Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation
Edgar Vogel, Alexander Ludwig and Axel Börsch-Supan
University of Cologne, Working Paper Series in Economics No. 59, 2013
JEL codes: C68, E17, E25, J11, J24
Keywords: population aging, human capital, welfare, pension reform, retirement age, open economy
Projected demographic changes in industrialized and developing countries vary in extent and timing but will reduce the share of the population in working age everywhere. Conventional wisdom suggests that this will increase capital intensity with falling rates of return to capital and increasing wages. This decreases welfare for middle aged agents with assets accumulated for retirement. This paper addresses three important adjustments channels to dampen these detrimental effects of ageing: investing abroad, endogenous human capital formation and increasing the retirement age. Although non of these suggestions is new in itself, we examine their effects jointly in one coherent model. Our quantitative finding is that openness has a relatively mild effect. In contrast, endogenous human capital formation in combination with an increase in the retirement age has strong effects. Under these adjustments maximum welfare losses of demographic change for households alive in 2010 are reduced by about 3 percentage points.
Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation
On the role of endowment heterogeneity and ambiguity for conditional cooperation
Felix Ebeling
University of Cologne, Working Paper Series in Economics No. 58, 2013
JEL codes: C91, D63, H41
Keywords: public good, donation, conditional cooperation, social norms, ambiguity
Conditional cooperation (CC) is one of the most persistent behaviors in charitable giving. The laboratory experiment presented in this paper is designed to explore two questions: First, whether heterogeneous endowments of donors affect conditional cooperative giving. Second, whether potential donors exploit ambiguity about other donors’ endowments in a self-serving manner to justify lower giving. We find that heterogeneous endowments affect giving in a way that suggests individuals concern for equality of donors’ earnings after giving. Furthermore, the results do not confirm the exploitation of ambiguity about other donors’ endowments. Individuals do not bias beliefs about other donors’ endowments in a self-serving manner to justify lower giving.
On the role of endowment heterogeneity and ambiguity for conditional cooperation
Peer Pressure in Multi-Dimensional Work Tasks
Felix Ebeling, Gerlinde Fellner and Johannes Wahlig
University of Cologne, Working Paper Series in Economics No. 57, 2012
JEL codes: D03, D2, J21
Keywords: Peer Effects, Multi Tasking, Incentives, Laboratory Experiment
We study the influence of peer pressure in multi-dimensional work tasks theoretically and in a controlled laboratory experiment. Thereby, workers face peer pressure in only one work dimension. We find that effort provision increases in the dimension where peer pressure is introduced. However, not all of this increase translates into a productivity gain, since the effect is partly offset by a decrease of effort in the work dimension without peer pressure. Furthermore, this tradeoff is stronger for workers who run behind in the dimension of peer pressure. Finally, we analyze the optimal group composition to harness peer pressure. Effort in the dimension of peer pressure and overall productivity seem to be unaffected by group composition, but the effort reduction in the dimension that is not subject to peer pressure is stronger when workers’ skills are highly diverse. Hence, it seems like optimal group composition depends on work environment. While existing literature recommends maximizing worker-groups’ skill diversity in one-dimensional work tasks, our results suggest to mix similar workers in multi-dimensional tasks.
Peer Pressure in Multi-Dimensional Work Tasks
Are Efficiency Wages Equality Wages? Exogenously Induced Fairness Norms in Working Environments
On the Incidence of a Financial Transactions Tax in a Model of Fire Sales
Too Much Information Sharing? Welfare Effects of Sharing Acquired Cost Information in Oligopoly
Mechanism Design and Intentions
Beyond the Need to Boast: Cost Concealment Incentives and Exit in Cournot Oligopoly
Jos Jansen
University of Cologne, Working Paper Series in Economics No. 52, 2012
JEL codes: D82, L13
Keywords: Cournot oligopoly; information disclosure; exit; cost asymmetry; precommitment
This paper studies the incentives for production cost disclosure in an asymmetric Cournot oligopoly. Whereas the efficient firm (consumers) prefers information sharing (concealment) when the firms choose accommodating strategies in the product market, the firm (consumers) may prefer information concealment (sharing) when it can exclude its competitors from the market. Hence, the rankings of expected profit and consumer surplus can be reversed if exit of the inefficient firms is possible. Although the efficient firm has stronger incentives to share information when it shares strategically, there remain cases in which the firm conceals information in equilibrium to induce exit.
Beyond the Need to Boast: Cost Concealment Incentives and Exit in Cournot Oligopoly
'Hiding behind a small cake' in a newspaper dictator game
Axel Ockenfels, Peter Werner
University of Cologne, Working Paper Series in Economics No. 51, 2011
Keywords: dictator game; psychological games; incomplete information; newspaper experiment
We conduct an Internet dictator game experiment in collaboration with the popular German Sunday paper "Welt am Sonntag", employing a wider and more representative subject pool than standard laboratory experiments. Recipients either knew or did not know the size of the cake distributed by the dictator. We find that, in case of incomplete information, some dictators 'hide behind the small cake', supporting the notion that some agents' beliefs directly enter the social utility function.
'Hiding behind a small cake' in a newspaper dictator game
Tacit Lobbying Agreements: An Experimental Study
Jens Großer, Ernesto Reuben, Agnieszka Tymula
University of Cologne, Working Paper Series in Economics No. 50, 2010
JEL codes: D72, H10, K42
Keywords: lobbying; redistribution; elections; bargaining; collusion
We experimentally study the common wisdom that money buys political influence. In the game, one lobbyist has the opportunity to influence redistributive tax policies in her favor by transferring money to two competing candidates. The success of the lobbying investment depends on whether or not the candidates are willing to respond and able to collude on low-tax policies that do not harm their relative chances in the elections. In the experiment, we find that lobbying is never successful when the lobbyist and candidates interact just once. By contrast, it yields substantially lower redistribution in about 40% of societies with finitely-repeated encounters. However, lobbying investments are not always profitable, and profit-sharing between the lobbyist and candidates depends on prominent equity norms. Our experimental results shed new light on the complex process of buying political influence in everyday politics and help explain why only relatively few corporate firms do actually lobby.
Tacit Lobbying Agreements: An Experimental Study