Behavioral

Main content

The Political Economy of Environmental Regulation

Summary

Our research focuses on the political economy of environmental policy instruments. We use contest theory to analyze the strategic interaction of agents competing for rents that produce externalities. We have shown that contemporary forms of command-and-control regulation may be more efficient than typically portrayed in the literature. In some cases, the efficiency of environmental standards stipulated via benchmarking may be increased through lobbying. In recent work, we examine environmental policy in an open economy when the regulator is influenced by interest groups. We aim to provide a new motivation for why environmental policy diffusion – i.e., a country adopting the stricter regulation of its trading partners – may occur.

Publications and working papers

Gerigk, J., I.A. MacKenzie, and M. Ohndorf: A model of benchmarking regulation: revisiting the efficiency of environmental standards. Environmental and Resource Economics, forthcoming

Participating researchers

One Good Deed a Day?

Summary

Individuals have opportunities to behave pro-socially at different points in time. This paper investigates the interdependence between temporarily separated good deeds and their effect on utility. In a multi-session laboratory experiment, subjects play a donation dictator game. A first group runs through two sessions on the same day. For a second group of subjects there is a time-lag of one week between sessions. I find that in both treatments subjects decrease their donation decision in the second session. This afterglow effect is less pronounced, however, the longer it has been since the last good deed. In line with the underlying theoretical predictions, doing good in one time period has a positive effect on utility in future time periods and thus reduces the likelihood to subsequently undertake acts of kindness. Time passed between good deeds remedies this 'afterglow' effect and increases the probability that people do good again.

Publications and working papers

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2538410

Participating researchers

Tax Compliance and Information Provision – A Field Experiment with Small Firms

Summary

We study tax compliance in Slovenia using data generated in a field experiment. Small accounting companies were randomly assigned to an untreated control group and two treatment groups. Companies in the first treatment group received a letter that highlighted the importance of paying taxes and informed about the likelihood of becoming subject to an audit. In the second treatment group, tax officers from the tax authorities handed out in person the same letter that companies in the first treatment group received by post. The results indicate that such letters can increase compliance, and trigger even more compliance if handed over in person. These findings are in line with the theoretical predictions that we derive to rationalize the experiment.

Publications and working papers

IZA Discussion Paper No. 9013

Participating researchers

 

 
 
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