A simple model of yardstick competition between jurisdictions is presented. Governments of jurisdictions face the alternative to choose between an old and a new policy with stochastic payoffs. The new policy is superior to the old policy in one state of the world, and inferior in the other....

We study whether current spending levels and public knowledge of them contribute to transatlantic differences in policy preferences by implementing parallel survey experiments in Germany and the United States. In both countries, support for increased education spending and teacher salaries falls...