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With innovation as a third mission of universities, governments around the world have competitive funding schemes to support university-industry collaboration. Little is known about the effectiveness of these schemes compared to traditional competitive funding programs in increasing commercially valuable research outputs from universities. We explore whether university-industry targeted schemes are more effective by comparing two Australian funding programs that share the processes of how funds are awarded—one with a requirement of university-industry collaboration, the other traditional, not requiring collaboration. We use patenting activity as our measure of commercially valuable research outputs. We find that university inventors awarded university-industry targeted grants have greater patent activity compared to those awarded non-targeted grants. Analysing the dynamics, we find the effect is rather short lived, with an increase in patent activity in the year of award of grant not persisting in subsequent years. We find a similar effect on a university level. We also find that the number of new patent applications, but not patents granted, is greatest when universities achieve a mix of both types of funding.

Investing in complex financial products like hybrid securities demands a level of financial sophistication that is considered well beyond the capacity of most consumers. Yet many retail investors in the Australian market invest in these securities. We conduct multistage incentivised experiments to observe portfolio choice of participants to provide evidence on the behavioural biases and risk perceptions that can influence their allocation to hybrid securities. Illusion of control, overconfidence, and framing bias in consumers are found to be positively related to investment in hybrids while ambiguity aversion bears a negative relationship. Surprisingly, while participants generally acknowledge the difficulty in understanding the complex features, it does not deter them from investing in these securities. We also find that volatility, a standard measure of risk in finance theory, has no relationship with the participants’ allocation to any security whereas trust on the issuer has a significant bearing on such decisions. Our findings have important implications for regulators in demanding more effective disclosure of product information from issuers and designing targeted consumer education initiatives to protect retail investors.

With the upswing of populist, right-wing, and EU-skeptical parties and politicians in Europe, as well as the success of Donald Trump in the 2016 US presidential elections, the media and its role in democracies are, once again, under scrutiny. To investigate whether the media fulfill its role as the fourth estate, i.e. providing another level of control for government, or whether there is evidence of media capture, first, we introduce the Political Coverage Index (PCI), a new measure of the relative positioning of media within the political spectrum. In contrast to existing measures of political positioning (e.g., language similarities, explicit endorsements, mentions of ideological references), we utilize the tonality of articles and newscasts on political parties and politicians. Then, we apply the PCI to 35 opinion-leading media in Germany, on the basis of more than 10 million news items on political parties and politicians between 1998 and 2012. Lastly, we use the PCI to investigate whether the media fulfil its fourth estate role. Our findings show that the media outlets in our sample report more negatively on governing parties, which we interpret as suggestive evidence that media is fulfilling its role as fourth estate in democracies.

Communication is a well-known tool to promote cooperation and pro-social behavior. In this study, we examine whether minimal communication in form of public consent with a pre-defined cooperation statement is sufficient to strengthen cooperation in groups. Within the controlled environment of a laboratory experiment, we identify ways by which non-enforceable cooperation statements are associated with higher levels of cooperation in a public good setting. At first, the statement triggers selection; socially oriented individuals are more likely to make the cooperation statement. In addition, we can show that a behavioral change takes place once the statement is made. This change can be attributed to commitment arising from the pledge and to increased coordination between the interaction partners. Depending on the institutional context, these drivers can vary in strength. Comparing compulsory and voluntary cooperation statements, we find that both are effective in motivating higher contributions to the public good.

Although violence in healthcare settings has become a common occurrence worldwide, there is limited evidence on the spillover effects of patient violence on physicians' medical decisions. Utilizing microdata on inpatients from a major public hospital, we investigated how extreme patient violence-the murder of a physician in China-affected physicians' treatment decisions and patient welfare in a hospital geographically distant from the murder site. By matching this patient dataset to physician profiles, we performed a difference-in-differences analysis in which the treatment group comprised patients admitted shortly before and after the murder shock, and the control group consisted of patients admitted during the same months in the previous year. Immediately after the shock, the provision of medical treatment was notably higher, with a 16.9% increase in the number of surgeries and a 9.5% increase in the treatment expenditures. However, patient health outcomes were worse, with an increased mortality rate of 0.9% points. Findings suggest that patient violence dramatically changed physician behavior, causing negative consequences on patients even when the healthcare workers were not direct victims of patient violence.

In this article, we use economic experiments to explore the role of culture in labour market interactions between Australian employers and either Australian or Asian workers. We use two variants of the gift exchange game. In one, employers make binding, in the other non-binding, wage offers. Results show that attitudes and behaviour are similar across cultural groups, but intercultural interaction changes between the games. Non-binding wage offers are completely disregarded in final wage decisions by employers when made to Asians. However, Asians are rewarded more for additional effort.

We use an implicit association test to examine whether there is evidence of a negative stereotype, with Australians relatively weak in mathematical skills vis a vis Chinese. Based on an existing stereotype, we examine the impact of affirmative action on the effort level of Australians (the favoured group) within the context of a cross-country (Australia and China) laboratory experiment. We compare results across two distinct affirmative action programs; one in which a well-established negative stereotype exists and a baseline where no known stereotype prevails. We find that the effort level declines in the baseline, but not in the presence of a real stereotype.

This article introduces an incentive program that attempts to close the gap in educational attainment between Indigenous and non-Indigenous Australians, and provides an evaluation of its effectiveness. The program uses in-kind incentives conditional on achievement of a specific target for academic grades, classroom behaviour and attendance, coupled with information sessions on the importance of educational achievement. In 2012, all indigenous students enrolled in 21 high schools in Queensland were invited to take part in the program. Using a differences-in-differences design, we find that the program improved classroom behaviour and academic grades and reduced unexplained absences for female students only. In contrast, the program improved scores on a standardised national assessment test for male students. Moreover, we find that the program is only effective for students from intact families.

Risk aversion in game theory is usually modeled using expected utility, which was criticized early on, leading to an extensive literature on generalized expected utility. In this paper we are the first to apply &mu, &ndash, &sigma, theory to the analysis of (static) games. &mu, theory is widely accepted in the finance literature, using it allows us to study the effect on uncertainty endogenous to the game, i.e., mixed equilibria. In particular, we look at the case of linear &mu, utility functions and determine the best response strategy. In the case of 2 &times, 2 and N &times, M games, we are able to characterize all mixed equilibria.

Inspired by the work of Rubinstein, this study revisits data from a previous lab experiment to explore the relation between response times and tax compliance and understand the potential non-linearity between them by classifying decisions and individuals into compliance types. We find that individuals&rsquo, decision response time is related to their compliance decisions. Full-non compliant individuals (those who did not declare any earned income) have shorter response times than those who fully or partially complied. Full-compliant individuals also tend to declare income faster than partially compliant subjects. Such results are robust throughout time and when controlling for contextual characteristics of experimental design. We find non-linearity via an inverted U-shape function that reaches its maximum declaration time around a compliance rate of 60%, even after controlling for contextual experimental design factors. In addition, we observe a non-linear relation between cognitive skills, response time, and tax compliance. Participants with relatively high cognitive skills and very low or very high tax compliance level have low response times, while subjects with relatively lower cognitive skills tend to report higher decision times for higher compliance levels.

Although paying taxes is a key element of a well-functioning society, there is still limited understanding as to why people actually pay their taxes. Models emphasizing that taxpayers make strategic, financially motivated compliance decisions seemingly assume an overly restrictive view of human nature. Law abidance may be more accurately explained by social norms, a concept that has gained growing importance as research attempts to understand the tax compliance puzzle. This study analyzes the influence of psychic stress generated by the possibility of breaking social norms in the tax compliance context. We measure psychic stress using heart rate variability (HRV), which captures the psychobiological or neural equivalents of psychic stress that may arise from the contemplation of real or imagined actions, producing immediate physiologic discomfort. The results of our laboratory experiments provide empirical evidence of a positive correlation between psychic stress and tax compliance, thus underscoring the importance of moral sentiments for tax compliance. We also identify three distinct types of individuals who differ in their levels of psychic stress, tax morale, and tax compliance.

We compare the consistency of choices in two methods to used elicit risk preferences on an aggregate as well as on an individual level. We asked subjects to choose twice from a list of nine decision between two lotteries, as introduced by Holt and Laury (2002, 2005) alternating with nine decisions using the budget approach introduced by Andreoni and Harbaugh (2009). We nd that while on an aggregate (subject pool) level the results are (roughly) consistent, on an individual (within-subject) level, behavior is far from consistent. Within each method as well as across methods we observe low correlations. This again questions the reliability of experimental risk elicitation measures and the ability to use results from such methods to control for the risk aversion of subjects when explaining eects in other experimental games.

Credence goods markets suffer from inefficiencies caused by superior information of sellers about the surplus-maximizing quality. While standard theory predicts that equal mark-up prices solve the credence goods problem if customers can verify the quality received, experimental evidence indicates the opposite. We identify a lack of robustness with respect to heterogeneity in social preferences as a possible cause of this and conduct new experiments that allow for parsimonious identification of sellers' social preference types. Our results indicate that less than a fourth of the subjects behave in accordance with the standard assumption on preferences, the rest behaving either in line with other forms of selfish or in accordance with different variants of non- selfish social preferences. We discuss consequences of our findings for institutional design and agent selection.

We conduct an empirical study on the search and purchasing behavior of buyers on an Austrian price comparison site. On such a market a consumer typically searches for the cheapest price of a given product. Reliability and service of the supplier, however, are other important characteristics of an offer. We find robust evidence of consumer behavior that can be described as a two-stage procedure: shoppers first select a group of candidate offers based on the price only; then, in the actual buying decision consumers tradeoff a lower price with higher reliability of the retailer.

We study the effect of affirmative action on effort in an experiment conducted in high schools in socioeconomically disadvantaged areas in Queensland, Australia. All participating schools have a large representation of indigenous Australians, a population group that is frequently targeted by affirmative action. Our participants perform a simple real-effort task in a competitive setting. Those ranked in the top third receive a high piece-rate payment and all the others receive a low payment. We introduce affirmative action by providing the lowest (bottom third) performers with a positive handicap increasing their chances to achieve the high payment target. Our findings show that the policy increases effort of those that it aims to favour, without discouraging effort of those who are indirectly penalized by affirmative action.

Credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market break-down. We study in a large experiment with 936 participants the determinants for efficiency in credence goods markets. While theory predicts that either liability or verifiability yields efficiency, we find that liability has a crucial, but verifiability only a minor effect. Allowing sellers to build up reputation has little influence, as predicted. Seller competition drives down prices and yields maximal trade, but does not lead to higher efficiency as long as liability is violated.

Starting a firm with expansive potential is an option for educated and high-skilled workers. If there are labor market frictions, this additional option can be seen as reducing the chances of ending up in a low-wage job and hence as increasing the incentives for education. In a matching model, we show that reducing the start-up costs for new firms results in higher take-up rates of education. It also gives rise—through a thick-market externality—to higher rates of job creation for high-skilled labor as well as average match productivity. We provide empirical evidence to support our argument.