preferences for energy efficiency vs renewables how much does a ton of co2 emissions cost concerns about climate change are growing and so is the demand for information about the costs and benefits of mitigating greenhouse gas emissions this paper seeks to estimate the benefits of climate change mitigation as measured by the public s willingness to pay for such policies we investigate the preferences of italian and czech households towards climate change mitigation policy options directly related to residential energy use we use discrete choice experiments which are administered in a standardized fashion to representative samples in the two countries through computer assisted web interviews our preferred estimates of the willingness to pay per ton of co2 emissions avoided is 133 for the italians and 94 euro for the czech respondents at 2014 purchasing power parity we find evidence of considerable heterogeneity in wtp driven by income the two samples differ in their within sample income elasticities of wtp but comparison across the two countries suggests an income elasticity of wtp of one or even greater than one for certain mixed logit specifications

rules and discretion with noncoordinated monetary and fiscal policies the time inconsistency of optimal monetary policy is due to the effects of tax distortions thus the issue of how to improve upon the time consistent suboptimal monetary policy is related to that of the coordination of monetary and fiscal policy we present a model with three players the central bark the fiscal authority and wage setters in which distortionary taxes are explicitly modelled we show that binding commitments to monetary rules are not necessarily welfare improving if monetary and fiscal policy are not coordinated we also examine the effects of different degrees of independence of the central bank

intergenerational aspects of ecotax reforms an application to germany in a model of overlapping generations and majority voting we analyze an ecotax reform consisting of the tax rate and the budgetary rule revenue can be recycled through a lump sum transfer or a reduction in pension contributions our theoretical results as well as the calibration of our model to the german economy show that the median voter s preferred tax rate may exceed the efficient rate this holds whenever income of the decisive voter is sufficiently high compared to the average income as rich individuals benefit more from a reduction in pension contributions than they are harmed by an increase in ecotaxes the calibration confirms that the median voter prefers the earmarking of tax revenue for reductions in pension contributions to the alternative lump sum transfer this is quite an accurate prediction of the situation in germany aging of society as expected for germany lowers the ecotax in the political equilibrium below its optimal level

green taxes can we protect the environment and improve the tax system at the same time on a cursory inspection public economics appears to provide a straightforward and compelling answer of yes to the question posed in the title to this paper as economists have long argued appropriately designed taxes can in principle at least efficiently restrain levels of polluting activities and in addition such taxes will generate revenues so that we can reduce rates on other forms of taxation that distort the functioning of the economy green taxes in short promise a double dividend they can both reduce excessive levels of pollution and increase the efficiency of the overall tax system at least so several economists have argued recently 17 20 but is this really so with the growing recognition of the enormous revenue potential of certain environmental taxes especially carbon taxes to address the problem of global warming public economists have returned to this question with a new round of research efforts directed both to understanding the properties of pollution taxes as revenue sources and to estimating their revenue potential and the magnitude of their effects on the economy and the newly emerging literature is producing some quite astonishing and very troubling findings in this paper i want to review this work and explore its implications when viewed in relation to some other research it appears to suggest that most forms of regulatory activity at least those that increase the costs of the regulated activities may have hitherto unappreciated costs of a stunning magnitude what many of us would have taken to be second order side effects of environmental and other regulatory policies can be of a magnitude that compromises to a significant extent their welfare enhancing properties having reviewed this body of work i wish also to explore some issues in the political economy of green taxes it is helpful to begin by briefly putting the issue in historical perspective

the incentives to make commitments in wage bargains it is commonly believed that a workforce of identical workers will be better off organised in a single union rather than separate unions that bargain independently with an employer for this will prevent the employer playing off one union against another in this paper i show that there are circumstances where this need not be the case if it is impossible for the firm and workers to sign long term binding contracts on wages and employment then the firm will wish to invest in a capital stock below the efficient level by organising in separate unions the firm will be induced to raise its level of investment to ensure it has enough capacity with each union to make a threat to switch production to another union credible the effect on workers payoffs from a higher capital stock can outweigh the loss of bargaining power as a result of the workforce being in separate unions there will also be circumstances where the firm will invest in a capital stock that exceeds the efficient level

social and political responses to ecological tax reform in europe an introduction to the special issue this paper introduces the special issue on the policies for ecological tax reform assessment of social responses petras project about responses to ecological tax reform etr in europe although etr is widely accepted to be a policy with desirable effects its implementation has been limited by problems of political acceptability the project aimed to address the question of how to make such a policy more acceptable it is the first study to examine in depth the thinking of members of the general public about the etr policies and is also the first international comparative study of the thinking of ordinary business people about etr policies the petras project methodology was based around the use of interviews and focus groups to inform the assessment of social responses to etr policies and the development of improved designs for them a number of issues emerged relating to awareness trust understanding of the purpose visibility incentives regressivity levels of taxation terminology communication about etr and the use of alternative instruments together with these similarities a pattern of differences between the countries can also be seen the final section of this paper introduces the national studies described in the following papers

on the effects of asymmetric and endogenous taxation in experimental public goods games abstract in our experimental public goods game subjects face exogenously or endogenously determined asymmetric minimum contributions endogeneity does not affect overall contributions if asymmetric contribution levels are approved of endogenously the disadvantaged subjects contribute significantly less than in case of exogenous determination

green taxes in a post paris world are millions of nays inevitable turning the paris agreement s greenhouse gas emissions pledges into domestic policies is the next challenge for governments we address the question of the acceptability of cost effective climate policy in a real voting setting first we analyze voting behavior in a large ballot on energy taxes rejected in switzerland in 2015 by more than 2 million people energy taxes were aimed at completely replacing the current value added tax we examine the determinants of voting and find that distributional and competitiveness concerns reduced the acceptability of energy taxes along with the perception of ineffectiveness most people would have preferred tax revenues to be allocated for environmental purposes second at the same time of the ballot we tested the acceptability of alternative designs of a carbon tax with a choice experiment survey on a representative sample of the swiss population survey respondents are informed about environmental distributional and competitiveness effects of each carbon tax design these impacts are estimated with a computable general equilibrium model this original setting generates a series of novel results providing information on the expected environmental effectiveness of carbon taxes reduces the demand for environmental earmarking making distributional effects salient generates an important demand for progressive designs e g social cushioning or recycling via lump sum transfers the case of lump sum recycling is particularly striking it is sufficient to show its desirable distributional properties to make it one of the most preferred designs which corresponds to a completely novel result in the literature we show that providing detailed information on the functioning of environmental taxes may contribute to close both the gap between acceptability ex ante and ex post and the gap between economists prescriptions and the preferences of the general public

time delay complexity and support for taxation people often experience the benefits of taxation over time we design an intertemporal market experiment with negative externalities to examine how delaying the benefits of taxation affects support for taxes we find that when negative externalities occur immediately people learn to adopt pigouvian taxes which are aimed at reducing negative externalities and restoring market efficiency by contrast when negative externalities are delayed people are less receptive to taxation this effect persists over time our data reveal that the strong negative delay effect can be explained in large part by narrow bracketing and the increased perceived complexity of the environment rather than by time discounting per se we argue and demonstrate that increasing the transparency of intertemporal tradeoffs can effectively promote support for taxation

carbon pricing revenues could close infrastructure access gaps introducing a price on greenhouse gas emissions would not only contribute to reducing the risk of dangerous anthropogenic climate change but would also generate substantial public revenues some of these revenues could be used to cover investment needs for infrastructure providing access to water sanitation electricity telecommunications and transport in this way emission pricing could promote sustainable socio economic development by safeguarding the stability of natural systems which constitute the material basis of economies while at the same time providing public goods that are essential for human well being for a scenario that is consistent with limiting global warming to below 2 c we find that domestic carbon pricing without redistribution of revenues across countries has substantial potential to close existing access gaps for water sanitation electricity and telecommunication however for the majority of countries carbon pricing revenues would not be sufficient to pave all unpaved roads and for most countries in sub saharan africa they would be insufficient to provide universal access to all types of infrastructure except water if some fraction of the global revenues of carbon pricing is redistributed e g via the green climate fund more ambitious infrastructure access goals could be achieved in developing countries our paper also bears relevance for the design of climate finance mechanisms as it suggests that supporting carbon pricing policies instead of project based finance might not only permit cost efficient emission reductions but also leverage public revenues to promote human development goals

accepting market failure cultural worldviews and the opposition to corrective environmental policies abstract to explore whether and why people sometimes reject environmental policies that improve individual and collective outcomes we create an experimental market in which transactions generate a negative externality market participants endogenously determine whether to implement corrective policies we consider three policy instruments pigouvian taxes and subsidies and quantity regulation and two levels of policy efficiency full and half we then explore how individual cultural worldviews might contribute to the rejection of policies that correct the market failure our results indicate that people often oppose policies that improve their material outcomes and we find that such opposition is significantly explained by cultural worldviews interesting connections emerge between individual worldviews and specific policy instruments

papers in experimental economics competitive market institutions double auctions vs sealed bid offer auctions consider a market with the following characteristics 1 privacy that is each agent knows only his own valuation or cost conditions 2 exchange follows the rules of the oral double auction that is buyers freely announce bids or accept offers and sellers freely announce offers or accept bids 3 aggregate market supply and demand per trading period is stationary for at least two to three periods and 4 there are at least four buyers and as many sellers the literature reporting the results of a large number of experimental markets with these characteristics documents what appears to be a remarkably rapid convergence to a competitive equilibrium ce however any claim of double auction da convergence to the ce can only have meaning in one of three senses i the ce is attained immediately ii after t periods of trading some measure of the market s state such as mean price is nearer relative to experimental sampling variability to a ce than to some distinct alternative equilibrium such as a monopoly or nash equilibrium iii after t periods of trading this measure is nearer to a ce in da experimental markets than in markets organized under a different institution of contract for example a sealed bid auction since everything from electrons and the stars to rats and people yield state measures subject to error or random variation the deterministic criterion i can have no serious scientific standing by such criteria any hypothesis can be rejected and there could be no science of physics biology or economics 2 with the exception of certain very simple markets such as single object auctions or certain idealized markets such as the cournot quantity adjuster model economics has only two concepts of equilibrium monopoly and competitive the only formal model of da trading that has been proposed see david easley and john ledyard p 6 predicts stochastic convergence in finite time with probability one to a ce hence the only test alternative to the ce research hypothesis in da markets is a monopoly or monopsony equilibrium experimentalists have not reported statistical tests of the ce professor department of economics university of arizona assistant professor department of economics indiana university instructor department of economics university of arizona and sandia national laboratories albuquerque nm respectively we are indebted to the national science foundation for research support and to art denzau and mort kamien for helpful comments there is an early and recently growing body of experimental evidence for convergence to a competitive equilibrium under double auction rules the earliest evidence contained in experiments initiated in january 1956 is reported in smith 1962 1964 1965 1976 however these early experiments used between twenty and fifty or so participant buyers and sellers because in keeping with prevailing professional beliefs it was thought that a ce was unlikely to be approached unless numbers were quite large using large numbers was not unreasonable since it is a good beginning procedure to give a theory whatever is believed to be its best shot more recent evidence using six buyers six sellers and two traders in speculative da markets with cyclical demand is reported by r m miller charles plott and smith and williams 1979 for evidence from a comparison of oral and computerized da experiments with four buyers and four sellers see williams 1980 for further evidence in the context of the study of price controls see m isaac and plott 1981b and smith and williams 1981b in the context of a conspiracy study see isaac and plott 1981a in the context of comparisons between da and posted offer pricing see jon ketcham smith and williams in the context of a study of four variations on da rules see smith and williams 1980 all of these more recent papers report double auction experiments using no more than four buyers and four sellers 2as frederick mosteller once noted if you wanted to reject the inverse square law of attraction try tossing a sheet of paper out the window

an expressive voting theory of strikes i introduction economists usually make the realistic assumption that individuals commonly choose to further their material interests other things equal they will choose the higher paying job make the investment with a higher expected return for a given risk and so on recent work however has pointed out that individuals do not always pursue their immediate selfish interests evolutionary pressures for example may promote emotional outbursts which have little immediate benefit social pressures may lead to behavior which is not pareto optimal but which is individually rational in short recent work has shown that behavior which at first looks irrational need not be for further discussion see akerlof 1984 chs 4 and 9 etzioni 1988 frank 1988 simon 1990 this paper considers emotional behavior which cannot be explained by its long term benefits it instead focuses on behavior which is not costly when practiced by one person but is when practiced by many unlike other works i do not require that individuals usually act emotionally or that they do so at significant cost to themselves i only require that when the cost of emotional behavior is sufficiently small individuals will pursue it indeed in my model individuals rationally calculate when to behave emotionally in particular under some circumstances the action of any one individual has negligible effects on his wealth though the similar actions of numerous persons will have significant effects individuals may then free ride letting emotional motives guide their activity this paper presents one important application of such behavior the decision of a union member to vote for a strike indeed it has long been recognized that though union members may vote for strikes to increase wages emotional considerations can also be important in 1921 hansen claimed that strike decisions are motivated primarily by a sense of grievance about wages ashenfelter and johnson 1969 37 write that union leaders may prefer to call a strike because under strike conditions the leadership may at least appear as adversaries against management in a crusade which may even raise their political stock and will unify the workers newspapers tell of strikes that appear to have little economic rationale for example the wall street journal march 17 1989 reported that with the eastern airlines walkout now nearly two weeks old what boils to the surface is an intense highly personal anger a feeling that their self respect honor and dignity have been undercut by a management obsessed with pinching pennies the new york times april 23 1989 reported that four years after the end of a strike against united airlines union pilots were harassing non union pilots the harassment ranged from verbal abuse and refusal to shake hands to more serious breaches like not advising a pilot that he is approaching an altitude assigned by air traffic controllers work by getman goldberg and herman 1976 suggests that a worker in union representation elections is more likely to favor unionization the more effectively the company threatened the loss of jobs following unionization this view of non instrumental union behavior is also consistent with a large body of evidence which finds that union members are less likely to ratify a contract the worse the relations between management and labor indeed cappelli and sterling 1988 find that the state of labor relations in a plant is the strongest predictor of union voting outcomes similarly kaufman and martinez vazquez 1988 find that union members are least likely to vote in favor of wage concessions in plants with adversarial labor relations though much evidence is consistent with the hypothesis that strike votes are not based solely on economic considerations the approach suffers from two faults as a basis for an economic theory first intuition suggests that the emotional gain from a strike is likely to be far smaller than the monetary cost of a strike a strike may cost a worker over 1 000 a week in lost wages 1 yet we rarely find people wasting that much money in emotional outbursts

environmental and wider implications of political impediments to environmental tax reform abstract the most common notion of environmental tax reform etr is the use of the revenue from environmental taxes to reduce distortionary labour taxes the petras project 1 has shown that there are a number of social and political impediments to implementing such reform this paper firstly outlines some of the environmental and economic implications of environmental taxes generally it goes on to explore three broad approaches to etr based on the allocation of the tax revenues and explores the environmental and economic implications of each approach and the likelihood of political and social acceptance particular attention is paid to reducing regressive impacts and impacts on competitiveness it is concluded that some combination of earmarking a proportion of revenues to environmental projects and diverting rest to reduce labour taxes is probably the best approach in light of the results of the project the balance should depend upon local labour market and macroeconomic conditions the extent to which environmental projects are already funded and the extent of government failure i e the problems of resource allocation that occur as a result of government intervention in markets funding should only be provided to environmental projects if it can be shown that in themselves they are economically efficient in addition it is most important that a proportion of the funds be used to ameliorate any regressive impacts it is also important to bear in mind that hypothecation or recycling of revenue is not the same as a tax shift which is a reform of the entire system so some of these approaches may take away from the integrity of etr the paper concludes with some of the initiatives that are likely to be necessary to facilitate social and political acceptance of this approach to etr

voting behavior and information aggregation in elections with private information we analyze two candidate elections in which voters are uncertain about the realization of a state variable that affects the utility of all voters each voter has noisy private information about the state variable we show that the fraction of voters whose vote depends on their private information goes to zero as the size of the electorate goes to infinity nevertheless elections fully aggregate information in the sense that the chosen candidate would not change if all private information were common knowledge equilibrium voting behavior is to a large extent determined by the electoral rule i e if a candidate is required to get at least x percent of the vote in order to win the election then in equilibrium this candidate gets very close to x percent of the vote with probability close to one finally if the distribution from which preferences are drawn is uncertain then elections will generally not satisfy full information equivalence and the fraction of voters who take informative action does not converge to zero

efficiency effectiveness and implementation feasibility of energy efficiency rebates the renove plan in spain abstract state sponsored incentive policies frequently include subsidies or rebates for the purchase of more efficient appliances however more research is required into the effects of this tool in isolation a case in point is the so called renove plan in spain first the inefficiency losses dead weight losses associated with energy efficiency rebates must be taken into account such a policy may also encourage the large scale purchasing of energy efficient appliances which may finally result in an increase in electricity consumption rebound effect furthermore although a subsidy is more widely accepted than other tools from social and political viewpoints especially than taxes the fiscal consolidation challenge faced by many countries reduces the scope for environmental policy measures on the expenditure side of the budget and strengthens the need to use taxes to meet the agreed policy objectives this paper shows that the current application of the spanish renove plan with rebates on the dishwasher market for energy efficient appliances generates some welfare losses a rebound effect and a considerable deficit in public budgets the paper examines and assesses the effect of different combinations of taxes and rebates in the case of dishwashers in spain based on their performance in terms of economic efficiency environmental effectiveness and implementation feasibility

energy and climate hand in hand financing res e support with carbon revenues abstract in italy the cost of support for renewable electricity res e is largely recovered through the a3 surcharge which weighs heavily on electricity bills using household survey data we show the a3 surcharge is markedly regressive carbon taxation in the non ets sector is envisaged as a means to reduce co2 emissions cost effectively and generate revenue to lower the a3 surcharge a non ets carbon tax would be less regressive than the a3 surcharge and its cost would be more evenly distributed across households we calculate the revenue of a 20 tco2 non ets carbon tax would have allowed a cut in the a3 surcharge of about 68 in 2011 and 39 in 2012 the impact of the carbon tax plus the reduced a3 surcharge would have been less regressive but the cost higher for most households the restrictions imposed in the simulations mean the results are only appropriate to render first round effects of the reform policy relevance in the vast majority of the eu member states the cost of res e support is largely paid by electricity consumers most often through specific surcharges rising electricity prices are a common concern given the implications for competitiveness and equity the member states facing this issue could conveniently address it through environmental tax reforms consistent with the climate and energy package replacing res e surcharges with carbon taxes in the non ets sector would permit cost effective reduction of co2 emissions while allocating the cost of res e support more equitably the difference in regressivity would stem from the different consumption patterns of home fuels including electricity and motor fuels across income distribution a cross country comparison of energy household budget shares proves the structural nature of this difference between home fuels and motor fuels moreover the notion that electricity consumers should pay for res e support is questioned on the grounds that electricity is a basic necessity good and res e support is a means of providing public goods notably energy security and climate protection

optimal life cycle capital taxation under self control problems we study optimal taxation of savings in an economy where agents face self control problems and we allow the severity of self control to change over the life cycle we focus on quasi hyperbolic discounting with constant elasticity of inter temporal substitution utility functions and linear markov equilibria we derive explicit formulas for optimal taxes that implement the efficient commitment allocation we show analytically that if agents ability to self control increases concavely with age then savings should be subsidised and the subsidy should decrease with age we also study the quantitative effects of age dependent self control problems and find that the optimal subsidies in our environment are much larger than those implied by models with constant self control finally we compare our optimal subsidies with those implied by the 401 k plan although the subsidy levels in the two cases are of comparable magnitudes the 401 k plan implies an increasing pattern of subsidies while the optimal subsidies decrease over the life cycle

policy analysis on recycling fund management for e waste in taiwan under uncertainty abstract this study aims to find an efficient and fair policy on using a recycling fund in an uncertain environment after over a decade s experience on e waste management the current policy of taiwan s recycling fund management board rfmb is reviewed in search of a better policy rfbm s environmental goal is to maximize the recycling rate with an uncertain fund the study evaluates the fund on two models yearly balance and multi period and illustrates the concept of two fund settings offset yearly and earmarked we generate four scenarios covering the estimated fund incomes in future years using waste printers as an example in the analysis the results herein show that the multi period model provides more benefits than the yearly balance model for any situation under the four scenarios and that the earmarked setting has an edge over the offset yearly setting in the above situations we recommend that rfmb switch its fund setting into an earmarked fund and use the multi period model as it can obtain more option values against uncertainties in the long run the finding on how to manage a recycling fund offers reference value for other countries adopting such a subsidy system for extended producer responsibility

non cooperative bargaining theory an introduction the paper provides an informal introduction to some of the main themes of the recent literature on non cooperative or sequential bargaining models it focuses in particular on the relationship between the new approach and the traditional axiomatic approach exemplified by nash bargaining theory it illustrates the new insights offered by the non cooperative approach by reference to a detailed analysis of the manner in which the presence of an outside option available to one of the parties will affect the negotiated outcome finally the difficulties which arise in extending this analysis to two person bargaining with incomplete information and to n person bargaining are discussed this is a revised version of the fourth review of economic studies lecture presented in april 1985 at the joint meeting of the association of university teachers of economics and the royal economic society held in oxford the choice of lecturer is made by a panel whose members are currently professors hahn mirrlees and nobay and the paper is refereed in the usual way this paper aims to provide an informal and elementary introduction to an approach to bargaining which has received a great deal of attention over the past few years the approach involves writing down some particular sequence of moves offers and replies to be made over time in the course of negotiations and then looking for a non cooperative equilibrium in the game thus specified in practice a perfect equilibrium or in games of incomplete information a sequential equilibrium while the approach appears at first sight to be very different in spirit from the traditional axiomatic approach in which a bargaining solution is specified by appealing to a number of general requirements which are deemed appropriate on the basis of some a priori considerations the two approaches are in fact complementary while the

long term relationships governed by short term contracts this paper studies the effects of contract duration on the incentive to invest in a relationship when its parties are rational and have perfect information and contracts are complete ex cept that short term contracts specify only current period actions t hen short term contracting distorts investment decisions only when t he efficient plan involves mainly sunk cost investment and the relati onship plays a consumption smoothing role there is a general but no t universal tendency to underinvest copyright 1988 by american economic association

the demand for bad policy when voters underappreciate equilibrium effects most of the political economy literature blames inefficient policies on institutions or politicians motives to supply bad policy but voters may themselves be partially responsible by demanding bad policy in this article we posit that voters may systematically err when assessing potential changes in policy by underappreciating how new policies lead to new equilibrium behaviour this biases voters towards policy changes that create direct benefits welfare would rise if behaviour were held constant even if those reforms ultimately reduce welfare because people adjust behaviour conversely voters are biased against policies that impose direct costs even if they induce larger indirect benefits using a lab experiment we find that a majority of subjects vote against policies that while inflicting direct costs would help them to overcome social dilemmas and thereby increase welfare subjects also support policies that while producing direct benefits create social dilemmas and ultimately hurt welfare both mistakes arise because subjects fail to fully anticipate the equilibrium effects of new policies more precisely we establish that subjects systematically underappreciate the extent to which policy changes will affect the behaviour of other people and that these mistaken beliefs exert a causal effect on the demand for bad policy

the role of budgetary information in the preference for externality correcting subsidies over taxes a lab experiment on public support the potential of taxes to correct environmental externalities has long been recognized among economists yet this welfare enhancing policy commonly faces strong opposition by citizens conversely externality correcting subsidies frequently enjoy high public support we conduct a lab experiment to explore public support for pigouvian taxes and subsidies in an experimental market with a negative externality participants vote on the introduction of pigouvian taxes and subsidies under full or reduced information concerning how the tax revenues will be spent and the subsidy paid for theoretically the two instruments should produce identical outcomes however we find substantially greater support for subsidies than for taxes this can partially be explained by the participants expectation that the subsidy will increase their own payoffs more than a tax but not because it is expected to be more effective in changing behavior furthermore we find that with greater uncertainty the preference for subsidies is even stronger a result which is consistent with loss aversion

a choice experiment on fuel taxation and earmarking in norway abstract pigouvian taxes are efficient but unpopular among voters and hence often politically infeasible earmarking of revenues has been widely reported to increase public support for taxes but earmarking is generally not the most efficient use of the revenues this trade off between efficiency and political feasibility is the motivation for our primary research objective to quantify the effect of earmarking on support for fuel tax rises our secondary research objective is to investigate why earmarking increases support using data from a representative sample of the norwegian voter population n 1147 we estimate models of voter preferences for fuel taxes using logistic regression models our results show that in the absence of earmarking the majority of voters would like to reduce fuel taxes but earmarking the revenues for environmental measures has a substantial effect on voter support for fuel tax increases garnering a majority for increases of up to 15 above present levels further analysis indicates that a prime reason why earmarking for environmental measures is popular is that it increases the perceived environmental effectiveness of the tax and hence its legitimacy as an environmental rather than a fiscal policy instrument

payments or persuasion common pool resource management with price and non price measures we use lab experiments to study policies that address common pool resource overuse we look at a price mechanism specifically a pigouvian subsidy and four non price interventions the non price policies are information alone information with a normative message communication alone and normative messages with communication allowed in all experiment sessions no intervention occurs in the first seven and last seven rounds allowing us to examine the effects of introducing and taking away a policy the subsidy leads to near efficient extraction but surprisingly leads groups that were not over extracting to also reduce extraction this over compliance decreases efficiency although on net the subsidy is the most efficiency enhancing intervention information provision communication normative appeals and normative appeals combined with communication all reduce over extraction though by less than the subsidy without exacerbating over compliance however the effects of information alone and communication alone are small and not robust the non price policies cause a decline in over extraction of from 0 549 information to 11 441 normative appeals with communication these effects are of the same order of magnitude as the effects seen in major field studies of conservation messaging the subsidy has the worst persistence properties after the intervention ceases while normative messages with communication have the best

tax me if you can an artifactual field experiment on dishonesty in this paper we test whether increased salience of a tax charge increases dishonesty using a version of the die under cup paradigm participants earn money in proportion to the outcome reported and thus have an incentive to over report we find a significant increase in high outcomes in the presence of a tax frame suggesting that participants use the tax as an excuse to rationalize their dishonest act in addition we tested whether adding an explanation for the adoption of the tax would increase honesty we find evidence for reversed dishonesty with participants reporting significantly more low outcomes these results warn policy makers about the non trivial relationship between taxation charges and dishonesty

crashing the party an experimental investigation of strategic voting in primary elections the effect of primary formats on voting behavior and candidatefortune has been the topic of recent political academic andlegal arguments we address these debates by examining voterbehavior and election outcomes across primary systems in thelaboratory while we find the rate of strategic voting isgenerally low the rate varies across primary formats and thepotential impact on election outcomes differs fromconventional perceptions results suggest that more openprimary systems generate more strategic voting but contraryto conventional wisdom more open systems do not necessarilylead to more moderate election winners

the continuing search for a popular tax for the next few years perhaps for a longer time federal tax policy will be inseparably intertwined with deficit reduction policy as a result tax decisions will be more closely related to spending decisions and attention will shift to new kinds of taxes for decades federal tax policy debates have been quite separate from debates over what these taxes are supposed to finance federal tax controversy has focused heavily on the major general revenue sources the individual and corporate income taxes economists have analyzed the effects of these levies on economic behavior and on the distribution of income and this analysis has played a considerable role in policy formulation the substantial reduction in marginal tax rates as well as base broadening indexing and changes in the treatment of depreciation and consumer interest were greatly influenced by the views of economists the frequency of recent changes in the income tax rules capped by the surprisingly comprehensive tax reform legislation of 1986 have left both politicians and tax reformers with little appetite for further tinkering with the income taxes moreover the continuing large deficits in the federal budget only partially offset by growing surpluses in the social security trust fund have forced policymakers to focus on a new aspect of an old problem how to get citizens to want less from their federal government or be willing to pay more for it

do you not like pigou or do you not understand him tax aversion and revenue recycling in the lab tax aversion reduces the likelihood that price rationing can be a politically viable tool for environmental protection we examine the case of the classic pigouvian tax to control a negative externality and consider how recycling the revenues labeling of the tax and information about its purpose affects the support for taxation we test the support for taxation within a single price market experiment in which purchases by some buyers impose external costs on others observing behavior consistent with tax aversion we also find that recycling the revenues to more narrowly targeted groups seems to increase support for taxation in the absence of narrow revenue recycling labeling a pigouvian instrument as a tax may significantly lower the likelihood of voter support

product oriented climate policy learning from the past to shape the future abstract product oriented climate policies such as labels financial incentives and emission standards for vehicles and buildings have achieved considerable reductions in emissions and triggered innovations that offer very low emissions during the use phase in contrast to other climate policy instruments these policies are successfully applied in an increasing number of regions however a major proportion of global emissions namely those from industry remain outside the scope of most current forms of product oriented climate policies all economic activities could be included by extending product oriented policies to embodied emissions i e emissions resulting from manufacturing products to guide such a development we need a better understanding of the current state and potential future development of this policy approach therefore in this paper we review and evaluate policy evolution over the past decade in terms of both measures implemented and emissions addressed on this basis we synthesize a framework for developing policy towards greater stringency and broader scope the framework describes a step wise process to achieve increasingly stringent standards once established standards can extend their scope to include additional similar products and related embodied emissions our framework and policy review informs the reinforcement and extensions of current product oriented climate policies a relevant implication for international climate policy is that the regional adoption of such policies incentivizes the global diffusion of low ghg products international climate policy can foster this development by supporting the harmonization of carbon footprint norms for products in order to enhance conformity with international trade and facilitate the extension of product oriented climate policy to embodied emissions

voting when money and morals conflict an experimental test of expressive voting abstract moral considerations may matter much in voting because the costs of expressing support for a morally worthy cause may be low in a referendum these costs depend on whether a voter expects to affect the outcome of the referendum to test the low cost theory of expressive voting we experimentally investigate a proposal to tax everyone and to donate tax revenues the analysis of expectations and voting decisions shows that the low cost theory fails to explain voting decisions instead we find that voters tend to approve of the proposal if they expect others to approve too

unionization structure licensing and innovation we show the effects of the unionization structure viz decentralized and centralized unions on a firm s incentive for technology licensing and innovation the incentive for technology licensing is stronger under decentralized unions we identify circumstances under which the benefit from licensing creates a stronger incentive for innovation under decentralized unions if the union s preference for employment is high the benefit from licensing may create higher incentive for innovation under decentralized unions however if the union s preference for wage is high enough the incentive for innovation is higher under a centralized union irrespective of licensing ex post innovation if the centralized union decides whether or not to supply workers to all firms the possibility of higher innovation under decentralized unions increases we further show that perfectly substitutable workers can be better off under decentralized unions if the labor productivity depends on the unionization structure which occurs in our analysis when e g licensing after innovation occurs only under decentralized unions or innovation with no licensing occurs only under a centralized union

externalities and corrective policies in experimental markets this paper reports on the behaviour of simple laboratory markets which have an externality experiences with these markets provide some help in answering two broad questions 1 do markets with externalities behave in accordance with the law of supply and demand 2 how do the pollution tax pollution standard and pollution licenses compare as methods for correcting the externality