learning about a new technology pineapple in ghana this paper investigates the role of social learning in the diffusion of a new agri cultural technology in ghana we use unique data on farmers communication patterns to define each individual s information neighborhood conditional on many potentially confounding variables we find evidence that farmers adjust their inputs to align with those of their information neighbors who were surpris ingly successful in previous periods the relationship of these input adjustments to experience further indicates the presence of social learning in addition applying the same method to input choices for another crop of known technol ogy correctly indicates an absence of social learning effects jel d83 013 033 q16

understanding cultural persistence and change when does culture persist and when does it change we examine a determinant that has been put forth in the anthropology literature the variability of the environment from one generation to the next a prediction which emerges from a class of existing models from evolutionary anthropology is that following the customs of the previous generation is relatively more beneficial in stable environments where the culture that has evolved up to the previous generation is more likely to be relevant for the subsequent generation we test this hypothesis by measuring the variability of average temperature across 20 year generations from 500 1900 looking across countries ethnic groups and the descendants of immigrants we find that populations with ancestors who lived in environments with more stability from one generation to the next place a greater importance in maintaining tradition today these populations also exhibit more persistence in their traditions over time

multistage capital budgeting with delayed consumption of slack capital budgeting frequently involves multiple stages at which firms can continue or abandon ongoing projects in this paper we study a project requiring two stages of investment failure to fund stage 1 of the investment precludes investment in stage 2 whereas failure to fund stage 2 results in early termination in contrast to the existing literature we assume that the firm can limit the manager s informational rents with the early termination of the project in this setting we find that the firm optimally commits to a capital allocation scheme whereby it forgoes positive net present value npv projects at stage 1 capital rationing whereas at stage 2 depending on the manager s previous report it sometimes implements projects with a negative continuation npv but in other situations forgoes implementing projects with positive continuation npvs this paper was accepted by mary barth accounting

printing and protestants an empirical test of the role of printing in the reformation the causes of the protestant reformation have long been debated this paper seeks to revive and econometrically test the theory that the spread of the reformation is linked to the spread of the printing press i test this theory by analyzing data on the spread of the press and the reformation at the city level an econometric analysis that instruments for omitted variable bias with a city s distance from mainz the birthplace of printing suggests that cities with at least one printing press by 1500 were at minimum 29 percentage points more likely to be protestant by 1600

religion and work micro evidence from contemporary germany abstract using micro data from contemporary germany this paper studies the connection between protestantism and modern day labor market outcomes to address the endogeneity in self declared religion i exploit a provision in a sixteenth century peace treaty which determined the geographic distribution of catholics and protestants reduced form and instrumental variable estimates provide no evidence of an effect of protestantism on hourly wages however relative to their catholic counterparts protestants do appear to work longer hours the patterns in the data are difficult to reconcile with explanations based on institutional factors or religious differences in human capital acquisition religious differences in individuals values however can account for most of the estimated effects

contract based motivation for keeping records of a manager s reporting and budgeting history this paper analyzes the role of the agent s bankruptcy constraints in multiperiod principal agent models with asymmetric information conditions are provided under which commitment to a long term contract involving n rounds of investment improves upon repetition of n identical single period contracts further when the agent s reservation wage is sufficiently low the optimal contract is always long term keeping records of a manager s history of reporting activity facilitates contracting since optimal contracts may require a link between past reports and future investments over a duration of two or more periods

adopting a new religion the case of protestantism in 16th century germany using a dataset of territories and cities of the holy roman empire in the sixteenth century this article investigates the determinants of adoption and diffusion of protestantism as a state religion a territory s distance to wittenberg the city where martin luther taught is a major determinant of adoption this finding is consistent with a theory of strategic neighbourhood interactions introducing the reformation was a risky enterprise for territorial lords and had higher prospects of success if powerful neighbouring states committed to the new faith the actual spatial and temporal patterns of expansion of protestantism are analysed in a panel dataset

an economic analysis of the protestant reformation this paper seeks to explain the initial successes and failures of protestantism on economic grounds it argues that the medieval roman catholic church through doctrinal manipulation the exclusion of rivals and various forms of price discrimination ultimately placed members seeking the z good spiritual services on the margin of defection these monopolistic practices encouraged entry by rival firms some of which were aligned with civil governments the paper hypothesizes that protestant entry was facilitated in emergent entrepreneurial societies characterized by the decline of feudalism and relatively unstable distribution of wealth and repressed in more homogeneous rent seeking societies that were mostly dissipating rather than creating wealth in these societies the roman church was more able to continue the practice of price discrimination informal tests of this proposition are conducted by considering primogeniture and urban growth as proxies for wealth stability

religious competition and reallocation using novel microdata we document an important unintended consequence of the protestant reformation a reallocation of resources from religious to secular purposes to understand this process we propose a conceptual framework in which the introduction of religious competition shifts political markets where religious authorities provide legitimacy to rulers in exchange for control over resources consistent with our framework religious competition changed the balance of power between secular and religious elites secular authorities acquired enormous amounts of wealth from monasteries closed during the reformation particularly in protestant regions this transfer of resources had significant consequences first it shifted the allocation of upper tail human capital graduates of protestant universities increasingly took secular especially administrative occupations protestant university students increasingly studied secular subjects especially degrees that prepared students for public sector jobs rather than church sector specific theology second it affected the sectoral composition of fixed investment particularly in protestant regions new construction shifted from religious toward secular purposes especially the building of palaces and administrative buildings which reflected the increased wealth and power of secular lords reallocation was not driven by preexisting economic or cultural differences our findings indicate that the reformation played an important causal role in the secularization of the west

the protestant fiscal ethic religious confession and euro skepticism in germany during the european sovereign debt crisis most countries that ran into fiscal trouble had catholic majorities whereas countries with protestant majorities were able to avoid fiscal problems we find that christian conservative members of the german parliament from constituencies with higher shares of protestants were more likely to vote against a third bailout for greece survey data show that views on the euro differ between german protestants and non protestants at the individual level too among protestants concerns about the euro have compared to non protestants increased during the crisis we show that this increase in concern is linked to a reduction of protestants subjective well being we use the timing of survey interviews and news events in 2011 to account for the endogeneity of euro concerns emphasis on moral hazard concerns in protestant theology may thus still shape economic preferences jel d72 e00 i31 z12

people s opium religion and economic attitudes since max weber there has been an active debate on the impact of religion on people s economic attitudes much of the existing evidence however is based on cross country studies in which this impact is confounded by differences in other institutional factors we use the worldvalues surveys to id entify the relationship between intensity of religious beliefs and economic attitudes controlling for country fixed effects we study several economic attitudes towardcooperation the government working women legal rules thriftiness andthe market economy we also distinguish across religious denominations differentiating on whether a religion is dominant in a country we find that on average religious beliefs are associated with good economic attitudes where good is defined as conducive to higher per capita income andgrowth yet religious people tendto be more racist andless favorable with respect to working women these effects differ across religious denominations overall we find that christian religions are more positively associatedwith attitudes conducive to economic growth r 2003 elsevier science b v all rights reserved jel classification a1 e0 n4 z1

learning by doing and learning from others human capital and technical change in agriculture household level panel data from a nationally representative sample of rural indian households describing the adoption and profitability of high yielding seed varieties hyvs associated with the green revolution are used to test the implications of a model incorporating learning by doing and learning spillovers the estimates indicate that i imperfect knowledge about the management of the new seeds was a significant barrier to adoption ii this barrier diminished as farmer experience with the new technologies increased iii own experience and neighbors experience with hyvs significantly increased hyv profitability and iv farmers do not fully incorporate the village returns to learning in making adoption decisions

public goods institutions human capital and growth evidence from german history what are the origins and consequences of the state as a provider of public goods we study public goods provision established through new laws in german cities during the 1500s cities that adopted the laws subsequently began to differentially produce and attract human capital and to grow faster legal change occurred where ideological competition introduced by the protestant reformation interacted with local politics we study plagues that shifted local politics in a narrow period as sources of exogenous variation in public goods institutions and find support for a causal interpretation of the relationship between legal change human capital and growth

escalation errors and the sunk cost effect an explanation based on reputation and information asymmetries this paper is concerned with explaining a paradox of human behavior consider the following example a department manager makes a large investment in new production equipment and soon after learns of different equipment that could perform the same operations at lower cost incremental analysis favors switching but the manager refuses saying he does not want to waste the investment already made such real world examples have been extensively documented and studied by social scientists see thaler 1980 and staw 1981 in these examples the decision maker having commited to a course of action subsequently discovers new information that indicates that continuing the earlier commitment would likely result in worse consequences than switching in spite of this he clings to and even escalates his earlier

the cost of transmission for wind energy in the united states a review of transmission planning studies disclaimer this document was prepared as an account of work sponsored by the united states government while this document is believed to contain correct information neither the united states government nor any agency thereof nor the regents of the university of california nor any of their employees makes any warranty express or implied or assumes any legal responsibility for the accuracy completeness or usefulness of any information apparatus product or process disclosed or represents that its use would not infringe privately owned rights reference herein to any specific commercial product process or service by its trade name trademark manufacturer or otherwise does not necessarily constitute or imply its endorsement recommendation or favoring by the united states government or any agency thereof or the regents of the university of california the views and opinions of authors expressed herein do not necessarily state or reflect those of the united states government or any agency thereof or the regents of the university of california ernest orlando lawrence berkeley national laboratory is an equal opportunity employer

in search of the holy grail policy convergence experimentation and economic performance we consider a model of policy choice in which appropriate policies depend on a country s own circumstances but the presence of a successful leader generates an informational externality and results in too little policy experimentation corrupt governments are reined in while honest governments are disciplined inefficiently our model yields distinct predictions about the patterns of policy imitation corruption and economic performance as a function of a country s location vis aa vis successful leaders in particular it predicts a u shaped pattern in economic performance as we move away from the leader in the relevant space of characteristics close neighbors should do very well distant countries moderately well on average with considerable variance and intermediate countries worst of all an empirical test with the experience of post socialist countries provides supportive results

the economic effects of the protestant reformation testing the weber hypothesis in the german lands following max weber many theories have hypothesized that protestantism should have favored economic development with its religious heterogeneity the holy roman empire presents an ideal testing ground for this hypothesis using population figures of 272 cities in the years 1300 1900 i find no effects of protestantism on economic growth the finding is precisely estimated robust to the inclusion of various controls and does not depend on data selection or small sample size denominational differences in fertility behavior and literacy are unlikely to be major confounding factors protestantism has no effect when interacted with other likely determinants of economic development instrumental variables estimates considering the potential endogeneity of religious choice are similar to the ols results

the role of information asymmetry in escalation phenomena empirical evidence abstract economic rationality dictates that only incremental costs and benefits should affect decisions observed behavior often seems to violate this principle resulting in unwarranted commitment to past choices and their escalation in this paper we present experimental results that show that information asymmetry plays a key role in determining when such escalation behavior occurs this finding opens new avenues for mitigating escalation behavior since information asymmetry is an environmental feature that can be modified by organization design and explicit economic rewards

electricity transmission tariffs for large scale wind power consumption in western gansu province china abstract large scale wind power transmission presents the power system with several challenges the determination of the transmission tariff and the cost sharing issue are potential obstacles which may influence the development of wind power this paper analyses the incremental cost to the power system for long distance transmission of wind power considers the fixed and variable properties of the incremental cost and the risk of fluctuations in the cost and establishes a comprehensive risk based pricing model for long distance transmission of large scale wind power electricity gansu province in china has abundant wind resources so we use the jiuquan wind power integration and the 800 kv gansu zhuzhou direct current dc power transmission as examples to test the validity of the model the conclusions are as follows the allowances for access grid connection cost should be separately estimated for the large scale wind power base and long distance transmission and the long distance transmission pricing of large scale wind power should apply a two part electricity transmission pricing system in order to eliminate the volatility risk inherent in each simple allocation method and the fixed and variable characteristics of the transmission cost the transmission price must include compensation for depreciation operation and maintenance costs and also a reasonable return on investment in order to offer an effective incentive and guidance mechanism for enterprises business development

luther and suleyman this paper emphasizes that the evolution of religious institutions in europe was influenced by the expansionary threat posed by the ottoman empire between the mid 15th century and the early 17th century various historical accounts have suggested that the ottomans rise helped the protestant reform movement as well as its various offshoots such as zwinglianism anabaptism and calvinism survive their infancy and mature utilizing a comprehensive dataset on violent conflicts for the period between 1451 and 1650 i find strong empirical support for the idea that ottoman military engagements in continental europe lowered the number and extent of violent conflicts among and within the european states ottomans influence in europe extended to the feud between the protestant reformers and the catholic establishment during the time between the birth of lutheranism and the end of the thirty years war the likelihood and timing of military engagements between the protestant reformers and the counter reformation forces depended negatively and statistically significantly on ottomans military activities in europe

optimal contracting with subjective evaluation this paper extends the standard principal agent model to allow for subjective evaluation the optimal contract results in more compressed pay relative to the case with verifiable performance measures moreover discrimination against an individual implies lower pay and performance suggesting that the extent of discrimination as measured after controlling for performance may underestimate the level of true discrimination finally the optimal contract entails the use of bonus pay rather than the threat of dismissal hence neither efficiency wages nor the right to dismiss an employee are necessary ingredients for an optimal incentive contract

the firm as a communication network this paper analyzes how organizations can minimize costs of processing and communicating information communication is costly because it takes time for an agent to absorb new information sent by others agents can reduce this time by specializing in the processing of particular types of information when these returns to specialization outweigh costs of communication it is efficient for several agents to collaborate within a firm it is shown that efficient networks involve centralization that individuals delegate tasks to subordinates only if they are overloaded and that the number of transits to the top tends to be equalized across individual information items

was weber wrong a human capital theory of protestant economic history max weber attributed the higher economic prosperity of protestant regions to a protestant work ethic we provide an alternative theory protestant economies prospered because instruction in reading the bible generated the human capital crucial to economic prosperity we test the theory using county level data from late nineteenth century prussia exploiting the initial concentric dispersion of the reformation to use distance to wittenberg as an instrument for protestantism we find that protestantism indeed led to higher economic prosperity but also to better education our results are consistent with protestants higher literacy accounting for most of the gap in economic prosperity

why did the netherlands develop so early the legacy of the brethren of the common life this research establishes a link between the brethren of the common life bcl a religious community founded by geert groote in deventer in the late fourteenth century and the early economic development of the netherlands the bcl stimulated human capital accumulation the historical analyses show that the bcl contributed to the high rates of literacy to the high level of book production and to city growth in the netherlands these findings are supported by a set of ols regressions and further corroborated by 2sls estimates that use distance from deventer as an instrument for the presence of the bcl

cost of long distance electricity transmission in china abstract china s energy resources reserves are concentrated on the central and western regions meanwhile the major energy demand is distributed in the eastern region large scale of cross regional electricity transmission is implemented to guarantee the power supply the long distance electricity transmission ldet cost is an essential component of the final detail price this paper proposes a new method to evaluate the real cost of ldet which mainly focuses on the price mark up between the electricity exporter and importer a weighted least square regression model is applied to evaluate the influence of the factors that could impact the real operating cost of the ldet furthermore we apply the ldet cost model to evaluate the synthesize cost of renewable energy and find the current renewable policy of china is inefficient

which countries have state religions among 188 countries 72 had no state religion in 2000 1970 and 1900 58 had a state religion throughout and 58 had 1 or 2 transitions we use a hotelling spatial competition model to analyze the likelihood that the religion market would be monopolized similar forces influence a government s decision to establish a state religion consistent with the model the probability of state religion in 1970 and 2000 is increasing with the adherence rate to the main religion has a nonlinear relation with population and has little relation with per capita gdp the probability of state religion decreases sharply under communism but lagged communism has only a weak effect with costly adjustment for institutions the probability of state religion in 1970 or 2000 depends substantially on the status in 1900 this persistence is much stronger for countries with no major regime change than for countries with such a change

incumbent behavior vote seeking tax setting and yardstick competition this paper develops a model of the political economy of tax setting in a multijurisdictional world where voters choices and incumbent behavior are determined simultaneously voters are assumed to make comparisons between jurisdictions to overcome political agency problems this forces incumbents into a yardstick competition in which they care about what other incumbents are doing we provide a theoretical framework and empirical evidence using u s state data from 1960 to 1988 the results are encouraging to the view that vote seeking and tax setting are tied together through the nexus of yardstick competition

multistage capital budgeting for shared investments this paper studies the performance of delegated decision making schemes in a two stage multidivision capital budgeting problem for a shared investment with an inherent abandonment option applying both robust goal congruence and sequential adverse selection frameworks we show that the optimal capital budgeting mechanism entails a capital charge rate above the firm s cost of capital in the first stage but below the cost of capital in the second stage further the first stage asset cost sharing rule depends only on the relative divisional growth profiles and equal cost sharing can be optimal even when the divisions receive significantly different benefits from the shared investment project in the presence of an adverse selection problem all agency costs are incorporated into the second stage budgeting mechanism leaving the first stage capital charge rate and asset sharing rule unaffected even though the agency problem induces capital rationing at both stages this paper was accepted by mary barth ac

a theory of debt and equity diversity of securities and manager shareholder congruence this paper shows how the optimal financial structure of a firm complements incentive schemes to discipline managers and how the securities return streams determine the claim holders incentives to intervene in management the theory rationalizes 1 the multipucity of securities 2 the observed correlation between return streams and control rights of securities and 3 the partial congruence between managerial and equity holder preferences over policy choices and monetary rewards as well as the low level of interference of equity in management the theory also offers new prospects for a reappraisal of the earlier corporate finance literature

residual income based compensation plans for controlling investment decisions under sequential private information earlier literature has pointed to the effectiveness of residual income type measures based on particular accrual accounting rules such as the relative benefit allocation rule these performance metrics have been shown to generate desirable managerial incentives when investment decisions are delegated this paper further attests to the robustness of these measures by extending the result to a sequential adverse selection model with an inherent real option an option to abandon in other words as long as the residual income measures are judiciously constructed neither private information nor the requirement to selectively exercise an option derails their use in this setting

reviewing electricity production cost assessments a thorough review of twelve recent studies of production costs from different power generating technologies was conducted and a wide range in cost estimates was found the reviewed studies show differences in their methodologies and assumptions making the stated cost figures not directly comparable and unsuitable to be generalized to represent the costs for entire technologies moreover current levelized costs of electricity methodologies focus only on the producer s costs while additional costs viewed from a consumer perspective and on external costs with impact on society should be included if these results are to be used for planning although this type of electricity production cost assessments can be useful the habit of generalizing electricity production cost figures for entire technologies is problematic cost escalations tend to occur rapidly with time the impact of economies of scale is significant costs are in many cases site specific and country specific circumstances affect production costs assumptions on the cost influencing factors such as discount rates fuel prices and heat credits fluctuate considerably and have a significant impact on production cost results electricity production costs assessments similar to the studies reviewed in this work disregard many important cost factors making them inadequate for decision and policy making and should only be used to provide rough ballpark estimates with respect to a given system boundary caution when using electricity production cost estimates are recommended and further studies investigating cost under different circumstances both for producers and society as a whole are called for also policy makers should be aware of the potentially widely different results coming from electricity production cost estimates under different assumptions

capital rationing and organizational slack in capital budgeting this paper reconciles three stylized facts about capital budgeting in firms and shows that they are tied to the presence of asymmetric information among the several members of the firm each with his or her own objectives and decisions the facts of interest are 1 the existence of organizational slack 2 the rationing of resources within organizations 3 the stated cut off rate for accepting capital projects in firms is often greater than the market rate of interest organizational slack is defined as the excess of resources allocated over the minimum necessary to accomplish the tasks assigned resource rationing is defined as the under allocation of resources i e an increase in the amount allocated would generate revenues in excess of its costs rationing and slack are both manifestations of ex post inefficiencies an lp model is used to show that these inefficiencies can occur in ex ante efficient organizational designs when asymmetric information is present the optimal allocation policy involves a hurdle rate criterion in which the hurdle rate is strictly in excess of the cost of capital thus inducing rationing in some states of the world typically resources are optimally allocated such that slack exists in other states the optimal allocation policy trades off these two inefficiencies