Policies need not only to be well designed to effectively address market failures, but their parameters also need to be part of agents’ information sets. This is illustrated by government student loans in the Netherlands which are intended to alleviate liquidity constraints. Despite generous...

Incentive instruments like asset ownership and performance pay often have to strike a balance between the productive incentives and the rent-seeking incentives they provide. Standard theory predicts that a given instrument becomes less attractive when the effectiveness of rent-seeking activities...

Theory predicts that default breach remedies are immaterial whenever contracting costs are negligible. Some experimental studies, however, suggest that in practice default rules do matter, as they may affect parties' preferences over contract terms. This paper presents results from an experiment...

This paper analyzes the impact of a leading entrepreneurship education program on college students’ entrepreneurship competencies and intentions using an instrumental variables approach in a difference-in-differences framework. We exploit that the program was offered to students at one...

Standard economic theory predicts that firms will not invest in general training and will underinvest in specific training. Empirical evidence, however, indicates that firms do invest in general training of their workers. Evidence from laboratory experiments points to less underinvestment in...

Using a comprehensive Norwegian administrative database, we exploit independent quasi-experimental methods to estimate the effect of class size on student achievement at the end of lower-secondary school. Identification based on maximum class-size rules and population variation (and variations...

Experimental results are presented for a simplified version of Hart's (1995) theory of the firm. Theory predicts that investment levels remain constant when investors' no-trade pay-offs increase, if these pay-offs are threat points. While they may decrease when no-trade pay-offs are outside...