Contributions published at Theory of Economic Policy and Non-Market Economics (Bruno Frey)

Die ökonomische Analyse des Glücks anerkennt, dass wirtschaftliche Aktivität kein Selbstzweck ist, sondern nur insoweit von Wert, als sie zur Wohlfahrt des Menschen beiträgt. Dabei wird die individuelle Wohlfahrt näherungsweise über Befragungen zum subjektiven Wohlbefinden gemessen. Darauf aufbauend lässt sich empirisch untersuchen, inwiefern wirtschaftliche Bedingungen und institutionelle Faktoren das individuelle Wohlbefinden beeinflussen. Die Arbeit skizziert die Grundzüge des neuen Ansatzes und präsentiert zwei Anwendungen. Die erste nimmt die Grundidee eines relativen Nutzenkonzepts auf und illustriert sie anhand des Verhältnisses zwischen Einkommen und Glück. Die zweite stellt den Lebenszufriedenheitsansatz als ein neues Instrument vor, um die individuelle Wohlfahrt im Kontext der Kosten-Nutzen-Analyse zu untersuchen. Abschliessend wird der Frage nach einer das Glück maximierenden Politik nachgegangen.

Mit seiner Abkehr von der auf das Sozialprodukt fixierten «Religion der Statistik» wollte Nicolas Sarkozy die Vorzüge von Frankreich beweisen. Der Schuss ging nach hinten los.

This article reviews the economic literature on the economic and social costs of terrorism with a special emphasis on the consequences on the tourism industry. Several studies find a negative and economically important effect of terrorism on tourism demand. The studies also highlight dif-ferences in the consequences of different types of terror attacks, causality, the temporal patterns of the impact as well as interdependencies between different countries’ tourism industries and their terrorist campaigns. Further, the paper briefly discusses studies on the consequences on foreign direct investment, consumption, savings and investment, international trade, overall eco-nomic development and on subjective life satisfaction.

Watching television is a widespread activity that takes up a large amount of leisure time in many people’s lives. Television and other mass media play a leading role in transmitting information to voters and in shaping their political attitudes. This contrasts with the paucity of economic research on television consumption. This dissertation presents a comprehensive economic analysis of television consumption and empirically investigates the determinants of TV viewing and its effects on individual well-being and behavior. In Chapter 2, the theoretical foundation is laid out, and television consumption is integrated into a modern economic framework that goes beyond standard rational choice theory. Additionally, the determinants of TV consumption are investigated at individual as well as at institutional levels. Chapters 3 and 4 provide empirical investigations into the consequences of television consumption. The results reveal beneficial as well as unfavorable impacts of TV consumption. Chapter 3 provides evidence that some individuals, due to television’s immediate gratification at low immediate marginal costs, are induced to spend more time consuming TV than they would actually prefer, and their utility is thus reduced. Long hours of TV consumption are associated with lower life satisfaction. The negative effects are especially strong among people with high opportunity costs of time and in countries with a large number of TV channels. Chapter 4 conveys that television consumption also serves an important informational need, especially for people not attracted by more cognitively demanding media, such as newspapers. When local TV is available, people with low and intermediate education consume more news and increase participation in elections in Switzerland. The importance of television is furthermore established by its effects on election campaigns: when local TV is available, political parties react to its presence by putting up more candidates in the highly visible Council of States elections. Chapter 5 presents the conclusions. Zusammenfassung Fernsehkonsum ist eine weit verbreitete Aktivität, die einen Grossteil der Freizeit vieler Leute einnimmt. Fernsehen und andere Massenmedien spielen auch eine wichtige Rolle um Wähler zu informieren und ihre Meinungsbildung zu unterstützen. Dennoch gibt es bisher kaum ökonomische Forschung zu Fernsehkonsum. Diese Dissertation unternimmt eine umfassende ökonomische Analyse von Fernsehkonsum und untersucht empirisch seine Determinanten und seine Auswirkungen auf individuelles Verhalten und Wohlbefinden. Kapitel 2 legt das theoretische Fundament und integriert Fernsehkonsum in ein modernes ökonomisches Framework, das über die Standardtheorie und den Rationalansatz hinausgeht. Des Weiteren werden die Determinanten von Fernsehkonsum auf individueller und institutioneller Ebene untersucht. In Kapitel 3 und 4 werden die Auswirkungen von Fernsehkonsum empirisch analysiert. Die Resultate weisen sowohl nutzbringende als auch nachteilige Folgen nach. Kapitel 3 zeigt auf, dass der unmittelbare Konsumgenuss des Fernsehens bei gleichzeitig geringen marginalen Kosten einige Leute dazu verleitet, mehr Zeit vor dem Fernseher zu verbringen, als sie eigentlich möchten und deshalb ihr Nutzen verringert wird. Viel vor dem Fernseher verbrachte Zeit ist mit geringer Lebenszufriedenheit verbunden. Leute mit hohen Zeitopportunitätskosten und Leute in Ländern mit einer grossen Auswahl an Fernsehsendern sind vermehrt von diesen negativen Effekten betroffen. Kapitel 4 legt dar, dass Fernsehen auch eine wichtige Informationsfunktion wahrnimmt, und dies hauptsächlich für Personen, welche kognitiv anspruchsvollere Medien weniger attraktiv finden. Wenn in der Schweiz Zugang zu lokalen Fernsehsendern besteht, so schauen Leute mit niedrigerer und mittlerer Bildung öfter Nachrichten und nehmen vermehrt an Wahlen teil. Die Wichtigkeit des Fernsehens zeigt sich auch darin, dass die Politiker auf seine Präsenz reagieren und die Parteien mehr Ständeratskandidaten aufstellen wenn es lokale Fernsehsender gibt. Kapitel 5 legt die Schlussfolgerungen dar.

Awards are increasingly popular in the corporate sector to motivate employees. Managers consider innovative human resource practices, such as awards, to be essential to enhance firm competitiveness. The prevalence and popularity of awards in the corporate sector suggest that awards fulfill important functions in principal‐agent relationships. This is contrasted with the paucity of academic research targeted at recognition programs. This thesis provides an extensive discussion of awards and demonstrates their effect on employee performance. Chapters 2 and 3 lay the theoretical foundation for why awards may motivate and discuss their relationship with other incentive instruments. Additionally, some insights into practitioners' perceptions of the topic are presented. Chapters 4 to 6 provide the empirical evidence. The field experiment presented in chapter 4 shows that productivity in a data entry job is significantly higher in workgroups where the two best employees can get an award in addition to the fixed wage that is identical for all workgroups. Chapter 5 reports the results of an econometric study using data on awards and employee performance from the call center of a large international bank. It can be shown that the performance of award winners is significantly higher than that of nonrecipients one month after the award is handed out. Chapter 6 sheds some light into what award features drive this effect by reporting the results of a vignette study with researchers at a research laboratory. The findings suggest that the publicity associated with winning an award is a major motivation force that drives people to aspire an award. Finally, Chapter 7 concludes.

What can business do to cope more successfully with terrorism?” The policy against terrorism available to business is a neglected issue in the scholarly literature especially in so far as individual firms rather than the business sector as a whole are concerned. Two sets of proposals are advanced, based on an economic analysis of terrorism. The first set discusses possibilities to reduce terrorists’ incentives to attack business premises; the second part outlines proposals designed to minimize the costs to businesses once a terrorist attack has taken place, hence reducing the impact.

Wie verhalten sich Menschen in Extremsituationen? Am Untergang der «Titanic» zeigt sich: Selbst in der Katastrophe funktioniert der Mensch als soziales Wesen. Amerikaner überlebten überproportional oft.

The paper investigates the relationship between pro-social norms and its implications for improved environmental outcomes. This is an area, which has been neglected in the environmental economics literature. We provide empirical evidence to demonstrate a robust link between perceived environmental cooperation (reduced public littering) and increased voluntary environmental morale. For this purpose we use European Values Survey (EVS) data for 30 European countries. We also demonstrate that Western European countries are more sensitive to perceived environmental cooperation than the public in Eastern Europe. Interestingly, the results also demonstrate that environmental morale is strongly correlated with several socio-economic and environmental variables. Several robustness tests are conducted to check the validity of the results.

Scholars today are under increasing pressure to publish in A journals, the main role of which consists in certifying that a paper meets traditional academic standards. Consequences of this pressure are multiple authorship, the slicing of ideas, and incentives to deviate from the truth. The overburdened reviewers' evaluations are characterized by selfish efforts to protect their intel-lectual capital and to avoid risk. The behaviour of editors depends much on whether there are a large or small number of editors. The editors of Kyklos respond to these developments by welcoming innovative papers that go beyond standardized orthodoxy.

Das Tennis ist zur Aufschlagschlacht verkommen. Im Fussball dominieren ein paar wenige Starklubs. Um wieder mehr Spannung in den Sport zu bringen, braucht es neue Regeln.

Relative Einkommensunterschiede lösen innerhalb einer Referenzgruppe oftmals Neid aus. Damit wird das soziale Verhalten und die individuelle Leistungsbereitschaft beeinflusst. In der ökonomischen Forschung ist dennoch bislang der Zusammenhang zwischen relativen Einkommensunterschieden und individueller Leistung wenig untersucht worden. Ein wesentlicher Grund dafür ist sicherlich die schwierige Messbarkeit von „Leistung“. Unser Beitrag analysiert den Einfluss von relativen Einkommensunterschieden auf die Leistung von Fußballprofis der deutschen Bundesliga, weil deren Leistung erfolgreich erfasst wurde. Insgesamt werden 1040 Spieler über einen Zeitraum von 8 Spielzeiten zwischen 1995 und 2004 untersucht. Relative Einkommensunterschiede zwischen Mannschaftskollegen erweisen sich als entscheidender Einfluss auf die individuelle Leistung der Spieler. Eine Verschlechterung in der relativen Einkommensposition vermindert ceteris paribus die individuelle Leistungsbereitschaft. Eine höhere Einkommensungleichheit verstärkt solche positionalbedingten Externalitäten. Auch eine Veränderung der Teamkonstellation bewirkt signifikante Änderungen der individuellen Leistungen.

Economists traditionally focus on monetary compensation when examining incentives, but awards are of immense practical relevance as can be inferred from their prevalence in the form of state orders, decorations and prizes, according to Bruno Frey and Susanne Neckermann.

Awards play a large role in the economics profession, which is documented by the large varietynand number of awards. However, little scientific attention has been devoted to them. This paperndocuments the prevalence of awards in the economics profession and analyzes the number and type of awards received by the 1,200 leading economists included in Who’s Who in Economics. First steps towards integrating awards into economic theory are undertaken.

This paper analyzes awards as a means of motivation prevalent in the scientific community, but so far neglected in the economic literature on incentives, and discusses their relationship to monetary compensation. Awards are better suited than performance pay to reward scientific tasks, which are typically of a vague nature. They derive their value, for instance, from signaling research talent to outsiders. Awards should therefore be taken seriously as a means of motivating research that may complement, or even substitute for, monetary incentives. While we discuss awards in the context of academia, our conclusions apply to other principal-agent settings as well.

The analysis of the competitive environment – monopoly, oligopoly or many competitors –in which international organizations act, has been neglected in scholarly research. Both this external and the internal type of competition in international organizations are rather weak and performance is far from ideal. To strengthen both types of competition, several tentative proposals are advanced. They range from the introduction of an international competition agency, the use of prediction markets, matching contributions, to the employment of elements of direct democracy via randomly elected trustees. These proposals are put forward to stimulate discussion and to advance new ideas about the design of international organizations.

Non-monetary incentives in the form of awards have so far escaped the attention ofneconomists despite their widespread use. This paper presents an experiment conductednonline at IBM to assess the impact of these kinds of extrinsic incentives. Introducing a hypothetical award has statistically significant effects on stated contributions to a publicngood. Our design allows the estimation of the impact of different award characteristicsnrelated to, for example, how public or how valuable the award is. We illustrate thesenfindings by providing predictions about the behavior induced by a new award at IBM.