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

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Ein Weltstaat ist nicht nur eine schwer zu erreichende Utopie, sondern wegen seiner extremen Monopolmacht gegenüber den Individuen, der Ineffizienz und der Verteilungsungerechtigkeit auch unerwünscht. Ebenso ist eine Anarchie einer globalen Wirtschaft und Gesellschaft ohne Staatsinterventionen völlig unrealistisch und weist ernst zu nehmende Mängel auf. Eine zukünftige Weltordnung muss flexibel sein, damit den noch unbekannten Herausforderungen erfolgreich begegnet werden kann. Hier werden zwei Utopien vorgeschlagen, die ein hohes Mass an Flexibilität sichern und damit den Anforderungen einer «Global Governance» der Zukunft entsprechen.

Which schools of thought are favored by German economists? What makes a good economist and which economists have been most influential? These questions were addressed in a survey, conducted in the summer of 2006 among the members of the 'Verein fr Socialpolitik'. An econometric analysis is used to identify to what extent ideological preferences or personal factors determine the respondents' answers. Our results suggest that German economists favor neoclassical economic theory as a school of thought and appreciate the contributions of their Anglo-Saxon colleagues much more than their fellow compatriots' contributions. Furthermore, a 'good' economist should have expertise in a certain field, as well as a broader knowledge of general economics. Some of the results can be compared to Colander (2008). The results indicate that graduate programs noted for their American style greatly influence a student's opinion as to what attributes a good economist must have.

In many countries environmental policies and regulations are implemented to improve environmental quality and thus individuals’ well-being. However, how do individuals value the environment? In this paper, we review the Life Satisfaction Approach (LSA) representing a new non-market valuation technique. The LSA builds on the recent development of subjective well-being research in economics and takes measures of reported life satisfaction as an empirical approximation to individual welfare. Micro-econometric life satisfaction functions are estimated taking into account environmental conditions along with income and other covariates. The estimated coefficients for the environmental good and income can then be used to calculate the implicit willingness-to-pay for the environmental good.

Purpose: The governance structure of monasteries is analyzed to gain new insights and apply them to solve agency problems of modern corporations. In a historic analysis of crises and closures we ask, if Benedictine monasteries were and are capable of solving agency problems. The analysis shows that monasteries established basic governance instruments very early and therefore were able to survive for centuries. Design/methodology/approach: We use a dataset of all Benedictine abbeys that ever existed in Bavaria, Baden-Württemberg and German-speaking Switzerland to determine their lifespan and the reasons for closures. The governance mechanisms are analyzed in detail. Finally, we draw conclusions relevant to the modern corporation. The theoretical foundations are based upon principal agency theory, psychological economics, as well as embeddedness theory. Findings: The monasteries that were examined show an average lifetime of almost 500 years and only a quarter of them dissolved as a result of agency problems. We argue that this success is due to an appropriate governance structure that relies strongly on internal control mechanisms. Research limitations/implications: Benedictine monasteries and stock corporations differ fundamentally regarding their goals. Additional limitations of the monastic approach are the tendency to promote groupthink, the danger of dictatorship and the life long commitment. Practical implications: The paper adds new insights into the corporate governance debate designed to solve current agency problems and facilitate better control. Originality/value: By analyzing monasteries, a new approach is offered to understand the efficiency of internal behavioral incentives and their combination with external control mechanisms in corporate governance.

In many countries, TV viewers have access to more and more TV channels. We study whether people can cope with this and watch the amount of TV they find optimal for themselves, or whether they are prone to over-consumption. We find that heavy TV viewers do not benefit, but instead report lower life satisfaction with access to more TV channels. This finding runs counter to the standard economic prediction that a larger choice set does not make people worse off. It suggests that an identifiable group of persons experience a self-control problem when it comes to TV viewing.

Posner`s (2010) analysis offers many exciting insights into the principal-agent problem, particularly with respect to the secret service. I argue that it would be useful to consider a broader model of human behaviour, which includes awards as extrinsic incentives beyond pay, as well as intrinsic motivation. A more comparative stance that goes beyond the United States would be a useful check of how general the results are. Scholars should not forget that while the US is the dominant economy today, there are 195 nations in the world that offer many fascinating institutional variations, which are useful to take into account.

Over the last decades, empirical research on subjective well-being in the social sciences has provided a major new stimulation of the discourse on individual happiness. Recently this research has also been linked to economics where reported subjective wellbeing is often taken as a proxy measure for individual welfare. In our review, we intend to provide an evaluation of where the economic research on happiness stands and of three directions it might develop. First, it offers new ways for testing the basic assumptions of the economic approach and for going about a new understanding of utility. Second, it provides a new possibility for the complementary testing of theories across fields in economics. Third, we inquire how the insights gained from the study of individual happiness in economics affect public policy.

The object of our study is a better understanding of the difference between cultural value and economic value, and of the process through which a change in the cultural value of an item changes the economic valuation of that item. Cette contribution analyse la dynamique relative de la valeur artistique ou culturelle et de la valeur économique des œuvres d’art, notamment la manière dont l’évolution de la valeur culturelle d’une œuvre influence ou non dans le temps sa valeur économique. Dans certains domaines, la valeur culturelle est relativement ignorée par les économistes parce qu’elle ne semble guère influencer les prix de vente correspondants. Mais de manière générale, il existe des raisons pour considérer que ces deux types de valeur évoluent de manière liée. Pour cela l’histoire économique de trois tableaux célèbres est examinée, ce qui montre le rôle important de l’évolution de la valeur culturelle pour expliquer celui de la valeur culturelle. La « Vierge des roses » de Raphaël montre comment l’augmentation de la valeur culturelle a ici entrainé l’augmentation de sa valeur économique. « L’homme au casque d’or » de Rembrandt témoigne de l’évolution inverse. Enfin, « Numéro 12, 1949 » de Jason Pollock illustre leur codétermination progressive. De tels exemples doivent être considérés comme une première analyse empirique d’un nouveau territoire scientifique.

This paper explores what determines the survival of people in a life-and-death situation. The sinking of the Titanic allows us to inquire whether pro-social behavior matters in such extreme situations. This event can be considered a quasi-natural experiment. The empirical results suggest that social norms such as ‘women and children first’ persevered during such an event. Women of reproductive age and crew members had a higher probability of survival. Passenger class, fitness, group size, and cultural background also mattered.

In einer repräsentativen Umfrage bezeichnet sich gut die Hälfte der befragten Schweizer und Schweizerinnen als glücklich und mehr als ein Drittel sogar als sehr glücklich. Befragte in Deutschland oder den USA geben ein vergleichsweise tieferes Glücks- beziehungsweise Lebenszufriedenheitsniveau an. Wovon hängt aber unser Glück ab?

Lin Ostrom’s work constitutes a great step forward in the analysis of social governance. Instead of focusing on the technical characteristics of goods she studies what types of institutions have emerged and how they affect individual motivation and behavior in public goods and commons situations. Her approach represents a careful analysis of institutions often emerging from below. Unorthodox impacts of institutions on individual motivation and behavior as well as the possible creation of new institutions must be taken into account. The constitution must ensure that the involved individuals can establish adequate institutions regardless of possible opposition by politicians and bureaucrats.

Measuring individual welfare using data on reported subjective well-being has made great progress. It offers a new way of confronting public choice hypotheses with field data, e.g. with respect to partisan preferences on unemployment and inflation or rents in the public bureaucracy. Insights from public choice also help to assess the role of happiness measures in public policy. We emphasize that maximizing aggregate happiness as a social welfare function neglects incentive problems and political institutions while citizens are reduced to metric stations. The goal of happiness research should be to improve the nature of the processes through which individuals can express their preferences.

Wie glücklich Menschen sich fühlen, wird mit Hilfe von repräsentativen Umfragen erfasst. Wichtigste Determinanten sind gute Gesundheit und soziale Beziehungen. Personen mit höherem Einkommen fühlen sich glücklicher. Allerdings führt eine Einkommenssteigerung nur vor- übergehend zu mehr Lebenszufriedenheit; Menschen gewöhnen sich an ein höheres Einkommen und vergleichen sich mit besser gestellten Personen. In Demokratien sind die Menschen glücklicher. Die Regierung muss die Voraussetzungen um glücklich zu sein schaffen, nicht jedoch die Menschen zu ihrem Glück zwingen.

Economics is undergoing a remarkable new development, which may even be called revolutionary. This development is likely to change economics substantially in the future. New insights from happiness research are slowly being accepted in standard economics, a field which is traditionally conservative. If the goal of most human beings is to be happy, then a fuller understanding of which factors contribute to well-being is critical, especially if recent findings on what determines happiness are at variance with standard economic theories. Happiness research is even more important in helping to determine which institutional forms best enable individuals to increase their life satisfaction.

This survey intends to portray the two main approaches of economic research on religion. The first investigates the impact of religion on the economy. Religion and the internalized value system are found to influence economic attitudes output in a favorable way. The second approach is to explain religious behavior with economic models showing how an individual can derive utility from religion. Modern happiness research makes it possible to measure the impact of religion on subjective well-being empirically. The literature finds a positive correlation of religion and happiness, with a robust effect of churchgoing and protestant confession, while the results on internal religiosity are more ambiguous. In our analyses for Switzerland we are able to confirm these results and show that the effect of church going on happiness is quite sizeable.