We report on several experiments on the optimal allocation of ownership rights. The experiments confirm the property rights approach by showing that the ownership structure affects relationship-specific investments and that subjects attain the most efficient ownership allocation despite starting...

Foreign bank entry is frequently associated with spillover effects for local banks and increasing competition in the local banking market. We study the impact of these effects on host countries, particularly, how these effects interact and how they depend on the competitive environment of the...

We consider a repeated family bargaining model that links the topics of employment and households. A key aspect of the model is that marital bargaining power is determined endogenously. We show that: (1) the efficiency of household decisions is sometimes inversely related to the prevailing...

Empirical evidence from the U.S. and the European Union suggests that regions which contribute to interregional redistribution face weaker borrowing constraints than regions which benefit from interregional redistribution. This paper presents an argument in favor of such differentiated budget...

This paper considers a government that chooses its tax and borrowing policy in order to minimize the present value of the excess burden caused by taxation. In doing so, the government uses hyperbolic discounting. It turns out that public deficits are positive even if public expenditures are...

Katz and Rapoport (2005) conclude that with linear production technology and the possibility of unilateral migration, region-specific shocks may increase the average level of education. Previously, Poutvaara (2000) derived a corresponding result with Cobb-Douglas technology and migration which...

This paper provides evidence about the determinants of trust and reciprocal inclinations, that is, a tendency for people to respond in kind to hostile or kind actions, in a representative setting. We investigate the prevalence of reciprocity in the population, the correlation between trust and...