Search

In the labor economics literature, discrimination is often defined as occurring when identically productive workers, placed in the same working conditions, are assigned contracts involving, in particular, different hourly wage rates. This paper applies contract theory to explain how in some circumstances such differences take place, even if contract discrimination and productivity differences are strictly ruled out. It is assumed that worker types differ only in their consumption/leisure preferences and in their availability. A labor cost-minimizing firm offers a menu of labor contracts, and lets workers self-select. The model reveals external effects between types and the possibility of a paradoxical situation in which less demanding workers obtain a higher wage rate. A mixed employment regime always requires a minimum number (a quantum) of most demanding workers.

This paper introduces a new task to elicit individual aversion to deceiving, based on a modified version of the Deception Game as presented in Gneezy (2005). A multiple price list is used to determine the deception premium asked by an individual to switch from faithful to deceitful communication. The results show that, depending on payoffs, 71% of the subjects will switch at most once. Among them, 40% appear to be either “ethical” or “spiteful”. The other 60% respond to incentives in line with the cost of lying theory; they will forego faithful communication if the benefit from deceiving the other is large enough. Regression analysis shows that this deception premium is independent of the risk aversion and social preferences of the subject; it would thus capture an inner preference for behaving well.

This paper analyses the equilibrium of a two-person “pledge and give” game and tests its predictions in a lab experiment. Each person’s endowment is private information. In the first stage, each agent informs the other about the amount he/she intends to give. In the second stage, each agent makes a contribution to the joint donation. We show that a linear pledge function can be an equilibrium of the game. Furthermore, if agents have a strong taste for conformity, the equilibrium donation is positively related to one’s own endowment and to the pledge of his partner. In the lab, subjects pledged on average 60% of their income and donated on average 50% of their income. High pledges foster the generosity of the partner: an agent will increase the donation by 20 cents on average if the partner pledges one extra euro.

In some countries, including France, patients can choose between consulting a physician working in the regulated sector where, in general, fees are fully covered by health insurance (whether public, private or mixed), or a physician working in the unregulated sector, where a balance billing scheme operates. In the latter, fees might not be fully covered by health insurance, and patients must make out-of-pocket payments. The paper analyses the signalling properties of this mechanism in a context where patients are heterogenous with respect to their propensity to adhere to the prescribed treatment. The model reveals that a small extra fee allows to obtain a separating equilibrium in which only patients with a high propensity to adhere to the treatment will opt for the unregulated sector and benefit of a higher care effort on behalf of their physician. We also analyse the other equilibria of the game and comment on their welfare properties.

The French market for specialist physician care has a dual legal structure: physicians must exclusively work in sector 1 and charge regulated fees or in sector 2, where they can freely set their fees. Patient out-of-pocket payments in sector 2 are partially covered by private insurance. The primary differentiating factor between both sectors is the number of patients per specialist, which in turn directly affects the overall quality of the service provided. We built an equilibrium model to analyse both specialists decisions about which sector to work in, and patients choice of physician and therefore sector. More specifically, the model allowed us to study the effect of changes in prices and economy-wide patient-to-specialist ratios on profits and patients utility associated with the services provided in each sector.

This paper reports data from a sender-receiver experiment that compares lying behavior between two groups of students, one in business administration and the other in medicine. We use a modified version of the sender-receiver deception game introduced by Erat and Gneezy (2012) to collect data on 393 subjects. The results show that both groups of students respond to incentives as expected: the frequency of lying is higher, the higher the benefit for the sender, and the lower the loss for the receiver is. For given payoffs, there is little difference between the two groups in the domain of white lies; however, business students resort to selfish lies more frequently than do medical students. Furthermore, the analysis does not confirm differences in altruism between the two groups. A representative survey reveals a substantial degree of coherence between the beliefs of the general public of France and behavior observed in this lab experiment.

The important flows of irregular migration could not exist without the emergence of a criminal market for smuggling services. A matching model à la Pissarides (2000) provides a well-suited framework to analyze such a flow market with significant trade frictions. Our analysis considers the competitive segment of this underground market in which small-business smugglers can freely enter. The model allows us to determine the equilibrium number of smugglers, the matching probability, the number of successful irregular migrants and, as an original concept, the equilibrium migrant welfare. Changes in parameters can be related to the various policies implemented by destination countries to cut down irregular migration.

This paper reports the results from a two-person "pledge and give" experiment. Each person's endowment is private information available only to him. In the first stage, each agent informs the other about the amount he intends to give, or makes a pledge. In the second stage, each agent makes a contribution to the joint donation. A simple theoretical model shows that in this game the equilibrium pledge function is linear in the endowment of each agent. Furthermore, if agents have a strong taste for conformity, the optimal gift is positively related to one’s own endowment and to the pledge of his partner. Data from the lab experiment show that, indeed, subjects pledge approximately 60% of their endowment. Also, pledges have an important social influence role: an agent will increase his donation by 20 cents on average if his partner pledges one more euro.

This paper introduces a new task to elicit individual aversion to deceiving, defined as the lowest payoff for which an individual agrees to switch from faithful to deceitful communication. The core task is a modified version of the Deception Game as presented in Gneezy (Am. Econ. Rev. 95 (1): 384-395: 2005). Deceitful communication brings about a constant loss for the receiver, and a range of benefits for the sender. A multiple-price-list mechanism is used to determine the senders communication strategy contingent on the various benefits from deception. The results show that 71% of the subjects in the sender role will implement pure or threshold communication strategies. Among them, 40% appear to be process driven, being either "ethical" or "spiteful". The other 60% respond to incentives in line with the fixed cost of lying theory; they will forego faithful communication if the benefit from deceiving the other is large enough. Regression analysis shows that this reservation payoff¤ is independent of the risk aversion and social preferences of the subject; it would thus capture an inner preference for "behaving well".

In some countries, including France, patients can choose between consulting a physician working in the regulated sector where, in general, fees are fully covered by health insurance (whether public, private or mixed), or a physician working in the unregulated sector, where a balance billing scheme operates. In the latter, fees might not be fully covered by health insurance, and patients must make out-of-pocket payments. The paper analyses the signalling properties of this mechanism in a context where patients are heterogenous with respect to their propensity to adhere to the prescribed treatment. The model reveals that a small extra fee allows to obtain a separating equilibrium in which only patients with a high propensity to adhere to the treatment will opt for the unregulated sector and benefit of a higher care effort on behalf of their physician. We also analyse the other equilibria of the game and comment on their welfare properties.

In April 2013, all of the major academic publishing houses moved thousands of journal titles to an original hybrid model, under which authors of accepted papers can choose between an expensive open access track and the traditional track available only to subscribers. This paper argues that authors might use publication strategy as a quality signaling device. The imperfect information game between authors and readers presents several types of Perfect Bayesian Equilibria, including a separating equilibrium in which only authors of high quality papers are driven toward the open access track. The publishing house will choose the open-access publication fee that supports the emergence of the highest return equilibrium. Journal structures will evolve over time according to the journals’ accessibility - quality profiles.

This paper analyses the relationship between regular and irregular migration taking into account the migration network effect and the network creation mechanism. We assume that migrants can obtain a high payoff only if a critical mass of migrants is reached in the destination country. If candidates to migration receive biased signals about the economic situation of the destination country, the migrants’ decision problem can be analyzed as a standard global game. Tying the quota of regular migrants to the economic performance of countries might create large discontinuities in immigration flows, with some countries attracting the bulk of irregular migrants and the other being shunned by the migrants.

In a classical experiment, Niederle and Vesterlund (2007) used the dichotomous choice of individuals between a piece rate and a tournament payment scheme as an indication of their propensity to compete. This paper reports results from a two person interaction of a similar type to analyze whether the preference for competition is dependent on the gender of the partner. It introduces a Becker–DeGroot–Marschak mechanism to elicit individual willingness to compete (WTC), defined as the amount of money that makes an individual indifferent between the two compensation schemes. Even when controlling for risk aversion, past performance and overconfidence, the male WTC is e3.30 larger than the female WTC. The WTC instrument allows for a more precise analysis of the impact of the partner's gender on the taste for competition.

This paper analyzes the consequences of allowing for punishment in a real-effort pair production experiment. The behavior of the best performer in the team differs on whether he or she can impose a sanction on the less performing partner. When sanctions are not allowed, good performers reduce their effort in response to the advantageous difference in scores; when they can impose sanctions, their change in effort is no longer related to the difference in scores. To some extent, a sanction mechanism allows good performers to focus on their own performance. In the case of costless sanctions, not sanctioning a partner who under-performs, what we refer to as forgiveness, prompts the latter to improve his or her performance, but applying the sanction has a stronger push effect. Copyright © 2014 John Wiley & Sons, Ltd.

This paper analyzes how faculty members dynamically allocate their efforts between improving their research and teaching skills, taking into account the organizational structures and incentives implemented by academic institutions. The model builds on the assumption that organizational structures have an impact on the nature of spillover effects between teaching and research competencies. We analyze the dynamic equilibrium under unilateral and bilateral spillovers, using the no-spillover case as a benchmark. The bilateral spillover case is the most appealing as it achieves the highest overall performance; however, the nature of the equilibrium and the career paths can be quite different depending on the parameters of the problem such as the obsolescence of competencies or the strength of the spillover effect. This finding provides interesting insights on what could be the most productive configuration of a higher education institution.

This paper argues that in Euro-area economies, where the ECB cannot bail-out …nancially distressed governments, the …scal multiplier is adversely affected by the amount of public debt. A regression model on a panel of 26 EU countries over the period 1996-2011 shows that a 10 percentage point increase in the debt-to-GDP ratio is connected to a slowdown in annual growth rates of 0.28 percentage point. Furthermore, the e¤ectiveness of …scal spending is adversely affected by the amount of public debt; for a debt-to-GDP ratio above 150% the impact on growth of the …scal stimulus turns negative.

This paper analyzes the effect of stricter sanctions against fraudulent disclosure in an economy where commercial lenders have only an imperfect information about the type of the firm they trade with. In the hybrid Bayesian equilibrium, some managers running fragile firms claim that their firm is solid only to benefit of better commercial credit terms. The default premium charged by the supplier over the normal cost can be interpreted here as an indirect bankruptcy cost. When the sanction gets heavier, both the default premium and the frequency of defaulting firms go up. Under given circumstances, these perverse effects might be offset by a decline in direct bankruptcy costs.

This paper investigates the production of research in business and economics. A scholar's reward is positively related to the quantity and quality of research. In turn, the quality of a paper depends on the scholar's ability to internalize new ideas and the overall quality of external research. The individual scholar is subject to a trade-off between writing more papers or reading in order to take in new ideas. In the Nash symmetric equilibrium, the quantity and quality of published papers are jointly determined. Under reasonable assumptions about the research production process, in equilibrium researchers write too many papers of too low a quality compared to the cooperative outcome. The model sheds some light on the effectiveness of various research policies currently under review by European policymakers.

This paper analyzes the production of fraudulent financial statements in a model featuring the main characteristics of the US corporate information market. Main players are managers, shareholders, auditors and the auditors’ public supervisor. It is shown that, in the overall equilibrium, not only managers at the head of bad firms, but also some of those running good firms may resort to dishonest reporting. The probability of cheating appears to be positively related to the frequency of good firms. Pushing too far the supervisor’s incentives to fight fraud might prompt more good firms’ managers to provide dishonest reports.

Many governments in developing countries contemplate the possibility of increasing the flexibility of their exchange rates despite having accumulated substantial dollar-denominated debt. Using a model of corporate dollar debt in which the future exchange rate is uncertain, this paper studies the financial risks that might arise as a consequence of increased exchange rate flexibility. Since a firm may default on its debt either because its dollar income is too low or because investors refuse to roll over its debt, the measure of the overall risk of default should take into account both factors, as well as their interaction. Solving the model for the no-default rational expectations equilibrium, we find that a small risk of insolvency may bring about a substantial risk of illiquidity.

This paper analyses the European central bank (ECB) monetary policy over the period 1999–2006, with a special emphasis on the recent years. The first part of the paper underlines the declared goals, decision variables and procedures, as can be inferred from various speeches of Jean-Claude Trichet, the President of the ECB. These statements are then weighted against the data, mainly through estimates of possible ECB interest rate rules. While in many respects the bank has performed reasonably well, several issues may be raised, mainly because the inflation objective has not been reached during the last period and monetary developments are not in line with economic stability. Policy recommendations follow, built on a renewed monetarist tradition: the reduction of the weight of real activity in the conduct of monetary policy, while further emphasising money via a money growth intermediate target.

International audience; We design an experiment to investigate whether asking people to state how much they will donate to a charity (i.e., to pledge) increases their actual donation. Individuals’ endowment is either certain or a random variable. We study different types of pledges, namely, private, public and irrevocable, which differ in terms of the cost to the individual for not keeping the promise. We show that in absence of endowment uncertainty, private and public pledges are associated with lower donations as compared to donations in the no-pledge case: private pledges slightly reduce donations and public pledges reduce them more significantly. Donations increase with uncertainty (in terms of increased endowment dispersion) for both private and public pledge situations, although donations with private pledges remain higher than donations with public pledge.

This paper reports results from a three-player variant of the ultimatum game in which the Proposer can delegate to a third party his decision regarding how to share his endowment with a Responder with a standard veto right. However, the Responder cannot verify whether the delegation is effective or the third party merely plays a “scapegoat” role, while the decision is made by the Proposer himself. In this uncertain attribution setting, the Proposer can send an unverifiable message declaring his delegation strategy. One possible strategy is “false delegation”, in which the Proposer makes the decision but claims to have delegated it. In our sample, the recourse to false delegation is significant, and a significant number of potential Delegates accept serving in the scapegoat role. However, there are many honest Proposers, and 20% of all Delegates will refuse to be the accomplices of a dishonest Proposer. Responders tend to more readily accept poor offers in a setup that permits lying about delegation; the acceptance rate of the poor offer is the highest when Delegates can refuse the scapegoat role.

During the US Internet bubble (1995-2001), several top executives dismissed both the law and ethical norms transferring large chunks of company wealth into their own hands. This paper investigates the key economic factors that brought about the proliferation of dishonest managerial behaviour, focussing on the weak internal control, perverse incentives related to managers' compensation schemes and conflicts of interest in the banking and auditing sectors. In order to prevent further abuses, the US administration imposed several regulatory changes, mainly through the Sarbanes- Oxley Act of 2002; we argue why some of its provisions might be taken one step further.

This paper presents estimates of the European Central Bank (ECB)'s interest rate rule using monthly data for the period of the Willem F. Duisenberg presidency (from January 1999 to October 2003). Our results show that, like the US Federal Reserve, the ECB appears to be concerned with fluctuations in economic activity. It increases its short-term interest rate if inflation deviates from target, this reaction being stronger if based on future inflation and weaker if based on current inflation. The seemingly soft response to current inflation derives from a concern for exchange rate stability and may reflect the Bank's forecast of future inflation. The ECB also appears to smooth its interventions in the money market.

Sometimes homogenous goods trade at different prices and some other times different qualities trade at the same price. This paper analyses such deviations from the “Law of One Quality–One Price” within the framework of an equilibrium search model. On the supply side, firms decide on both the price and the complexity index of a unit good. On the demand side, consumers search for the best offer in a sequential way. By assumption, only some “expert” consumers need the new feature incorporated into the complex item. In equilibrium, consumers’ searching strategy and firms’ price–quality optimal choice are mutually consistent. Non-degenerated equilibrium price and/or quality distributions emerge, in keeping with the proportion of expert consumers in total consumer population.

According to a well-established economic principle, any public debt that does not exceed the discounted stream of future primary surpluses should find buyers. This paper argues why this principle may not hold if the government has only imperfect control over its net income flow. A small risk of unsustainability appears to be at the origin of a much larger risk of illiquidity. Solving the model for the rational expectations equilibrium, we find that the maximum debt level that investors are willing to hold may be much lower than the commonly used sustainable level.

Euro candidates are expected to maintain the value of their currency within the fluctuation band of the new exchange rate mechanism for at least two years. This paper highlights some unpleasant macroeconomic effects that could occur during this interval. The problem is cast as a two-stage sequential game between private agents and the government of the applicant country. The policy-maker decides whether to devaluate the domestic currency or not at two distinct dates; it makes a last choice just before accession to the monetary union. Under an assumption of incomplete information of private agents about the government's priorities on inflation and economic activity, the game presents a hybrid perfect Bayesian equilibrium. In the pooling configuration, an initial policy of zero devaluation does not signal the final devaluation decision. As private agents cannot completely rule out the risk of a ‘last devaluation’, a premium adds to interest rates and entails a systematic output loss.

The possibility of facing dishonest local managers is an important factor explaining foreigners’ hesitations about investing in developing countries. The first part of the paper analyses the optimal decision rule of a manager who is able to transfer into his own hands a part of the output of the firm. It is shown that in a two-period framework with incomplete information about the nature of the manager, a rational expectations equilibrium exists where managers’ behaviour and investors’ expectations are mutually consistent. In particular, some young managers may aim at building a reputation of an honest person, then behave dishonestly when getting old. The global performance of an economy hosting a large number of managers is investigated in the second part of the paper, where analysis is cast in an overlapping generation framework. The frequency of dishonest managers, development prospects and global profitability appear to depend on the duration of the relationship between investors and managers.

This paper develops a simple model showing how banks can increase the access to finance of small, risky firms by mitigating coordination problems among investors. If investors observe a biased signal about the true implementation cost of real sector projects, the model can be solved for a switching equilibrium in the classical global games approach. We show that the socially optimal interest rate that maximizes the probability of success of the firm is higher than the risk-free rate. Yet if banks maximize investors' expected return, they would choose an interest higher than the socially optimal one. This gives rise to a form of credit rationing, which stems from the funding constraints of the banks., Nous étudions le financement des PME par les banques dans un modèle de type "global games". Il apparait que le taux d'intérêt d'équilibre dans une économie décentralisée avec secteur bancaire concurrentiel est supérieur au taux d'intérêt qui assure le plus grand taux de réussite des projets.

In the aftermath of the Second World War, European citizens shared the belief according to which an economically integrated Europe would prevent European peoples from fighting each other again. If this argument still remains valid, many younger European citizens, who did not go through the war atrocity, are supporting the European project insofar as it associated to an image of modernity, openness, and, ultimately, higher living standards.

Voucher privatization implies a significant wealth transfer from state to private agents who, in turn, would increase consumption. This paper investigates the consequences of this wealth effect on the macroeconomic equilibrium in a high unemployment economy. The model builds on a two-stage sequential game between the government and private agents. We verify the existence of a pooling equilibrium in which private agents cannot guess whether a policy of fast privatization will be continued in the future or not. This configuration presents an endogenous probability of privatization slowdown; as a consequence, the wealth effect is moderated and the genuine fast privatizer government bears an “undue” credibility cost in terms of employment

This paper develops two stylised models of the transition economy that challenge, to some extent, the conventional approach to policy reforms. In the first model, the absence of market-oriented institutions is responsible for the occurrence of a non-cooperative equilibrium, where the amount of public services provided by the state is too low, which, in turn, adversely affects the global performance of the economy. In the second model, a benevolent government will choose a taxation level that pushes too many firms out of the market; hence global supply falls below its optimal level. In both models, disruptions specific to transitional systems lead to abnormal responses to standard fiscal policy.

This paper aims to provide a simple trade union model which highlights some of the distinctive institutional features of French unionism. The model focuses on the determinants of militancy and membership in a frictionless economy. It brings into the picture three types of agents and their specific behaviour: firms accept to pay a premium in order to avoid strikes, individuals participate in the union in order to maximise their expected income and union leadership seeks to maximise his/her net personal gain. By adapting militancy—broadly defined as hard stance during the annual wage bargaining—the union leader may achieve a unionisation rate consistent with his/her own objectives. It is shown that a non-Walrasian labour market equilibrium exists wherein real wages, employment, union size and militancy are jointly determined. In comparative statics, the model predicts a negative relationship between militancy and membership; recent evolutions of the main French union confederations tend to support this conclusion.

We investigate the dynamics of cooperation in public good games when contributions to the public good are immediately redistributed across contributors (intra-temporal transfers) and when contributions to the public good by the current group are transferred over time to a future group (inter-temporal transfers). We show that people are more cooperative in inter-temporal contexts than in intra-temporal contexts. We also find that subjects invest more on average in public goods when they know in advance their inheritance from the past., Nous étudions un jeu du bien public avec transferts inter temporels. Les résultats indiquent une forme d'altruisme intergénérationnel.

This paper reports the results from a real-effort team production experiment, where best performers can impose either tacit or explicit sanctions on their less-performing partners. The behavior of the best performer in the team differs from one condition to another. When explicit sanctions are not allowed, good performers reduce their effort in response to the advantageous difference in scores; when they can impose sanctions, their change in effort is no longer related to the difference in scores. To some extent, a mechanism of explicit sanctions allows good performers to focus on their own performance. Not sanctioning an opponent who under-performs, what we refer to as forgiveness, prompts the latter to improve his performance, but applying the sanction has a stronger effect., L'article propose une étude expérimentale appliquée au problème du travail d'équipe. La tache consiste à compter le nombre d'occurrences du chiffre 7 dans des blocs de chiffre. Les équipes sont composées de deux joueurs. A chaque tour, le joueur qui fait le meilleur score peut appliquer une sanction à l'autre. Nous étudions les stratégies et les comportements des deux joueurs, dans une interaction qui dure quatre tours.

This paper analyzes how faculty members dynamically allocate their efforts between improving their research and teaching skills, taking into account the organizational structures and incentives implemented by academic institutions. The model builds on the assumption that organizational structures have an impact on the nature of spillover effects between teaching and research competencies. We analyze the dynamic equilibrium under unilateral and bilateral spillovers, using the no-spillover case as a benchmark. The bilateral spillover case is the most appealing as it achieves the highest overall performance; however, the nature of the equilibrium and the career paths can be quite different depending on the parameters of the problem such as the obsolescence of competencies or the strength of the spillover effect. This finding provides interesting insights on what could be the most productive configuration of a higher education institution.

This paper proposes a two-country model of migration in a transferable skill sector, where workers’ education is provided free of charge by governments. We study firstly the non-cooperative equilibrium where the poor country decides on the education level and the rich country decides on the quota of skilled migrants. Additional migration raises earnings prospects in the source country and attracts more talented people to that profession, what we refer to as the sector-specific brain gain effect. This game presents a single stable equilibrium with positive migration. Compared to the cooperative equilibrium, in the non-cooperative equilibrium the poor country systematically under-invests in education. Whether migration is too strong or too weak depends on the size of the brain gain effect. Furthermore, the size of the welfare gain to be reaped by moving from non-cooperative to the cooperative organization of migration also depends on the strength of the sector-specific brain gain.

Le riforme verso l’economia di mercato, poste in essere nei Paesi ex-socialisti dell’Europa Centrale e Orientale, comportano dei costi, sia in termini di disoccupazione, sia in termini di alti tassi di inflazione, soprattutto all’inizio della fase di transizione. Inoltre, nelle economie in transizione, la mancanza di esperienza di mercato implica una struttura imperfetta delle informazioni ed un alto grado di incertezza economica. Nell’analisi dei fattori strutturali che incidono sull’occupazione nelle economie in transizione, assume rilievo la distinzione di due settori principali dell’economia: il settore statale, costituito dalle imprese ex-socialiste, ed il settore privato, formato dalle nuove piccole e medie imprese emergenti. Il livello dell’occupazione si determina attraverso una contrattazione tra i lavoratori e i proprietari. Dato che il tasso di inflazione decresce al diminuire del potere contrattuale dei lavoratori, le privatizzazioni dovrebbero determinare un più basso tasso di inflazione. Questi fatti portano a concludere che le privatizzazioni e la lotta all’inflazione sono obiettivi compatibili.

Humans often lie strategically. We study this problem in an ultimatum game involving informed proposers and uninformed responders, where the former can send an unverifiable statement about their endowment. If there are some intrinsically honest proposers, a simple message game shows that the rest of them are likely to declare a lower-than-actual endowment to the responders. In the second part of the paper, we report on an experiment testing this game. On average, 88.5% of the proposers understate the actual endowment by 20.5%. Regression analysis shows that a one-dollar gap between the actual and declared amounts prompts proposers to reduce their offer by 19 cents. However, responders appear not to take such claims seriously, and thus the frequency of rejections should increase. The consequence is a net welfare loss, that is specific to such a "free-to-lie" environment.

Humans can lie strategically in order to leverage on their negotiation power. For instance, governments can claim that a "scapegoat" third party is responsible for reforms that impose higher costs on citizens, in order to make the pill sweeter. This paper analyzes such communication strategy within a variant of the ultimatum game. The first player gets an endowment, and the second player can impose a tax on it. The former can reject the allocation submitted by the tax-setter. A third party is then allowed to levy its own tax, and its intake is private information to the tax-setter. In a frameless experiment, 65% of the subjects in the tax-setter role overstate the tax levied by the third party in order to manipulate taxpayer's expectations and submit less advantageous offers; on average, for every additional currency unit of lie, measured by the gap between the claimed and the actual tax, they would reduce their offer by 0.43 currency units.

Les jeux de gladiateurs ont constitué un élément majeur sous l’influence romaine et ce jusqu’à la fin du IVe siècle. L’organisation de ces jeux provoquait un coût considérable et les gladiateurs étaient eux-mêmes pour une bonne partie des professionnels issus d’écoles de gladiature qu’il fallait entretenir. Le recouvrement de l’ensemble de ces coûts était assuré par les Magistrats qui les organisaient. Pour attirer les spectateurs, la qualité du spectacle était indispensable. De ce point de vue, la personne clé dans la perpétration des jeux était le Président qui arbitrait les affrontements. Par le pouvoir de sanction qui lui était conféré sur la vie ou la mort des combattants, il exerçait une incitation à la qualité du spectacle. Gladiator games constituted a major element under roman influence, which lingered on until the fourth century AD. The organization of these games was very expensive, and gladiators were to a large extent professionals, trained in gladiator schools. The overall costs were covered by fees paid by the Roman Magistrates who organized these shows. In order to attract them, the quality of the show was essential. From this point of view, the key person in the process of preparation of the show was the President who was granted the right to decide over life and death of the defeated gladiator. The judge’s strategy had a major impact on the quality of the show.

When governments loose investors' confidence, additional public spending and the resulting increase in public debt would push-up risk-adjusted interest rates in a more aggressive way. A regression model on a panel of 26 EU countries over the period 1996-2011 shows that a 10 percentage point increase in the debt-to-GDP ratio is connected to a slowdown in annual growth rates of 0.28 percentage point. Furthermore, the effectiveness of fiscal spending is adversely affected by the amount of public debt; for a debt-to-GDP ratio above 150% the impact on growth of the fiscal stimulus turns negative.

The coexistence of a predominantly poor opinion of free markets and lack of education in economics are two documented features of France. In this paper, we use data collected through an Internet-based survey conducted in December 2009 in order to test whether this situation is more than a mere coincidence. A first regression model allows us to study how personal characteristics, general and economics education, occupation and personal interest in economics affect knowledge in economics. We then apply factor analysis in order to build an aggregate indicator of opinion on promarket reforms. This opinion indicator becomes the dependent variable in a second multiple regression model; it turns out that knowledge in economics contributes by 3.5% to explain the favorable opinion on pro-market reforms.

This paper analyzes international migration when migrants invest part of their income in their country of origin. We show that a non-total migratory equilibrium exists. Exogenous shocks, such as an increase in migrant income, lead to an increase in optimal invested remittances per migrant, and a higher wage in the country of origin. Yet the net effect on the equilibrium number of migrants is positive. Hence, in equilibrium, emigrants' optimal invested remittances and number of migrants are positively related. We use data from twenty five countries in Eastern Europe and Central Asia in 2000 to test for this implication of our model. OLS and bootstrap estimates reveal a positive elasticity of the number of migrants with respect to estimated invested remittances per migrant in the range of [0.3; 0.7].

This paper shows that if a very small, exogenously given probability of terminating the exchange is introduced in an elementary investment game, more reciprocators will choose the defection strategy. Everything happens as if they “hide behind probabilities” in order to break the trust relationship. Investors do not alter their behavior in a significant way, at least not for a very small external risk. Financial assets all come with a predetermined and contractual probability that by the time when the buyer has to receive the reward for his investment, “bad luck” might have brought the asset value down to zero. In the light of the experimental findings, such trades would not provide a favorable environment for building trust.

The dominant approach to monetary policy builds on simple linear policy rules, assumed to describe the systematic response of central banks to various shocks. The last financial crisis has shown that in difficult times central banks follow more sophisticated strategies. We argue in this paper that such responses can be defined as optimal responses of the policymaker and not as deviations from a simple linear rule. For so doing, we propose an alternative approach inspired by the financial management literature. The central bank is represented as a portfolio manager that gears the policy instrument in order to achieve multiple policy goals in a stochastic continuous-time setting. Possible asymmetries in the reaction function are considered, translated in the form of calls and puts. The optimization program solution is interpreted in the light of the principles governing the portfolio manager optimal behavior. A novel result is also provided as to the necessity to incorporate the stock price stabilization term in the central bank decision rule.

The main driving force of the financial crisis of 2007-2009 was a rapid deterioration of the trust of private agents in the quality of financial institutions. In turn, this loss of confidence entailed the collapse of several key asset markets and a sharp decline in the other asset prices. This paper surveys the critical moments of the crisis, puts forward some of the shock amplifying mechanisms and comments on the effectiveness of various policy measures. The conclusion opens the debate on what structural changes in the existing financial architecture are required to contain such crises in the future., L'article retrace les moments critiques de la crise financière 2007-2009, etudie les mecanismes de propagation des chocs, evalue les politiques économiques mises en oeuvre pour faire face à cettre crise.

ED EPS; This paper analyzes the interaction between migrants income and remittances and between remittancesand the labor supply of residents. The model is cast as a two-period game with imperfect informationabout the residents' real economic situation. Residents subject to a good economic situation may behave as if they were in a poor economic situation only in order to manipulate remitters' expectations. The latter, being aware of this risk, reduce the remitted amount accordingly. Therefore, in the equilibrium, residents who really are victims of the bad economic outlook, are penalized as compared to the perfect information set-up. In some circumstances, they can signal their type by drastically cutting working hours, thus further enhancing their precarity right when their economic situation is the worst.