem to be explained in this literature. Models of endogenous mergers take into account all interactions created by merger decisions in an industry. By this way, they can give more reliable predictions. In order to better understand the literature,
we describe it in two points. First, we investigate models caracteristics. Second, we present the main predictions obtained in the literature.

How labor market rigidities shape business taxation in a global economy ?


Nelly Exbrayat, Carl Gaigné, Stéphane Riou
We investigate the impact of trade liberalization upon the taxation of capital
within a context of labor market rigidities. Using a model of trade and location, we show that labor market imperfections not only strengthen tax competition but also affect the relationship between trade integration and tax policies. Capital taxation follows a J-shaped relationship with trade costs when labor markets are flexible, whereas it may increase with falling trade costs in the presence of trade unions acting as Stackelberg leaders or playing simultaneously with governments. In addition, we analyze the outcome which arises from differences between the various countries’ labor market institutions. Trade liberalization reduces the international differences in wage and capital taxation, making the unionized country more attractive.

Predation 
in
 Off‐Patent
 Drug 
Markets


Laurent Granier, Sébastien Trinquard
In 2009, Sanofi-Aventis, whose generic subsidiary is Winthrop, merges with the
generic firm, Zentiva. This paper fills the gap in the theoretical literature concerning mergers in pharmaceutical markets. To prevent generic firms from increasing their market share, some brand-name firms produce generics themselves, called pseudo- generics. We develop a Cournot duopoly model by considering the pseudo-generics production as a mergers’ catalyst. We show that a brand-name company always has an incentive to purchase its competitor. The key insight of this paper is that the brand-name laboratory can increase its merger gain by producing pseudo-generics beforehand. In some cases, pseudo-generics would not otherwise be produced and this production is then a predatory strategy.

Stabilité-croissance et performance économique : quelle relation selon une revue de la littérature ?

Zied Ftiti
L’objectif de ce papier est de proposer une synthèse de la littérature traitant la relation entre volatilité et croissance. L’intérêt de ce papier consiste à montrer que cette littérature a évolué dans deux sens contradictoires et que la plupart des économistes retiennent les résultats d’un des courants, soit en raison d’une ignorance de la seconde théorie, soit en prenant le courant qui les arrange. La relation entre volatilité et croissance a évolué dans un premier temps dans le sens d’une relation positive, puis la littérature a évoluée vers une relation négative. Dans ce papier, nous montrons les fondements théoriques de l’évolution de cette littérature.

Biased Information and Effort

Julie Rosaz
We study the impact of information manipulation by a principal on the agent’s effort. In a context of asymmetric information at the principal’s advantage, we test experimentallythe principal’s willingness to bias (overestimate or under-estimate) the information she gives to her agent on his ability in order to motivate him to exert more effort.We find that i) principals do bias information, ii) agents trust the cheap-talk messages they receive and adjust their effort accordingly. Therefore, biased messages improve both the agent’s performance and thus the principal’s profit. This, however, does not increase efficiency. We also find that over-estimation occurs much more often than under-estimation. Making the signal costly in an additional treatment reduces this effect.

Physicians self selection of a payment mechanism : Capitation versus fee-for-service

Marie Allard, Izabela Jelovac, Pierre-Thomas Léger
The main question raised in this paper is whether GPs should self select their paymentmechanism or not. To answer it, we model GPs’ behavior under the most commonpayment schemes (capitation and fee-for-service) and when GPs can select one amongthose. Our analysis considers GPs heterogeneity in terms of both ability and sense ofprofessional duty. We conclude that when savings on specialists costs are the mainconcern of a regulator, GPs should be paid on a fee-for-service basis. Instead, whenfailures to identify severe conditions are the main concern, then payment self selection byGPs can be optimal.

Respect as an Incentive

Tor Eriksson, Marie-Claire Villeval
Assuming that people care not only about what others do but also on what others think, we study respect as a non-monetary source of motivation in a context where the length of the employment relationship is endogenous. In our three-stage gift-exchange experiment, the employer can express respect by giving the employee costly symbolic rewards after observing his level of effort. This experiment sheds light on the extent to which symbolic rewards are used, how they affect employees’ further effort, the duration of relationships, and the profits of employers. Furthermore, we study whether employers’ decisions to give symbolic rewards are driven by strategic considerations, by manipulating the bargaining power of employers and employees. We find that employers make use of symbolic rewards and chiefly to express their satisfaction with the employee. Indeed, symbolic rewards are more frequently used when there is excess supply of labor in the market while they are used in almost the same proportion when the market is balanced and when there is excess demand of labor. They are associated with higher profits and increased probability of continuing employment relationships. Overall, however, the opportunity of expressing respect does not improve efficiency compared with an environment in which it does not exist, possibly due to a crowding-out of extrinsic incentives by the availability of non-monetary incentives.

Testing for “contagion” of the subprime crisis on the Middle East and North African stock markets : A Markov Switching EGARCH approach

Wajih Khallouli, René Sandretto
In this paper, we investigate whether the recent financial turmoil which arose in the United States has contaminated the Middle East and North African countries (MENA). In contrast to Lagoard-Segot and Lucey (2009), we try to identify the existence of pure contagion (Masson, 1999) rather than shift-contagion (Rigobon, 2003). Then, we explicitly define financial “contagion” in accordance with Eichengreen et al. (1996) and we extend the Cerra and Saxena (2002) methodology by using a Markov-Switching EGARCH model introduced by Henry (2009) in order to identify contaminated MENA stock markets. Our results provide evidence of a persistence of recession characterised by low mean/high variance regimes which coincides with the third phases of the subprime crisis. In addition, there is evidence of mean and volatility contagion in MENA stock markets caused by the US stock market.

Logement social et accession à la propriété

Florence Goffette-Nagot, Modibo Sidibé
L’accession à la propriété nécessite une accumulation préalable de capital. On peut penser que le profil de consommation au cours du cycle de vie influence les capacités d’épargne du ménage et ainsi s’interroger sur le rôle des statuts résidentiels passés sur l’accession à la propriété. Or, les études s’intéressant à
l’impact des statuts résidentiels passés sur l’accession à la propriété sont rares. Dans le cas français, cette question est particulièrement fondée étant donné le poids important du logement social. L’objectif de cet article est d’analyser les effets d’un séjour dans le parc de logements Hlm sur la dynamique d’accession
à la propriété. Pour contrôler la sélection des ménages au sein du parc Hlm, nous proposons l’estimation d’un modèle en deux étapes, dans lequel nous calculons les probabilités prédites d’avoir un séjour en logement Hlm et intégrons ensuite ces probabilités dans un modèle d’âge d’accession à la propriété. La probabilité d’avoir eu un séjour en logement Hlm est instrumentée par une variable représentative de l’état du marché du logement au niveau de l’aire urbaine. Les estimations sont basées sur une base de données originale, constituée par l’empilement des trois dernières enquêtes Logement et la définition de quatre cohortes d’individus, qui nous permettent d’observer un échantillon représentatif des transitions sur le marché du logement de chacune des cohortes au cours des 24 dernières années. Les résultats de l’estimation du modèle de durée avec correction de l’endogénéité du séjour en Hlm mettent en évidence l’accélération de l’accession permise par l’occupation d’un logement Hlm. Ce résultat met en évidence l’existence d’une articulation entre la politique d’offre de logement social et la politique d’aide à l’accession à la propriété. A l’encontre des images négatives souvent associées au logement social, qui constituerait une trappe à pauvreté, cette analyse permet de montrer un réel effet favorable du logement Hlm sur les transitions résidentielles ultérieures. Ces résultats confortent ceux obtenus pas LeBlanc et al. (1999) et Laferrère et LeBlanc (2006) et les complètent en suggérant que le gain sur la dépense de logement permis par l’occupation d’un logement Hlm est, au moins pour partie, utilisé pour la constitution d’un apport personnel permettant l’accès à la propriété.

Poverty and firewood consumption : A case study of rural households in northern China

Sylvie Démurger, Martin Fournier
This paper discusses the determinants of firewood consumption in a poor township in rural northern China, with a special focus on the relationship between households’ economic wealth and firewood consumption. We find strong support for the poverty-environment hypothesis since household
economic wealth is a significant and negative determinant of firewood consumption. Firewood can therefore be considered as an inferior good for the whole population in the rural area under study, although further evidence shows that at the top of the wealth distribution, there might be a floor effect in the decreasing firewood consumption. Besides economic wealth, our analysis also shows that the own-price effect is important in explaining firewood consumption behavior, the price effect gaining importance with rising incomes. Finally, increasing education is also found to be a key factor in energy consumption behavior, especially when dealing with energy source switching behavior.

Threat and Punishment in Public Good Experiments

David Masclet, Charles Noussair, Marie-Claire Villeval
Experimental studies of social dilemmas have shown that while the existence of a sanctioning institution improves cooperation within groups, it also has a detrimental impact on group earnings in the short-run. Could the introduction of pre-play threats to punish have enough of a beneficial impact on cooperation, while not incurring the cost associated with actual punishment, so that they increase overall welfare ? We report an experiment in which players can issue non-binding threats to punish others based on their contribution levels to a public good. After observing others’ actual contributions, they choose their actual punishment level. We find that threats increase the level of contributions significantly. Efficiency is improved, but only in the long run. However, the possibility of sanctioning differences between threatened and actual punishment leads to lower threats, cooperation and welfare, restoring them to levels equal to or below the levels attained in the absence of threats.

Intermittent Reinforcement and the Persistence of Behavior : Experimental Evidence

Robin M. Hogarth, Marie-Claire Villeval
Whereas economists have made extensive studies of the impact of levels of
incentives on behavior, they have paid little attention to the effects of regularity and frequency of incentives. We contrasted three ways of rewarding participants in a real-effort experiment in which individuals had to decide when to exit the situation : a continuous reinforcement schedule (all periods paid) ; a fixed intermittent reinforcement schedule (one out of three periods paid) ; and a random intermittent reinforcement schedule (one out of three periods paid on a random basis). In all treatments, monetary rewards were withdrawn after the same unknown number of periods. Overall, intermittent reinforcement leads to more persistence and higher total effort, while participants in the continuous condition exit as soon as payment stops or decrease effort dramatically. Randomness increases the dispersion of effort, inducing both early exiting
and persistence in behavior ; overall, it reduces agents’ payoffs. Our interpretation is that, in the presence of regime shifts, both the frequency and the randomness of the reinforcement schedules influence adjustments that participants make across time to their reference points in earnings expectations. This could explain why agents persist in activities although they lose money, such as excess trading in stock markets.

Dynamic models of residential segregation : an analytical solution

Sebastian Grauwin, Florence Goffette‐Nagot, Pablo Jensen
We propose an analytical resolution of Schelling segregation model for a general class of utility functions. Using evolutionary game theory, we provide conditions under which a potential function, which characterizes the global configuration of the city and is maximized in the stationary state, exists. We use this potential
function to analyze the outcome of the model for three utility functions corresponding to different degrees of preference for mixed neighborhoods. Schelling original utility function is shown to drive segregation at the
expense of collective utility. If agents have a strict preference for mixed neighborhoods but still prefer being in the majority versus in the minority, the model converges to perfectly segregated configurations, which clearly diverge from the social optimum. Departing from earlier literature, these conclusions are based on analytical results. These results pave the way to the analysis of many structures of preferences, for instance those based on empirical findings concerning racial preferences. As a by-product, our analysis builds a bridge
between Schelling model and the Duncan and Duncan segregation index.

Competitive Preferences and Status as an Incentive : Experimental Evidence

Gary Charness, David Masclet, Marie Claire Villeval
In this paper, we investigate individuals’ investment in status in an environment where no monetary return can possibly be derived from reaching a better relative position. We use a real-effort experiment in which we permit individuals to learn and potentially improve their status (rank). We find that people express both intrinsic motivation and a taste for status. Indeed, people increase their effort when they are simply informed about their relative performance, and people pay both to sabotage others’ output and to artificially increase their own
relative performance. In addition, stronger group identity favors positive rivalry and discourages sabotage among peers.

The Consequences
 of
 Banking
 Crises 
on 
Public
 Debt

Davide Furceri, Aleksandra Zdzienicka
The aim of this paper is to assess the consequences of banking crises on public debt. Using an unbalanced panel of 154 countries from 1980 to 2006, the paper shows that banking crises produce a significant and long-lasting increase
in government debt. The effect is a function of the severity of the crisis. In particular, we find that for severe crises, comparable to the most recent one in terms of output losses, banking crises are followed by a medium-term increase
of about 37 percentage points in the government gross debt-to-GDP ratio. We also find that the debt ratio increased more in smaller countries, with worse initial fiscal positions and with a lower quality of institutions (in terms of
political stability and democracy). The increase in government debt is also a function of the size of the fiscal stimulus to counter the economic downturns and varies with the type of banking intervention policy, with liquidity
support to banks associated with a larger increase in public debt.

Banking Crises and Short and Medium Term Output Losses in Developing Countries : The Role of Structural and Policy Variables

Davide Furceri, Aleksandra Zdzienicka
The aim of this work is to assess the short and medium term impact of banking crises on developing economies. Using an unbalanced panel of 159 countries from 1970 to 2006, the paper shows that banking crises produce significant output losses, both in the short and in the medium term. The effect depends on structural and policy variables. Output losses are larger for relatively more wealthy economies, characterized by a higher level of financial deepening and larger current account imbalances. Flexible exchange rates, fiscal and monetary policy have been found to be efficient tools to attenuate the effect of the crises. Among banking intervention policies, liquidity support resulted to be the one associated with lower output losses.

Dépendance entre risques extrêmes : Application aux Hedge Funds

Ranoua Bouchouicha
Compte tenu de l’importance de l’étude de la dépendance extrême, nous avons essayé de déterminer l’approche qui semble être la meilleure pour l’étude des risques extrêmes. Pour atteindre ce but, nous avons mené une étude du coefficient de dépendance de queue pour les trois approches : paramétriques, semi-paramétriques et non paramétriques. Dans l’étude empirique, nous estimons le coefficient de dépendance de queue dans le cadre de ces
différentes méthodes, d’abord par une implémentation numérique, ensuite par l’étude dedépendance entre le Hedge Fund Credit Suisse / Tremont Market Neutral et le S & P500 afin d’évaluer le degré de dépendance entre ces deux actifs, qui sont connus pour être décorrélés. Il existe peu d’études qui ont travaillé sur la dépendance non linéaire entre les Hedge Funds et l’indice du marché. L’article de Denuit et Scaillet (2004) traite d’un cas général de la
détection de la dépendance du quadrant positif (PQD) entre les HFR et CSFB / Tremont Market Neutral et l’indice S & P 500 index. Le résultat de ce papier est pertinent car on trouve que le niveau de dépendance au niveau des pertes avec l’indice de marché est moins important que celui au niveau des gains, alors que les Hedge Funds l’indice du marché sont généralement considérés comme décorrélés.

Does Homeownership Harm Labour Market Performances ? A Survey

Nathalie Havet, Alexis Penot
While many countries have implemented various incentives to promote home-
ownership, this paper investigates the literature on the relationship between this
residential status and the labour market performances. Since the rather nega-
tive original contribution by Oswald (1996), the literature has been extending
the analyses to more precise measures of labor markets performances, to more
subtle descriptions of residential status and to more sophisticated econometric
techniques on individual data. Overall, the Oswald’s hypothesis finds little sup-
port.

Propriété immobilière et trajectoires salariales : Quelles leçons tirer de la comparaison France – Etats-Unis ?

Carole Brunet, Nathalie Havet, Jean-Yves Lesueur
L’étude empirique proposée dans cet article s’inscrit dans la lignée des travaux portant sur les effets des choix résidentiels sur la qualité de l’insertion professionnelle sur le marché du travail. Elle se concentre en particulier sur la population en emploi et cherche à connaître l’influence du statut résidentiel sur les salaires individuels, qui est a priori ambiguë. D’une part, la propriété immobilière peut, en réduisant la mobilité et la taille du bassin de nouveaux emplois envisageables, diminuer les opportunités d’accroître son salaire ; d’autre part, les propriétaires peuvent faire jouer des réseaux sociaux plus importants et faire valoir une plus grande stabilité professionnelle auprès de leurs employeurs, ce qui est bénéfique pour une promotion salariale interne éventuellement assortie du financement d’une formation interne.
Nous utilisons la partie française du Panel Européen des Ménages 1995-2001 et les données américaines du Panel Survey of Income Dynamics 1994-1999. Les résultats obtenus montrent que les propriétaires bénéficient, toutes choses étant égales par ailleurs, d’une prime salariale en France par rapport aux locataires, alors qu’aux Etats-Unis, les rémunérations des deux groupes sont en moyenne équivalentes. Ces résultats remettent en cause l’hypothèse d’Oswald selon laquelle la propriété immobilière serait néfaste aux performances sur le marché du travail.



Knowledge diffusion and innovation policies within the European regions : Challenges based on recent empirical evidence

Corinne Autant-Bernard, Muriel Fadairo, Nadine Massard
This article builds upon empirical results concerning localised knowledge spillovers to highlight some policyimplications within European regions. The analysis emphasises the role of regional innovation policies in supporting the institutions that generate knowledge and learning. However, the variety of regional features presented in the empirical literature suggests that the search for universal policy tools is unrealistic. From this perspective, we argue that original strategies must be generated to cope with the various dilemmas faced by regional innovation policies. Such specific strategies require accurate knowledge of local features. Improving data and indicators to diagnose and monitor regional innovation is therefore presented as a key issue for policy
makers.

La Restriction des émissions de CO2 pénalise-t-elle les exportations ? Un modèle de gravité avec données de panel et variables muettes régionales

Jérôme Trotignon
A partir d’un modèle de gravité en données de panel, nous estimons les effets sur les exportations du contrôle des émissions de CO2 d’un pays relativement à ses partenaires. Pour la première fois dans une étude sur la restriction environnementale, le modèle introduit des variables dummy correspondant aux flux commerciaux internes et externes aux groupes régionaux. Loin de pénaliser les exportations, la diminution des émissions de CO2 s’avère bénéfique aux performances extérieures des entreprises (1986-2003). Cet effet est renforcé
dans un contexte d’intégration régionale. Cela vient conforter l’hypothèse de Porter, selon laquelle la politique environnementale stimule l’innovation et in fine la productivité moyenne d’une économie. Les accords internationaux sur le climat apparaissent ainsi comme une opportunité pour réorienter favorablement les économies nationales vers les technologies et produits économes en énergie fossile.

Return migrants : The rise of new entrepreneurs in rural China

Sylvie Démurger, Hui Xu
This paper analyzes return migrants’ occupational choice upon their return to their home village, by using an original rural household survey conducted in Wuwei county (Anhui province, China) in 2008.
We apply two complementary approaches : a horizontal comparative analysis of occupational choice between non-migrants and return migrants, and a vertical investigation of the impact of migration experience on returnees only. Two main findings are drawn up from the estimation of probit models which account for potential selection bias and endogeneity. First, return migrants are more likely to be self-employed and to opt for higher ability jobs than non-migrants. Second, both return savings and the frequency of job changes during migration increase the likelihood for return migrants to become self-employed. These findings suggest that (a) working experience during migration enhances
individual’s human capital and entrepreneurial ability, and (b) repatriated migration experience is a key stimulating factor in promoting rural entrepreneur activity.

La 
propriété
 immobilière 
est‐elle
 un
 obstacle
 pour
 sortir
 du
 chômage
 ?

Carole 
Brunet, 
Nathalie
 Havet,
 Jean‐Yves
 Lesueur
Cet article propose de tester, sur données individuelles, l’hypothèse d’Oswald, selon laquelle le développement de la propriété immobilière observé dans la plupart des pays de l’OCDE s’accompagnerait d’une augmentation de la durée des épisodes de chômage.
La démarche retenue apporte une contribution à la littérature dans ce domaine via une étude économétrique comparée entre la France et les Etats-Unis qui permet d’opposer des fonctionnements et des interactions entre marchés du travail et du logement particulièrement différenciés. A partir de deux échantillons de chômeurs issus respectivement du Panel Européen des Ménages et du Panel Survey of Income Dynamics et couvrant la période 1994-2001, des modèles de hasards proportionnels mélangés tenant compte de la
simultanéité des comportements sur le marché du travail et celui du logement sont estimés.
Les principaux résultats indiquent que la propriété immobilière n’a pas d’impact statistiquement significatif sur les durées de chômage aux Etats-Unis, tandis que les propriétaires français au chômage retrouvent un emploi plus rapidement que leurs homologues locataires, résultats qui conduisent à moduler les conclusions issues de travaux antérieurs appliqués à ces deux pays.

Reining in Excessive Risk Taking by Executives : Experimental Evidence

Mathieu 
Lefebvre,
 Ferdinand
 Vieider
Compensation of executives by means of equity has long been seen as a means to tie executives’ income to company performance, and thus as a solution to the principal-agent dilemma created by the separation of ownership and management in publicly owned companies. The overwhelming part of such equity compensation is currently provided in the form of stock-options. Recent events have however revived suspicions that the latter may induce excessive risk taking by executives. In an experiment, we find that subjects acting as executives do indeed take risks that are excessive from the perspective of shareholders if compensated through options. Comparing compensation
mechanisms based on stock-options to long-term stock-ownership plans, we find that the latter significantly reduce the uptake of excessive risks by aligning the executives’ interests with those of shareholders. Introducing an institutionalized accountability mechanism consisting in the requirement for executives to justify their choices in front of a shareholder reunion also reduces
excessive risk taking, and appears to be even more effective than long-term stock-ownership plans. A combination of long-term stock-ownership plans and increased accountability thus seem a promising direction for reining in excessive risk taking by executives.

Productivity 
Changes
 and
 Intangible 
Assets : Evidence
 from 
French
 Plants

Corinne
 Autant‐Bernard,
 Jean‐Pascal
 Guironnet, 
Nadine
 Massard
This paper investigates the effect of inter-firm and intra-firm spillovers on the
productivity of firms, using French data. The Luenberger Productivity Indicator (LPI) is used to estimate the productivity and to break it down into several components (e.g. efficiency, biased technical progress, scale effects, etc.). Using this approach, negative productivity changes are found due to the unfavourable economic situation over 2000-2002. Intangible assets of productivity change are then investigated through a Maximum Likelihood Random Effect (MLRE) model. Spillover effects – influencing Total Factor Productivity (TFP) and its correspondent components, technological and efficiency changes – are found.

A model of influence with a continuum of actions

Michel 
Grabisch,
 Agnieszka 
Rusinowska
In the paper, we generalize a two-action (yes-no) model of influence to a framework in which every player has a continuum of actions and he has to choose one of them. We assume the set of actions to be an interval. Each player has an inclination to choose one of the actions. Due to influence among players, the final decision of a player, i.e., his choice of one action, may be different
from his original inclination. In particular, a coalition of players with the same inclination may influence another player with different inclination, and as a result of this influence, the decision of the player is closer to the inclination of the influencing coalition than his inclination was. We introduce and study a measure of such a positive influence of a coalition on a player. Several unanimous influence functions in this generalized framework are considered. Moreover, we investigate other tools for analyzing influence, like the concept of a follower of a given coalition, its particular case - a perfect follower, and the kernel of an influence function. We study properties of these concepts.
Also the set of fixed points under a given influence function is analyzed. Furthermore, we study linear influence functions. We also introduce a measure of a negative influence of a coalition on a player.

Fragmentation and immiserising specialisation : the case of the textile and clothing sector

Céline 
Gimet,
 Bernard
 Guilhon,
 Nathalie 
Roux
With production activity tending rapidly towards international fragmentation, this study examines the consequences for labour countries of the forms of specialisation brought about by fragmentation processes. It further addresses the risk that fragmented sectors may become excluded from greater developments within the manufacturing industry as a whole. An empirical
analysis using panel data reveals that, contrary to expectation, the textile and clothing sector in labour countries does not always reap the positive benefits of this form of international trade integration. Rather, we observe a phenomenon of immiserising specialisation, due to a drop in relative wages within this sector.

La formation continue, un moyen de réduire les inégalités salariales entre hommes et femmes ?

Nathalie Havet, Guy Lacroix
L’objet de cet article est d’évaluer le rendement salarial de la participation à une formation continue en entreprise (formelle et informelle), en centrant l’analyse sur les différences entre sexes. Pour ce faire, les données françaises de l’enquête Formation continue 2000 sont mobilisées. On estime un modèle d’équations simultanées afin de tenir compte à la fois du phénomène de sélection endogène des pratiques de formation et des effets corrélés
de l’hétérogénéité individuelle inobservable entre les différents types de formations et les salaires. Il ressort qu’en France, le rendement d’une formation formelle est plus élevé pour les femmes que pour leurs homologues masculins et que le rendement d’une formation informelle est équivalent pour les deux sexes.

Are compact cities environmentally friendly ?

Carl Gaigné, Stéphane Riou, Jacques-François Thisse
There is a large consensus among international institutions and national govern-
ments to favor urban-containment policies - the compact city - as a way to reduce the ecological footprint of cities. This approach overlooks the following basic trade-off : the concentration of activities decreases the ecological footprint stemming from commodity shipping between cities, but it increases emissions of greenhouse gas by inducing longer worktrips. What matters for the ecological footprint of cities is the mix between urban density and the global pattern of activities. As expected, when both the intercity and intraurban distributions of activities are given, a higher urban density makes cities more environmentally friendly and raises global welfare. However, once we account for the fact that cities may be either monocentric or polycentric as well as for the relocation of activities between cities, the relationship between density and the ecological footprints appears to be much more involved. Indeed, because changes in urban density affect land rents and wages, firms are incited to relocate, thus leading to new commuting patterns. We show policies that favor the decentralization of jobs in big cities may reduce global pollution and improve global welfare.

2009

The Effect of Nominal Exchange Rate Volatility on Real Macroeconomic Performance in the CEE Countries

Olga Arratibel, Davide Furceri, Reiner Martin, Aleksandra Zdzienicka
This paper analyzes the relation between nominal exchange rate volatility and several macroeconomic variables, namely real per output growth, excess credit, foreign direct investment (FDI) and the current account balance, in the Central and Eastern European EU Member States. Using panel estimations for the period between 1995 and 2008, we find that lower exchange rate volatility is associated with higher growth, higher stocks of FDI, higher current account deficits, and higher excess credit. The results are economically and statistically significant, and robust.

Are the New Trading Blocs Building or Stumbling Blocks ? A Gravity Model Using Panel Data

Jérôme Trotignon
We will be asking ourselves if the trading blocs created or renewed since the end of the 1980s favor the multilateralization of trade, and so constitute building or stumbling blocks. In a gravity model using panel data, we estimate a set of three regional dummies representative of intra-bloc trade, extra-bloc exports and extra-bloc imports. Taking the resulting three coefficients as a starting point, we propose an original typology of trade creations / diversions
and of trading blocs. In applying it to our results, all the groups chosen as well as the Economic and Monetary Union, are shown to be building blocks. No trade diversion is noted, with the exception of an export diversion brought about by North American Free Trade Agreement.

Prix fonciers et demande de sol à usage résidentiel en France - 1975-2000

Florence Goffette-Nagot
Ce travail documente l’augmentation des prix des terrains à bâtir en France sur une période de vingt-cinq ans. Nous estimons sur un échantillon national une fonction de prix foncier tenant compte de la croissance urbaine. Nous considérons une relation concave entre le prix des terrains et leur superficie, tout en traitant l’endogénéité de cette dernière. Un biais de sélection tenant à la nature de l’échantillon observé est corrigé. Les résultats permettent de distinguer, dans l’évolution des prix fonciers, un effet temporel pur et une
modification de la localisation des constructions neuves et des caractéristiques
des localisations. L’élasticité-prix et l’élasticité-revenu de la demande de sol
des ménages est également estimée.

Cooperation and Competition in Intergenerational Experiments in the Field and the Laboratory

Gary Charness, Marie Claire Villeval
There is economic pressure towards the postponement of the retirement age, but employers are still reluctant to employ older workers. We investigate the comparative behavior of juniors and seniors in experiments conducted both onsite with the employees of two large firms and in a conventional laboratory environment with students and retirees. We show that seniors are no more risk averse than juniors and are typically more cooperative ; both juniors and
working seniors respond strongly to competition. The implication is that it may be beneficial to define additional incentives near the end of the career to motivate and retain older workers.

Wage bargaining with non-stationary preferences under strike decision

Ahmet Ozkardas, Agnieszka Rusinowska
In this paper, we present a non-cooperative wage bargaining model in which preferences of both parties, a union and a firm, are expressed by the sequences of discount rates varying in time. For such a wage bargaining with non-stationary preferences, we determine subgame perfect
equilibria between the union and the firm for the case when the union is supposed to go on strike in each period in which there is a disagreement. A certain generalization of the original Rubinstein bargaining model is applied to determine these equilibria.

A spatial analysis of residential land prices in Belgium : accessibility, linguistic border and environmental amenities

Florence Goffette-Nagot, Isabelle Reginster, Isabelle Thomas
This paper explores the spatial variation of land prices in Belgium. The originality of the methodology is threefold : (1) to work at the spatial extent of an entire country, (2) to compute several accessibility measures to all jobs and several representations of the environmental amenities and, more importantly, (3) to test the hypothesis that jobs influence land prices only in the same linguistic region. Spatial autocorrelation is accounted for by estimating spatial
models. The results show that the linguistic border acts as a strong barrier in the spatial pattern of land prices and that environmental variables have no significant effect at this scale
of spatial analysis.

The spread of international financial shocks to Asean countries

Céline Gimet
This article focuses on the reaction of Asean economies to international financial
shocks. The crises in emerging markets at the end of the last century underlined the vulnerability of emerging Asean economies to international financial fluctuations and a lack of sustainability in their exchange rate regime. A Structural VAR model is used to analyze the efficiency of the measures adopted by these countries, after this crisis episode, to protect their economies against speculative attacks. The results reveal that the impact of the current subprime crisis on emerging Asean countries is less significant than that observed in industrialized ones.

The Welfare Gains of Trade Integration in the European Monetary Union

Stéphane Auray, Aurélien Eyquem, Jean-Christophe Poutineau
This paper evaluates the welfare gains arising from a deeper trade integration in the European Monetary Union. To do this, the European Monetary Union is represented in a realistic way by an intertemporal general equilibrium model with incomplete Önancial markets, sticky prices and home bias both in private consumption and production. The model is estimated and globally not rejected by the data. Two main results emerge : (i) an increase in vertical
(intermediate goods) trade implies welfare gains while (ii) an increase in horizontal trade implies welfare losses.

Incentive Effects on Risk Attitude in Small Probability Prospects

Mathieu Lefebvre, Ferdinand Vieider, Marie-Claire Villeval
Most studies on the role of incentives on risk attitude report data obtained from
within-subject experimental investigations. This may however raise an issue of sequentiality of effects as later choices may be influenced by earlier ones. This paper reports instead between-subject results on the effect of monetary stakes on risk attitudes for small probability prospects in a laboratory experiment. Under low stakes, we find the typical risk seeking behavior for small probabilities predicted by the prospect theory. But under high stakes, we
provide some evidence that risk seeking behavior is dramatically reduced. This could suggest that utility is not consistently concave over the outcome space, but rather contains a convex section for very small amounts.

The Ratio Bias Phenomenon : Fact or Artifact ?

Mathieu Lefebvre, Ferdinand Vieider, Marie-Claire Villeval
The ratio bias––according to which individuals prefer to bet on probabilities expressed as a ratio of large numbers to normatively equivalent or superior probabilities expressed as a ratio of small numbers––has recently gained momentum, with researchers especially in health economics emphasizing the policy importance of the phenomenon. Although the bias has been replicated
several times, some doubts remain about its economic significance. Our two experiments show that the bias disappears once order effects are excluded, and once salient and dominant incentives are provided. This holds true for both choice and valuation tasks. Also, adding context to the decision problem does not change this outcome. No ratio bias could be found in between-subject tests either, which leads us to the conclusion that the policy relevance of the phenomenon is doubtful at best.

Neighborhood effects on unemployment ? A test à la Altonji

Claire Dujardin, Florence Goffette-Nagot
The aim of this paper is to test for the influence of neighborhood deprivation on
individual unemployment probability in the case of Lyon (France). We estimate a
bivariate probit model of unemployment and location in a deprived neighborhood. Our identification strategy is twofold. First, we instrument neighborhood type by the gender composition of household’s children and the spouse’s workplace. Second, we use the methodology proposed by Altonji et al. (2005), that in our case consists in making hypotheses as to the correlation between the unobservables that determine unemployment and the unobservables that influence the selection into neighborhood types. Our results show that the effect of neighborhood deprivation is not significantly different from zero in the bivariate probit with exclusion restrictions. We also show that a correlation of the unobservables as low as ten percent of the correlation of observables is sufficient to explain the positive neighborhood effect that is observed when endogeneity is not accounted for.

Rural households decisions towards income diversification : Evidence from a township in northern China

Sylvie Démurger, Martin Fournier, Weiyong Yang
Economic reforms in rural China have brought opportunities to diversify both within-farm activities and off-farm activities. Participation in these activities plays an important role in increasing rural households’ income. This paper analyzes the factors that drive rural households and individuals in their income-source diversification choices for ten villages in Northern China. At the household level, we distinguish three types of diversification as opposed to grain production only : within farm (non- grain production) activities, local off-farm activities, and migration. At the individual level, we analyze the determinants of participation in three different types of jobs as compared to agricultural work : local off-farm employment, local self-employment and migration. At the household level, we find that land and labor availability stimulates on-farm diversification. Local off-farm activities are mostly driven by household wealth and credit constraints, while migration decisions strongly depend on the household age and composition. At the individual level, we find a clear gender and age bias in access to off-farm activities that are mostly undertaken by male and by young people. More surprisingly, education is found to play a role for accessing local wage employment but not in migration decision. As at the household level, the household assets position is found to strongly affect
participation in any off-farm activity.

Interpersonal Comparisons of Utility in Bargaining : Evidence from a Transcontinental Ultimatum Game

Romina Boarini, Jean-François Laslier, Stéphane Robin
This paper presents the experimental results of a “Transcontinental Ultimatum Game” implemented between India and France. The bargaining took the form of standard ultimatum games, but in one treatment Indian subjects made offers to French subjects and, in another treatment, French subjects made offers to Indian subjects. We observed that French→Indian bargaining mostly ended up with unequal splits of money in favour of French, while nearly equal splits were the most frequent outcome in Indian→French interactions.
The experimental results are organized through a standard social reference model, modified for taking into account the different marginal value of money for bargainers. In our model bargaining is driven by relative standings comparisons between players, occurring in terms of real earnings (that is monetary earnings corrected for a purchasing power factor) obtained in the game. The norm of equity behind the equalization of real earnings is called
local equity norm, and contrasted to a global equity norm which would encompass the wealth of players beyond the game. According to what we observed, no beyond-game concern seems to be relevantly endorsed by subjects.

Framing effects of risk communication in health-related decision making. Learning from a discrete choice experiment

Florence Nguyen, Marie-Odile Carrère, Nora Moumjid
Background How to communicate uncertainty is a major concern in medicine and in health economics. We aimed at studying the framing effects of risk communication on stated preferences in a discrete choice experiment (DCE) performed to elicit women’s preferences for Hormone Replacement Therapy. Methods Two versions of the questionnaire were randomly administered to
respondents. Multiple risks were expressed as natural frequencies using either a constant reference class (Design 1) or variable reference classes (Design 2). We first tested whether Design 1 would impose a lower cognitive burden than Design 2. We then examined whether the two designs resulted in different utility model estimates. Results Design 1 improved consistency (monotonicity and stability). However, rates of dominance or intransitive responses did not differ across designs. Design 1 decreased women’s sensitivity to the risk of fractures and increased their sensitivity to the risk of breast cancer as compared to all other attributes. Discussion Framing effects of risk communication
on stated preferences may be a major problem in the design of DCEs. More research is needed to determine whether our findings are replicable and to further investigate the normative question of how to improve risk communication in health-related decision-making.

The Real Effect of Financial Crises in the European Transition Economies

Davide Furceri, Aleksandra Zdzienicka-Durand
The aim of this work is to assess the impact of financial crises on output for 11 European transition economies (CEECs). The results suggest that financial crises have a significant and permanent effect, lowering long-term output by about 17 percent. The effect is more important in smaller countries, with relative higher dependence on external financing, and in which the banking sector noticed more important financial disequilibria. We also found that fiscal policy measures have been the most efficient tools in dealing with the crises, while the role of monetary policy instruments has been rather blinded. Exchange rate resulted to be more a propagator than a crises absorber, while the IMF credit has been found to have positive (but not significant) impact on growth performance. Finally, the effect for the CEECs is much bigger than in the EU advanced economies, for which we found that financial crises lowers long-term output only by 2 percent.

Inequity and Risk Aversion in Sequential Public Good Games

Sabrina Teyssier

This paper analyzes which type of intrinsic preferences drive an agent’s behavior in a sequential public good game depending on whether the agent is first or second mover. Theoretical predictions are based on heterogeneity of individuals in terms of social and risk preferences. We modelize preferences according to the inequity aversion model of Fehr and Schmidt (1999) and to the assumption of constant relative risk aversion. Risk aversion is significantly and negatively correlated with the contribution decision of first movers. Second movers with sufficiently high advantageous inequity aversion free-ride less and reciprocate more than others. Both results are predicted by our model. Nevertheless, no effect of disadvantageous inequity aversion of first movers is found in the data while theory predicted it. Our results underline the importance of taking into account the order of agents’ play to correctly understand which type of preferences influences cooperation in voluntary contribution mechanisms. They
suggest that individuals’ behavior can be consistent between different experimental games.

The Macroeconomic Performance of the Inflation Targeting Policy : An Approach Based on the Evolutionary Co-spectral Analysis

Zied Ftiti

This paper proposes a new methodology to check the economic performance of a monetary policy and in particular the inflation targeting policy (ITP). The main idea of this work is to consider the ITP as economically efficient when it generates a stable monetary environment. The latter is considered as stable when a long-run equilibrium exists to which the paths of economic variables (inflation rate, interest rate and GDP growth) converge. The convergence of the variables’ paths implies that these variables are more predictable and implies a lower degree of uncertainty in the economic environment. To measure the degree of convergence between economic variables, we propose, in this paper, a dynamic time-varying variable presented in the frequency approach named cohesion. This variable is estimated from the evolutionary co-spectral theory as defined by Priestley and Tong (1973) and Priestley (1988-1996). We apply this theory to the measure of cohesion presented by Croux et al (2001) to obtain a dynamic time-varying measure. In the last step of the study, we apply the Bai and Perron test (1998-2003b) to determine the change in the cohesion path. The results show that the implementation of the ITP generates a high degree of
convergence between economic series that implies less uncertainty into the monetary environment. We conclude that the inflation targeting generates a stable monetary environment. This result allows us to conclude that the ITP is relevant in the case of industrialized countries.

Vulnerabilities in Central and Eastern European countries : Dynamics of asymmetric shocks

Aleksandra Zdzienicka
In this work, we use the VAR and space-state methodology to analyze how the recent developments in 20 European countries have modified the dynamics of structural shocks. Our results confirm a visible progress in (predominated output fluctuations) supply shocks convergence between the CEECs and the euro zone, but also corroborate a positive initial impact of EMU creation and EU
enlargement supply shocks correlation. In particular, we find that Croatia, Poland, Slovakia and Slovenia are good candidates to the euro adoption under condition of greater fiscal policy alignment.

Are Fast Court Proceedings Good or Bad ? : Evidence from Japanese Household Panel Data

Charles Yuji Horioka, Shizuka Sekita
We analyze the effect of the degree of judicial enforcement on the probability of credit constraints, the amount of loan and the probability of default. Contrary to the traditional view on judicial efficiency of credit market, our estimation results show that better judicial enforcement increases the probability of being rationed and decreases credit granted by banks, consistent with laziness effects. In order to confirm the laziness effect more directly, we analyzed the effect of the degree of judicial enforcement on the probability of default and found that better judicial enforcement increases the probability of default, as expected.

Macroeconomic Volatility and Exchange Rate Pass-through under Internationalized Production

Aurélien Eyquem, Güneş Kamber
This paper shows that internationalized production, modelled as trade in inter-
mediate goods, challenges the standard result according to which exchange rate
volatility insulates small open economies from external shocks. Movements of
relative prices aect the economy through an additional channel, denoted as the
cost channel. We show that this channel also acts as an automatic stabilizer and
that macroeconomic volatility is dramatically reduced when trade in intermedi-
ate goods is taken into account. Finally, trade in intermediate goods aects the
exchange rate pass-through to consumption prices and may contribute explain-
ing the puzzle described by McCallum & Nelson (2000).

Dynamic models of residential segregation : Brief review, analytical resolution and study of the introduction of coordination

Sébastian Grauwin, Florence Goffette-Nagot, Pablo Jensen
In his 1971’s Dynamic Models of Segregation paper, the economist Thomas C. Schelling showed that a small preference for one’s neighbors to be of the same color could lead to total segregation, even if total segregation does not correspond to individual preferences and to a residential configuration maximizing the collective utility.
The present work is aimed at deepening the understanding of the properties of dynamic models of segregation based on Schelling’s hypotheses. Its main contributions are (i) to offer a comprehensive and up-to-date review of this family of models ; (ii) to provide an analytical solution to the most general form of this model under rather general assumptions ; to the best of our knowledge, such a solution did not exist so far ; (iii) to analyse the effect of two
devices aimed at decreasing segregation in such a model.
Chapter one summarizes the ingredients of Schelling’s models. We show how the choices of the agent’s utility function, of the neighborhood description and of the dynamical rule can impact the outcome of a model. Based on the observation of simulations’ results, we find that the neighborhood description does not have a qualitative impact. As regards the dynamical rules, we show that the Logit Behavioral rule introduced in this literature by Young (1998) ;
Zhang (2004b) presents several advantages relatively to the Best Response rule.
Chapter two presents a general analytical solution to the model. To that aim, Schelling’s model is recasted within the framework of evolutionary game theory, as previously done by Young (1998) ; Zhang (2004b). This allows to define sufficient assumptions regarding agents’ utility functions that permit predicting the final state of the system starting from any configuration. This analytical resolution is then used to consider the outcomes of Schelling’s utility function and of other utility functions previously used in this context.
Chapter three examines the effects of introducing coordination in the moving decisions. This coordination is achieved through two different ways. We first impose different levels of taxes proportional to the externality generated by each move of the agents. It is shown that even a low level of tax is sufficient under certain circumstances to significantly reduce segregation. We then investigate the effect of the introduction of a local coordination by vote
of co-proprietors, who are defined as the closest neighbors of each agent. It is shown that even a small amount of coordination can break segregation.

A Relation-algebraic Approach to Simple Games

Rudolf Berghammer, Agnieszka Rusinowska, and Harrie de Swart
Simple games are a powerful tool to analyze decision-making and coalition formation in social and political life. In this paper, we present relation-algebraic models of simple games and develop relational algorithms for solving some basic problems of them. In particular, we test certain fundamental properties
of simple games (being monotone, proper, respectively strong) and compute specific players (dummies, dictators, vetoers, null players) and coalitions (minimal winning coalitions and vulnerable winning coalitions).
We also apply relation-algebra to determine central and dominant players, swingers and power indices (the Banzhaf, Holler-Packel and Deegan-Packel indices). This leads to relation-algebraic specifications, which can be executed with the help of the BDD-based tool RelView after a simple translation into the tool’s programming language. In order to demonstrate the visualization facilities of RelView we consider an example of the Catalonian Parliament after the 2003 election.

Vulnerabilities in Central and Eastern Europe : Credit Growth

Aleksandra Zdzienicka
In this work, we try to analyze the recent credit development in 11 Central and
Eastern European countries and estimate the credit-to-GDP ratio equilibrium
level using filtering methods and dynamic panel estimations. Our estimation
findings corroborate previous fears about the rapid credit growth in the CEECs.
Indeed, in many cases the credit expansion exceeds the level justified by their
fundamentals or financial development.
Under normal conditions, this rapid growth and even ’’overshooting’’ of banking
credit could be considered as an adjustment to its long-term equilibrium level.
However, in the actual crisis situation, this excessive credit growth can reinforce
other existing disequilibria and lead to an increase in the financial vulnerability
of these countries.

Stabilité dans l’emploi et statut résidentiel

Carole Brunet
Employment stability and residential status : This study uses French data of The European Community Household Panel (1994-2001) to evaluate the influence of homeownership on individuals’ employment stability and on the types of associated exits if the job ends. Following a recent literature concerned with the effects of residential status on individual labour market outcomes, we examine whether homeowners are characterized by a higher risk of unemployment than tenants. At the same time, we also wonder about the effects of the residential status on the level of employee mobility, in the sense of job to job transitions. After a review of the literature,
a general presentation of the data allows a first insight into the links between residential status, labour mobility and residential mobility. An econometric modeling of employment durations is then proposed and applied to a sample of job spells from the Panel Européen des Ménages . Until now these questions have been ignored in French studies. A positive impact of owner’s status on employment duration is found, in particular when housing related financial constraints weigh on individuals, or when a change of employment implies a residential move. On the other hand, ow-
ner’s status exercises a significant impact on the reduction of the unemployment risk, regardless of the type of employment contract.

Market Share, R&D Cooperation, and EU Competition Policy

Richard Ruble, Bruno Versaevel
Current EU policy exempts horizontal R&D agreements from antitrust con-
cerns when the combined market shares of participants are low enough. This paper argues that existing theory does not support limiting the exemption to low market shares. This is done by introducing a set of non-innovating outside firms to the standard framework to assess what link might exist between the market share of innovating firms and the product market benefits of cooperation. With R&D output choices, the market share criterion, while it rules out the most socially harmful R&D cooperation agreements, also hinders the most beneficial ones. With R&D input choices, cooperation may actually be desirable in concentrated industries, and harmful in more competitive ones. If R&D cooperation does have anti-competitive effects in product markets, it seems that these are therefore best addressed by other tools than market share criteria.

Optimal Collusion with Limited Severity Constraint

Etienne Billette de Villemeur, Laurent Flochel, Bruno Versaevel
Collusion sustainability depends on firms’ aptitude to impose sufficiently severe punishments in case of deviation from the collusive rule. We characterize the ability of oligopolistic firms to implement a collusive strategy when their ability to punish deviations over one or several periods
is limited by a severity constraint. It captures all situations in which either structural conditions (the form of payoff functions), institutional circumstances (a regulation), or financial considerations (profitability requirements) set a lower bound to firms’ losses. The model specifications
encompass the structural assumptions (A1-A3) in Abreu (1986) [Journal of Economic Theory, 39, 191-225]. The optimal punishment scheme is characterized, and the expression of the lowest discount factor for which collusion can be sustained is computed, that both depend on the status
of the severity constraint. This extends received results from the literature to a large class of models that include a severity constraint, and uncovers the role of structural parameters that facilitate collusion by relaxing the constraint.

An Agent-Based Simulation of Rental Housing Markets

John Mc Breen, Florence Goffette-Nagot, Pablo Jensen
We simulate a closed rental housing market with search and matching frictions, in which both landlord and tenant agents are imperfectly
informed. Homogeneous landlords set rents to maximise revenue, using
information on the market to estimate the relationship between posted
rent and time-on-the-market (TOM). Tenants, heterogeneous in income,
engage in undirected search accepting residences based on their idiosyncratic tastes for housing and a disagreement point derived from information on the distribution of offers. The steady state to which the simulation evolves shows price dispersion, nonzero search times and vacancies.
The main results concern the effects of increasing information on either
side of the market. When tenants see a greater percentage of the distri-
bution of offers, tenants learn to refuse high rents and so the population
rises and tenants’ utilities rise as does overall welfare. Conversely, when landlords have less information, their utility can rise as over estimations in best posting rent move the market to higher rents.

Financial Vulnerability in the Central and Eastern European Countries

Irène Andreou, Aleksandra Zdzienicka
In this work we use a panel probit model to analyze the sources of financial vulnerability in four Central and Eastern European countries. The incontestable advantages of applying this method, associated with some elements of the non-parametric approach applied during the initial selection of the used indicators, allow us to accomplish, rather well, this objective.
Indeed, the model performs considerably well in the sample and the whole approach can provide useful and supportive instruments for the study of financial vulnerabilities in transition economies.

Cumulative Leadership and Entry Dynamics

Bruno Versaevel
This paper investigates the combined impact of a first-mover advantage and of firms’ limited mobility on the equilibrium outcomes of a continuous-time model adapted from by Boyer, Lasserre, and Moreaux (2007). Two firms face market development uncertainty and may enter
by investing in lumpy capacity units. With perfect mobility, when the first entrant plays as a Stackelberg leader a Markov perfect preemption equilibrium obtains in which the leader invests earlier, and the follower later, than in the Cournot benchmark scenario. There is rent equalization, and the two firms’ equilibrium value is lower. This result is not robust to the introduction of firm-specific limited mobility constraints. If one firm is sufficiently less able than its rival to mobilize resources at early stages of the market development process, there is less rent dissipation, and no equalization, in a constrained preemption equilibrium. The first-mover advantage on the product market then results in more value for the less constrained firm, and in less value for the follower than when they play `a la Cournot with perfect mobility. The leading firm maximizes value by entering immediately before its constrained rival, though later than made possible by its superior mobility. Greater uncertainty reduces the value differential to the benefit of the follower. It also increases the distance between the firms’ respective investment triggers. The specifications and results are discussed in light of recent developments in the market for music
downloads.

A game theoretic model for generation capacity adequacy in electricity markets : A comparison between investment incentive mechanisms

Mohamed Haikel Khalfallah
In this paper we study the problem of long-term capacity adequacy in electricity markets. We implement a dynamic model in which operators compete for investment and electricity production under imperfect Cournot competition. The main aim of this work is to compare three investment incentive mechanisms : reliability options, forward capacity market - which are both market-based - and capacity payments. Apart from the oligopoly case, we also analyze collusion and monopoly cases. Stochastic dynamic programming is used to deal with the stochastic environment of the market (future demand) and mixed complementarity
problem formulation is employed to find a solution to this game. The main finding of this study is that market-based mechanisms would be the most cost-efficient mechanism for assuring long-term system adequacy and encouraging earlier and adequate new investments in
the system. Moreover, generators would exert market power when introducing capacity payments. Finally, compared with a Cournot oligopoly, collusion and monopolistic situations lead to more installed capacities with market-based mechanisms and increase end-users’
payments.

François Perroux, a precursor of the current analyses of power

René Sandretto
Despite its important contributions to economic thought, namely in the field of spatial economics and economics of development, François Perroux, one of the most important French economists of the 20st century, remains today poorly appreciated and frequently unrecognized.
This paper tends to show how unfair is this deficit of recognition. We underline Perroux’s illuminating views on asymmetry, domination and power which can be considered as a prefiguration and – to some extent – as a generalization of works made in this field half a century later, for example the American realist and neo-realist approaches of power (namely the concepts of hard and soft power) or by Susan Strange (with her concept of structural power).

The effect of health care expenditures on survival in locally advanced and metastatic Non Small Cell Lung Cancer

Lionel Perrier, Magali Morelle, Nathalie Havet, Anthony Montella, Bertrand Favier, David Pérol, Frédéric Gomez, Marie-Odile Carrère, Paul Rebattu
Context : The significant survival benefit of chemotherapy over best supportive care for locally advanced and metastatic NSCLC has been amply demonstrated in the literature. However, there is no clear evidence of the impact of the type of chemotherapy or of a superiority of combination chemotherapy over single-agent chemotherapy.
Objective : The present study empirically examines, in real-life practise and using multiple proxies, the impact of health care expenditures on overall survival in locally advanced and metastatic NSCLC in order to guide medical decision-making.
Methods : Disease characteristics, the resources used, the costs of treatment and survival data were retrospectively collected from the records of 175 patients treated between 2000 and 2004 at Léon Bérard Regional Cancer Center (Lyon, France). Survival data were modelled using multivariate Cox models and controlled for endogeneity with the instrumental variable method.
Results : The median survival for the whole cohort was 289 days. The average total cost of treatment reached €35,160. Survival was significantly shorter for patients with stage IV disease, poor performance status, and past or concomitant cardiovascular disease and/or diabetes, for current smokers, and for patients with adenocarcinoma compared to large cell carcinoma. Survival duration was not significantly associated with the total cost of treatment per day of hospitalisation, the number of chemotherapy drugs administered, nor inpatient length of stay.
Conclusion : Higher care expenditures do not appear to improve survival for patients with locally advanced or metastatic NSCLC. Hence, maintaining patient quality of life and tailoring therapy to stage, histology and comorbidities appears to be the less bad choice.

Applying Relation Algebra and RelView to Measures in a Social Network

Rudolf Berghammer, Agnieszka Rusinowska, Harrie de Swart Working Paper du GATE 2009 Vol. 02

Measuring Power and Satisfaction in Societies with Opinion Leaders : Properties of the Qualified Majority Case

René van der Brink, Agnieszka Rusinowska, Frank Steffen Working Paper du GATE 2009 Vol. 01

2008

Education and Early Career Outcomes of Second-Generation Immigrants in France

Christian Belzil, François Poinas Working Paper du GATE 2008 Vol. 36

L’hostilité aux OGM survit-elle à des produits attractifs ?

Elsa Kassardjian , Stéphane Robin , Bernard Ruffieux Working Paper du GATE 2008 Vol. 35

On the Tacit Collusion Equilibria of an Investment Timing Game

Richard Ruble, Bruno Versaevel Working Paper du GATE 2008 Vol. 34

Does public housing occupancy increase unemployment ?

Claire Dujardin, Florence Goffette-Nagot Working Paper du GATE 2008 Vol. 33

The inflation Targeting effect on the inflation series : A New Analysis Approach of evolutionary spectral analysis

Essahbi Essaadi, Zied Ftiti Working Paper du GATE 2008 Vol. 32

Influence functions, followers and command games

Michel Grabisch, Agnieszka Rusinowska Working Paper du GATE 2008 Vol. 31

The transition period before the inflation targeting policy

Essahbi Essaadi, Zied Ftiti Working Paper du GATE 2008 Vol. 30

Tax Reform in Two-Sector General Equilibrium

Olivier Cardi, Romain Restout Working Paper du GATE 2008 Vol. 29

Competition and the Ratchet Effect

Gary Charness, Peter Kuhn, Marie Claire Villeval Working Paper du GATE 2008 Vol. 28

A Measure of Variability in Comovement for Economic Variables : a Time-Varying Coherence Function Approach

Essahbi Essaadi , Mohamed Boutahar Working Paper du GATE 2008 Vol. 27

Thick breaks and trend stationarity : the case of euro-dollar exchange rate

Jean-François Goux Working Paper du GATE 2008 Vol. 26

Durée de chômage et hétérogénéité des issues : le rôle des préférences temporelles

Mohammed Ali Ben Halima, Bassem Ben Halima Working Paper du GATE 2008 Vol. 25

Préférences temporelles et recherche d’emploi « Applications économétriques sur le panel Européen des Ménages »

Mohammed Ali Ben Halima, Bassem Ben Halima Working Paper du GATE 2008 Vol. 24

Training Without Certification :An Experimental Study

Nadège Marchand, Claude Montmarquette Working Paper du GATE 2008 Vol. 23

Short-Term cost impact of compliance with clinical practice guidelines for initial sarcoma treatment

Lionel Perrier, Nicola Cautela, Magali Morelle, Nathalie Havet, Françoise Ducimetière, Antoine Lurkin, Jean-Yves Blay, Pierre Biron, Dominique Ranchère-Vince, Anne-Valérie Decouvelaere, Philippe Thiesse, Christophe Bergeron, François Gilly, Guy de Laroche, Dominic Cellier, Mathieu Laramas, Thierry Philip, Isabelle Ray-Coquard Working Paper du GATE 2008 Vol. 22

Experimental Evidence on Inequity Aversion and Self-Selection between Incentive Contracts

Sabrina Teyssier Working Paper du GATE 2008 Vol. 21

Analyzing the determinants of willingness-to-pay values for testing the validity of the contingent valuation method. Application to home care compared to hospital care

Raphaël REMONNAY, Nathalie HAVET, Magali MORELLE, Marie-Odile CARRERE Working Paper du GATE 2008 Vol. 20

Le choix d’un régime de change dans les pays émergents et en développement peut-il être optimal en dehors des solutions bi-polaires ?

Jean-Pierre ALLEGRET, Mohamed AYADI, Leila HAOUAOUI KHOUNI Working Paper du GATE 2008 Vol. 19

- Les Modes de Rémunération comme Mécanismes Sélectifs de la Main d’Œuvre : Fondements Théoriques et Estimations Empiriques

Sabrina TEYSSIER Working Paper du GATE 2008 Vol. 18

- Foreign Direct Investment, Macroeconomic Instability And Economic Growth in MENA Countries

Patrick (Monnet Benoît) GBAKOU , Mustapha SADNI-JALLAB , René SANDRETTO Working Paper du GATE 2008 Vol. 17

- La contagion liée au changement des anticipations : évidence de la crise coréenne

Mohamed AYADI , Wajih KHALLOULI , René SANDRETTO Working Paper du GATE 2008 Vol. 16

- External referencing and pharmaceutical price negotiation

Begonia GARCIA MARINOSO , Izabela JELOVAC , Pau OLIVELLA Working Paper du GATE 2008 Vol. 15

- Mergers, cartels and leniency programs : the role of production capacities

Emilie DARGAUD Working Paper du GATE 2008 Vol. 14

- How should donors give foreign aid ? Project aid versus budget support

Izabela JELOVAC , Frieda VANDENINDEN Working Paper du GATE 2008 Vol. 13

- Feedback and Incentives : Experimental Evidence

Tor ERIKSSON , Anders POULSEN , Marie Claire VILLEVAL Working Paper du GATE 2008 Vol. 12

- Long Run Determinants of Real Exchange Rates in Latin America

Jorge CARRERA , Romain RESTOUT Working Paper du GATE 2008 Vol. 11

- Compétition pour les paiements : une titanomachie revisitée par la modélisation multi-agents

Sandra DEUNGOUE Working Paper du GATE 2008 Vol. 10

- Does a Monetary Union protect again foreign shocks ? An assessment of Latin American integration using a Bayesian VAR

Jean-Pierre ALLEGRET , Alain SAND Working Paper du GATE 2008 Vol. 09

- Migrants as second-class workers in urban China ? A decomposition analysis

Sylvie DEMURGER , Marc GURGAND , Li SHI , Yue XIMING Working Paper du GATE 2008 Vol. 08

- Propriété immobilière et déqualification dans l’emploi

Carole BRUNET , Nathalie HAVET Working Paper du GATE 2008 Vol. 07

- Coalition formation : the role of procedure and policy flexibility

Annelies DE RIDDER , Eligius M.T. HENDRIX , Agnieszka RUSINOWSKA , Elena SAIZ Working Paper du GATE 2008 Vol. 06

- Les évaluations de coûts en santé sont-elles transférables ?

Marie-Odile CARRERE , Lionel PERRIER , Pascal POMMIER , Patrick SYLVESTRE BARON Working Paper du GATE 2008 Vol. 05

- The Fed and the ECB : Why such an apparent difference in reactivity ?

Grégory LEVIEUGE , Alexis PENOT Working Paper du GATE 2008 Vol. 04

- Monopolistic Competition and the Dependent Economy Model

Romain RESTOUT Working Paper du GATE 2008 Vol. 03

- Measuring influence in command games

Michel GRABISCH , Agnieszka RUSINOWSKA Working Paper du GATE 2008 Vol. 02

- Measuring influence among players with an ordered set of possible actions

Michel GRABISCH , Agnieszka RUSINOWSKA Working Paper du GATE 2008 Vol. 01

2007

- Modifying the Hoede-Bakker index to the Shapley-Shubik and Holler-Packel indices

Agnieszka RUSINOWSKA Working Paper du GATE 2007 Vol. 29

- The Peter Principle : An Experiment

David DICKINSON , Marie Claire VILLEVAL Working Paper du GATE 2007 Vol. 28

- Rupture structurelle et demande de monnaie au Rwanda

Jean-François GOUX , Thomas RUSUHUZWA KIGABO Working Paper du GATE 2007 Vol. 27

- Validité théorique de la Méthode des Choix Discrets : le cas du Traitement Hormonal substitutif de la Ménopause

Alain BREMOND , Marie-Odile CARRERE , Nora MOUMJID , Florence NGUYEN
Working Paper du GATE 2007 Vol. 26

- The Asian Crisis Contagion : A Dynamic Correlation Approach Analysis

Essahbi ESSAADI , Jamel JOUINI , Wajih KHALLOULI Working Paper du GATE 2007 Vol. 25

- Tax Evasion : Cheating Rationally or Deciding Emotionally ?

Giorgio CORICELLI , Mateus JOFFILY , Claude MONTMARQUETTE , Marie Claire VILLEVAL Working Paper du GATE 2007 Vol. 24

- Mesurer les préférences du consommateur pour orienter les décisions des pouvoirs publics : l’apport de la méthode expérimentale

Stéphane ROBIN , Anne ROZAN , Bernard RUFFIEUX Working Paper du GATE 2007 Vol. 23

- Why do women’s wages increase so slowly throughout their career ? A dynamic model of statistical discrimination

Nathalie HAVET , Catherine SOFER Working Paper du GATE 2007 Vol. 22

- Transitions CDD - CDI et différentiels de salaire : Résultats économétriques sur l’enquête Emploi

Mohamed Ali BEN HALIMA , Jean-Yves LESUEUR Working Paper du GATE 2007 Vol. 21

- Permanent vs Temporary Fiscal Expansion in a Two-Sector Small Open Economy Model

Olivier CARDI , Romain RESTOUT Working Paper du GATE 2007 Vol. 20

- Les Groupes régionaux latino-américains : building ou stumbling blocks ? Un modèle de gravité en données de panel

Jérôme TROTIGNON Working Paper du GATE 2007 Vol. 19

- Individual Responsibility and the Funding of Collective Goods

Louis LEVY-GARBOUA , Claude MONTMARQUETTE , Marie Claire VILLEVAL Working Paper du GATE 2007 Vol. 18

- Subjective Beliefs and Schooling Decisions

Christian BELZIL Working Paper du GATE 2007 Vol. 17

- Risk Aversion and Schooling Decisions

Christian BELZIL , Marco LEONARDI Working Paper du GATE 2007 Vol. 16

- The international transmission of monetary shocks in a dollarized economy : The case of USA and Lebanon

Charbel CORDAHI , Jean-François GOUX Working Paper du GATE 2007 Vol. 15

- Financing Constraint and Firm-Level Investment Following a Financial Crisis in Indonesia

Agustinus PRASETYANTOKO Working Paper du GATE 2007 Vol. 14

- Différentiels salariaux, segmentation et discrimination à l’égard des femmes sur le marché du travail chinoisIndonesia

Yi CHEN , Sylvie DEMURGER , Martin FOURNIER Working Paper du GATE 2007 Vol. 13

- Forest management policies and resource balance in China : an assessment of the current situation

Sylvie DEMURGER , Yang WEIYONG , Hou YUANZHAO Working Paper du GATE 2007 Vol. 12

- Diversification and agrarian change under environmental constraints in rural China : Evidence from a poor township of Beijing municipality

Sylvie DEMURGER , Martin FOURNIER , Yang WEIYONG Working Paper du GATE 2007 Vol. 11

- Optimal Group Incentives with Social Preferences and Self-Selection

Sabrina TEYSSIER Working Paper du GATE 2007 Vol. 10

- A forewarning indicator system for financial crises : the case of six Central and Eastern European countries

Irène ANDREOU , Gilles DUFRENOT , Alain SAND , Aleksandra ZDZIENICKA-DURAND Working Paper du GATE 2007 Vol. 09

- Mergers and collusion with asymmetric capacities

Emilie DARGAUD Working Paper du GATE 2007 Vol. 08

- Endogenous Leadership Selection and Influence

Emrah ARBAK , Marie Claire VILLEVAL Working Paper du GATE 2007 Vol. 07

- Experimental Economics : Contributions, Recent Developments, and New Challenges

Marie Claire VILLEVAL Working Paper du GATE 2007 Vol. 06

- Influence Indices

Michel GRABISCH , Agnieszka RUSINOWSKA Working Paper du GATE 2007 Vol. 05

- The not-preference-based Hoede-Bakker index

Agnieszka RUSINOWSKA Working Paper du GATE 2007 Vol. 04

- Patent Pools and the Dynamic Incentives to R&D

Vianney DEQUIEDT , Bruno VERSAEVEL Working Paper du GATE 2007 Vol. 03

- The Free Trade Agreement Between the United States and Morocco. The Importance of a Gradual and Assymetric Agreement

Lahsen ABDELMALKI , Mustapha SADNI-JALLAB , René SANDRETTO Working Paper du GATE 2007 Vol. 02

- Modeling the impact of real and financial shocks on Mercosur : the role of the exchange rate regime

Jean-Pierre ALLEGRET , Alain SAND Working Paper du GATE 2007 Vol. 01

2006

- Long-term capacity adequacy in electricity markets : Reliability contracts VS Capacity obligations

Mohamed Haikel KHALFALLAH Working Paper du GATE 2006 Vol. 14

- Statut résidentiel et durée de chômage : une comparaison microéconométrique entre la Grande-Bretagne et la France

Carole BRUNET , Andrew CLARK , Jean-Yves LESUEUR Working Paper du GATE 2006 Vol. 13

- Horizontal R&D Cooperation and Spillovers : Evidence from France

Désiré VENCATACHELLUM , Bruno VERSAEVEL Working Paper du GATE 2006 Vol. 12

- Testing Optimal Punishment Mechanisms under Price Regulation : the Case of the Retail Market for Gasoline

Robert GAGNÉ , Simon VAN NORDEN , Bruno VERSAEVEL Working Paper du GATE 2006 Vol. 11

- R&D Delegation in a Duopoly with Spillovers

Désiré VENCATACHELLUM , Bruno VERSAEVEL Working Paper du GATE 2006 Vol. 10

- The Return to Schooling in Structural Dynamic Models : A Survey

Christian BELZIL Working Paper du GATE 2006 Vol. 09

- Testing the Specification of the Mincer Wage Equation

Christian BELZIL Working Paper du GATE 2006 Vol. 08

- Can Risk Aversion Explain Schooling Attainments ? Evidence From Italy

Christian BELZIL , Marco LEONARDI Working Paper du GATE 2006 Vol. 07

- Promotions, Demotions, Halo Effects and Earnings Dynamics of American Executives

Christian BELZIL , Michael BOGNANNO Working Paper du GATE 2006 Vol. 06

- Competition, Hidden information, and Efficiency : an Experiment

Antonio CABRALES , Gary CHARNESS , Marie Claire VILLEVAL Working Paper du GATE 2006 Vol. 05

- Punishment, Inequality and Emotions

David MASCLET , Marie Claire VILLEVAL Working Paper du GATE 2006 Vol. 04

- Self-Selection and the Efficiency of Tournaments

Tor ERIKSSON , Sabrina TEYSSIER , Marie Claire VILLEVAL Working Paper du GATE 2006 Vol. 03

- La valorisation salariale et professionnelle de la formation en entreprise diffère-t-elle selon le sexe ? : l’exemple canadien

Nathalie HAVET Working Paper du GATE 2006 Vol. 02

- Effort and Comparison Income : Survey and Experimental Evidence

Andrew CLARK , David MASCLET , Marie Claire VILLEVAL Working Paper du GATE 2006 Vol. 01

2005

- Male and Female Competitive Behavior - Experimental Evidence

Nabanita DATTA GUPTAA , Anders POULSEN , Marie Claire VILLEVAL Working Paper du GATE 2005 Vol. 12

- Can Wages Signal Kindness ?

Emrah ARBAK , Laurence KRANICH Working Paper du GATE 2005 Vol. 11

- Social status and crime

Emrah ARBAK Working Paper du GATE 2005 Vol. 10

- The Choice of the Agenda in Labor Negotiations : efficiency and behavioral considerations

Manfred KONIGSTEIN , Marie Claire VILLEVAL Working Paper du GATE 2005 Vol. 08

- Monopolization through acquisitions in a differentiated product industry

Emilie DARGAUD Working Paper du GATE 2005 Vol. 07

- Corruption as Betrayal : Experimental Evidence on Corruption Under Delegation

Nicolas JACQUEMET Working Paper du GATE 2005 Vol. 06

- Neighborhood effects, public housing and unemployment in France

Claire DUJARDIN , Florence GOFFETTE-NAGOT Working Paper du GATE 2005 Vol. 05

- The demand for health insurance in a multirisk context

Mohamed Anouar RAZGALLAH Working Paper du GATE 2005 Vol. 04

- The determinants for labour contract length A French micro-econometric study

Mohamed Ali BEN HALIMA Working Paper du GATE 2005 Vol. 03

- The Pros and Cons of Higher Transparency : The Case of Speculative Attacks

Jean-Pierre ALLEGRET , Camille CORNAND Working Paper du GATE 2005 Vol. 02

- Will we pay the same way ? Empirical evidence of payment behaviours convergence on EMU panel data

Sandra DEUNGOUE Working Paper du GATE 2005 Vol. 01

2004

- Structural reforms, macroeconomic policies and the future of Kazakhstan

Gilles DUFRENOT , Alain SAND Working Paper du GATE 2004 Vol. 11

- Tax Evasion and Social Interactions

Bernard FORTIN , Guy LACROIX , Marie Claire VILLEVAL Working Paper du GATE 2004 Vol. 10

- Does Monitoring Decrease Work Effort ? The Complementarity Between Agency and Crowding-Out Theorie

David Dickinson , Marie Claire VILLEVAL Working Paper du GATE 2004 Vol. 09

- Other-Regarding Preferences and Performance Pay - An Experiment on Incentives and Sorting

Tor ERIKSSON , Marie Claire VILLEVAL Working Paper du GATE 2004 Vol. 08

- Speculative Attack and Informational Structure : An Experimental Study

Camille CORNAND
Working Paper du GATE 2004 Vol. 07

- Earnings Dispersion, Risk Aversion and Education

Christian BELZIL , Jörgen HANSEN Working Paper du GATE 2004 Vol. 06

- A Structural Analysis of the Correlated Random Coefficient Wage Regression Model

Christian BELZIL , Jörgen HANSEN Working Paper du GATE 2004 Vol. 05

- The Promotion Dynamics of American Executives

Christian BELZIL , Michael BOGNANNO Working Paper du GATE 2004 Vol. 04

- Life-cycle position and migration to urban and rural areas : estimations of a mixed logit model on French data

Cécile DETANG-DESSENDRE , Florence GOFFETTE-NAGOT , Virginie PIGUET Working Paper du GATE 2004 Vol. 03

- La demande de soins curatifs, l’auto-protection et l’auto-assurance

Mohamed Anouar RAZGALLAH Working Paper du GATE 2004 Vol. 02

- Does Resorting to Online Dispute Resolution Promote Agreements ? Experimental Evidence

Yannick GABUTHY , Nadège MARCHAND Working Paper du GATE 2004 Vol. 01