Josef Zweimüller, Rudolf Winter-Ebmer, Firm-Specific Training: Consequences for Job Mobility, In: Working paper series / Institute for Empirical Research in Economics, No. No. 37, 2000. (Working Paper)
This paper analyzes the impact of formal training on worker mobility. Using data from the Swiss Labor Force Survey, we find that on-the-job search activities and, to a smaller extent, actual job separations are significantly affected by both employer-provided and general training. Moreover, while the separation probability of searching workers is strongly affected by previous firm-provided training, no such effect shows up for non-searchers. This is consistent with the hypothesis that workers bear most of the cost of specific training. |
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Bruno Frey, Does Economics have an Effect? Towards an Economics of Economics, In: Working paper series / Institute for Empirical Research in Economics, No. No. 36, 2000. (Working Paper)
"Due to its formality and highly analytic thinking, economics is often attributed a leading role among the social sciences and a prominent position as contributor to economic or social issues in the real world. Fact is, however, that the empirical proof for such a claim is either missing or anecdotal. This paper aims to outline the economics of economics. It surveys and compares approaches of impact measurement such as a production function of economics or the demand and supply of trained economists and discusses the determinants of the strength of the influence of economics. It furthermore discriminates between the impact of economic ideas versus that of economists as scientists or politicians." |
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Marc Oliver Bettzüge, Thorsten Hens, Financial innovation, communication and the theory of the firm, In: Working paper series / Institute for Empirical Research in Economics, No. No. 32, 2014. (Working Paper)
When markets are incomplete, the competitive equilibria considered so far are not constrained Pareto–efficient, production efficiency breaks down and shareholders no longer agree on the objective function of the firm. We first show by way of an example that these inefficiencies can result from the double role of firms in incomplete markets: providing high market value and providing good hedging opportunities (spanning role). To disentangle these two conflicting roles of the firm’s decision, we then suggest to let the firm choose a relevant financial policy by issuing securities being collaterized by the production plan. In order to guarantee that the firm does not choose to innovate trivial assets, it is then shown to be crucial that the firm‘s shareholders agree on the same set of state prices. Therefore we introduce some communication network into the model which allows the shareholders to exchange their views on the firm’s best policies. In our main result we demonstrate that competitive equilibria with communication of shareholders and a relevant financial policy of the firm are Pareto–efficient, provided there are at least as many firms as there are shareholders. |
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Josef Zweimüller, Inequality, Redistribution, and Economic Growth, In: Working paper series / Institute for Empirical Research in Economics, No. No. 31, 2000. (Working Paper)
This paper provides a critical review of the recent literature on inequality and growth. After discussing historical and more recent distributional trends as well as empirical evidence on the relationship between inequality and growth, I focus on recent explanations of the inequality-growth puzzle. I consider both the impact of the functional and the personal distribution on long-run growth rates. A final section discusses a rather neglected issue in the recent literature: the impact of expected demand for innovation decisions. |
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Klaus Reiner Schenk-Hoppé, Is there a Golden Rule for the Stochastic Solow Growth Model?, In: Working paper series / Institute for Empirical Research in Economics, No. No. 33, 2000. (Working Paper)
This paper analyzes the dependence of average consumption on the saving rate in a one-sector neoclassical Solow growth model with production shocks and stochastic rates of population growth and depreciation where arbitrary ergodic processes are considered. The long-run behavior of the stochastic capital intensity and hence average consumption is uniquely determined by a random fixed point which depends continuously on the saving rate. We prove existence of a golden rule saving rate maximizing average consumption per capita. A dynamic inefficiency result is given to ascertain the importance of the golden rule for the stochastic Solow model. The cases of Cobb-Douglas and CES production function are analyzed numerically, revealing that shocks to either parameter can lead to higher average consumption at the golden rule saving rate. |
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Jens-Ulrich Peter, Klaus Reiner Schenk-Hoppé, Business Cycle Phenomena in Overlapping Generations Economies with Stochastic Production, In: Working paper series / Institute for Empirical Research in Economics, No. No. 30, 1999. (Working Paper)
This paper analyzes economic fluctuations in an overlapping generations economy with productive capital in which random shocks in aggregate productivity are present. Under specific assumptions we obtain an explicit solution of the model. Applying random dynamical systems theory, we can prove that the long-run behavior of the economy is uniquely described by an asymptotically stable random fixed point. The statistical properties of the aggregates output, consumption, capital stock, and real wage are investigated numerically. We find that our artificial economy displays several real world business cycle phenomena.nn |
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Reto Schleiniger, Ecological Tax Reform with Exemptions for the Export Sector in a two Sector two Factor Model, In: Working paper series / Institute for Empirical Research in Economics, No. No. 29, 1999. (Working Paper)
This present paper analyzes an energy tax reform that exempts the energy-intensive export sector from paying the energy tax and uses the additional revenue to cut existing taxes in all sectors. To that end, a two sector two factor model of an open economy that is small on the import side but not on the export side is applied. Within this model, an equivalence between a tax reform with and without exemption of the export sector is derived. The equivalence occurs because in both tax schemes the tax burden is shifted through an increasing producer price of labor from the domestic to the foreign household. |
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Bruno Frey, Marcel Kucher, Managerial Power and Compensation, In: Working paper series / Institute for Empirical Research in Economics, No. No. 28, 1999. (Working Paper)
According to the widely used Managerial Power Model, a higher hierarchical position with associated higher power leads to higher compensation. In contrast, the Compensating Wage Differentials Model argues that there is a non-positive relationship between positional power and total compensation. Both power and income yield utility and in equilibrium managers are prepared to trade-off the two elements. The two opposing propositions are tested using a large survey data set from Switzerland. The results suggest that power positions do not yield higher compensation. Rather, there is a non-positive relationship between power position and compensation, if one takes into account all relevant factors influencing total compensation. |
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Margit Osterloh, Bruno Frey, Motivation, Knowledge Transfer, and Organizational Forms, In: Working paper series / Institute for Empirical Research in Economics, No. No. 27, 1999. (Working Paper)
"Employees are motivated intrinsically as well as extrinsically. Intrinsic motivation is crucial when tacit knowledge in and between teams must be transferred. Organizational forms enable different kinds of motivation and have different capacities to generate and transfer tacit knowledge. Since knowledge generation and transfer are essential for a firms sustainable competitive advantage, we ask specifically what kinds of motivation are needed to generate and transfer tacit knowledge, as opposed to explicit knowledge." |
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Bruno Frey, Marcel Kucher, Alois Stutzer, Outcome, Process & Power in Direct Democracy, In: Working paper series / Institute for Empirical Research in Economics, No. No. 25, 1999. (Working Paper)
Based on survey data for Switzerland, new empirical findings on direct democracy are presented. In the first part, we show that, on average, public employees receive lower financial compensation under more direct democratic institutions. However, top bureaucrats are more constrained in direct democracies and have to be compensated by higher wages for that loss of power. In the second part, we demonstrate that reported subjective well-being of the population is much higher in jurisdictions with stronger direct democratic rights. This is not only the case because people value political outcomes higher but they derive utility from the political process itself. |
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Alois Stutzer, Demokratieindizes für die Kantone der Schweiz, In: Working paper series / Institute for Empirical Research in Economics, No. No. 23, 1999. (Working Paper)
Die direkte Demokratie ist in den Kantonen der Schweiz unterschiedlich stark ausgeprägt. Die Beteiligung der Bürger im politischen Prozess via Verfassungs- und Gesetzesinitiative, Gesetzesreferendum und Finanzreferendum ist durch verschieden hohe Hürden eingeschränkt. Unterschiede bestehen beispielsweise bei der Anzahl Unterschriften, die verlangt werden, um ein Instrument zu ergreifen, der Zeit, welche für die Sammlung der Unterschriften zur Verfügung steht, oder der Ausgabenhöhe, ab welcher ein Finanzreferendum möglich ist. Diese Unterschiede werden verwendet, um Indizes für die direktdemokratischen Beteiligungsmöglichkeiten der Bürger zu berechnen. Die Indizes öffnen ein weites Feld für die institutionell vergleichende Forschung in der Schweiz. |
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Susan Athey, Armin Schmutzler, Innovation and the Emergence of Market Dominance, In: Working paper series / Socioeconomic Institute, No. No. 9906, 1999. (Working Paper)
This paper analyzes a model of oligopolistic competition with ongoing investment. It incorporates the following models as special cases: incremental investment, patent races, learning-by-doing, and network externalities. We investigate circumstances under which a firm with low costs or high quality will extend its initial lead through further cost-reducing or quality-improving investments. In many commonly-studied oligopoly games, such investments are strategic substitutes. We derive a new comparative statics result that applies to games with strategic substitutes, and we use the result to derive conditions under which leading firms invest more than lagging firms. We show that the conditions are satisfied in a variety of commonly-studied oligopoly models. We also highlight plausible countervailing effects from two distinct sources. First, leading firms may find it more costly than others to achieve the same increment to their state. This force is particularly salient inmany models of patentn races, where firms make research investments in an attempt to find a new technology that delivers a given level of cost or quality. Second, countervailing effects may arise in dynamic games with more than two firms are sufficiently patient. |
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Bruno Frey, Alois Stutzer, Maximising Happiness?, In: Working paper series / Institute for Empirical Research in Economics, No. No. 22, 1999. (Working Paper)
"The measurement of individual happiness challenges the notion that revealed preferences only reliably reflect individual utility. Reported subjective well-being is a broader concept than traditional decision utility; it also includes concepts like experience and procedural utility. Micro- and macroeconometric happiness functions offer new insights on determinants of life satisfaction. However, one should not leap to the conclusion that happiness should be maximized in the sense of social welfare function maximization. In contrast, happiness research strengthens the validity of an institutional approach such as reflected in the theory of democratic economic policy." |
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Andreas Polk, Multilaterale Abkommen für Direktinvestitionen - Lernen aus dem MAI?, In: Working paper series / Socioeconomic Institute, No. No. 9905, 1999. (Working Paper)
Die Verhandlungen innerhalb der OECD zu einem multilateralen Abkommen ueber Investitionen (MAI) sind gescheitert. Damit werden Direktinvestitionen gegenwaertig weiterhin durch bilaterale Vertraege und durch einige wenige multilaterale Abkommen geregelt. In Zukunft ist jedoch weiterhin damit zu rechnen, daß diese durch ein allgemeines Rahmenwerk nach Vorlage des MAI ersetzt werden. Der vorliegende Aufsatz erlaeutert zunaechst die bestehenden multilateralen Rahmenbedingungen der WTO und der OECD. Anschließend werden die wesentlichen Inhalte des Vertragsentwurfs zum MAI vorgestellt und aus oekonomischer Sicht diskutiert. Ich komme zu der Einschaetzung, daß in einem zukuenftigen Investitionsabkommen (i) wettbewerbspolitische Inhalte, (ii) Ausnahmeregeln in bezug auf wenig industrialisierte Laender und (iii) ein differenzierter Investitionsbegriff enthalten sein sollten. Als Forum fuer ein multilaterales Investitionsabkommen bietet sich die WTO an. |
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Bruno Frey, Was bewirkt die Volkswirtschaftslehre?, In: Working paper series / Institute for Empirical Research in Economics, No. No. 24, 1999. (Working Paper)
"Due to its formality and highly analytic thinking, economics is often attributed a leading role among the social sciences and a prominent position as contributor to economic or social issues in the real world. Fact is, however, that the empirical proof for such a claim is either missing or anecdotal. This paper aims to outline the ""economics of economics. It surveys and compares approaches of impact measurement such as a production function of economics or the demand and supply of trained economists. It furthermore discriminates between the impact of economicnideas versus that of economists as scientists or politicians." |
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Ernst Fehr, Klaus M Schmidt, Fairness, Incentives, and Contractual Choices, In: Working paper series / Institute for Empirical Research in Economics, No. No. 20, 1999. (Working Paper)
This paper examines how the presence of a non-negligible fraction of reciprocally fair actors changes the provision of incentives through contracts. We provide experimental evidence that principals have a strong preference for less complete contracts although the standard self-interest model predicts that they should prefer the more complete contract. Our theoretical analysis shows that fairness concerns can explain this preference for less completeness. Fair principals keep their promises which provides strong pecuniary incentives through an incomplete contract. Selfish principals free-ride and exploit the agents. Counter-intuitively, selfish agents are induced to work by an incomplete contract while fair agents shirk. |
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Urs Fischbacher, z-Tree - Zurich Toolbox for Readymade Economic Experiments - Experimenter's Manual, In: Working paper series / Institute for Empirical Research in Economics, No. No. 21, 1999. (Working Paper)
"This manual explains the use of z-Tree, the ""Zurich Toolbox for Readymade Economic Experiments"". No programming knowledge is necessary to use z-Tree. This software allows to program and to conduct a wide range of experiments. This includes simultaneous and sequential games as well as market experiments and posted offer markets or double auctions. Because many features needed in an experimental software are built into z-Tree (as data saving, time and period display, profit calculation, group matching, provisions in case of losses and bankruptcy), new experiments can be developed quickly and easily." |
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Armin Falk, Ernst Fehr, Urs Fischbacher, On the Nature of Fair Behavior, In: Working paper series / Institute for Empirical Research in Economics, No. No. 17, 1999. (Working Paper)
"This paper shows that identical offers in an ultimatum game generate systematically different rejection rates depending on the other offers that are available to the proposer. This result casts doubt on the consequentialist practice in economics to define the utility of an action solely in terms of the consequences of the action irrespective of the set of alternatives. It means, in particular, that negatively reciprocal behavior cannot be fully captured by equity models that are exclusively based on preferences over the distribution of material payoffs. Models that take into account players fairness intentions and distributional preferences are consistent with our data while models that focus exclusively on intentions or on the distribution of material payoffs are not." |
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Bruno Frey, Art Fakes - What Fakes? An Economic View, In: Working paper series / Institute for Empirical Research in Economics, No. No. 14, 1999. (Working Paper)
"An economic analysis of fakes differs substantially from the legal and the art historic views which both tend to propose repressive policies against imitations. But there are large economic benefits from copying. In particular, the ""propagation effect"" yields utility to both consumers and creators of the original. In contrast, the harmful effects of fakes are small and are mitigated by emerging institutions (guarantees, sellers with reputation). The paper suggests ""art quotations"" (similar to academic quotations) as a beneficial solution to creators of originals and consumers. ""Art quotations"" are applicable to many art forms." |
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Stefan Felder, Reto Schleiniger, Environmental Tax Reform: Efficiency and Political Feasibility, In: Working paper series / Institute for Empirical Research in Economics, No. No. 13, 1999. (Working Paper)
Command-and-control measures, despite their inefficiencies, are still the standard in environmental policy. This might be due to the fact that command-and-control instruments prevent monetary redistribution between sectors and households and leave property rights on remaining pollution with the emittents. The present paper interprets the no-redistribution policy as a political constraint and investigates on more efficient alternatives to command-and-control, using a computable general equilibrium model for Switzerland. Simulation results render schemes that refund environmental tax revenues by a sector-by-sector-subsidy on labor or output as welfare enhancing. |
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