This study examines the financing choices of firms operating in a weak institutional environment. We argue that in relationship-based systems, global financing and political connections are substitutes: Well-connected firms are less likely to access foreign capital markets because (state-owned)...

In situations of excess demand, many firms use waiting lists to allocate products and services among their customers. The resulting allocation is likely to be inefficient, creating opportunities for Pareto improving trades among those who are waiting in line. Yet, in the queuing context, the...

We analyze the behavior of game-show contestants who play a one-shot game called Friend or Foe. While it is a weakly dominant strategy not to cooperate, almost half the contestants on the show choose to play ?friend.? Remarkably, the behavior of contestants remains uncha nged even when stakes...

Relative income differences are likely to lead to envy within a reference group. Envy in turn influences social behavior and on individual performance. While positional concerns are apparent in daily life, empirical evidence is rare in the economic literature. This paper investigates the impact...

Cross-disciplinary ?happiness research? has made big progress in the measurement of individual welfare. This development makes it tempting to pursue the old dream of maximizing aggregate happiness as a social welfare function. However, we postulate that the appropriate approach is not to...

This paper discusses a novel approach to elicit people?s preferences for public goods, namely the life satisfaction approach. Reported subjective well-being data are used to directly evaluate utility consequences of public goods. The strengths of this approach are compared to traditional...

The experimental literature and studies using survey data have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. Individuals are concerned about social comparisons....

Many studies have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. However, behavioral evidence is rare. This paper provides an empirical analysis on how individuals?...

Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. A homo economicus, with a more refined motivation structure, helps us to shed light on this puzzle. This paper provides empirical evidence for the...