Unemployment,Labour Institutions and Innovation

ABSTRACT: This contribution endorses the transactional trilogy of institutional economics in order to suggest a theoretical framework for re-examining the relationships between unemployment, labour institutions, and technological and organisational innovation. Labour institutions are usually called into question in the debates on European unemployment. Although the advocates of the biased technological change thesis defend it in order to improve the employment of unskilled workers, this article argues that a deregulation of the labour market may in fact generate losses of dynamic efficiency with respect to knowledge accumulation, the organisation of production and national capabilities of innovation. In addition, the impact of technological and organisational innovation on employment partly depends on the capabilities of firms and nations to initiate institutional learning, regarding bargaining, managerial and rationing transactions.     

EXCLUSION AND REINTEGRATION IN A SOCIAL DILEMMA

Using a social dilemma game, we study the cooperative behavior of individuals who reintegrate their group after being excluded by their peers. We manipulate the length of exclusion and whether this length is imposed exogenously or results from a vote. We show that people are willing to exclude the least cooperators and they punish more, and more severely, chronic defections. In return, a longer exclusion has a higher disciplining effect on cooperation after reintegration, but only when the length of exclusion is not chosen by group members. Its relative disciplining effect on cooperation after reintegration is smaller when the length of exclusion results from a vote. In this environment, a quicker reintegration also limits retaliation. The difference in the impact of long versus short exclusion on retaliation is larger when the length of exclusion is chosen by group members than when it is exogenous. Post-reintegration cooperation and forgiveness depend not only on the length of exclusion but also on the perceived intentions of others when they punish. (JEL C92, H41, D23)     

Always doing your best? Effort and performance in dynamic settings

Theory and Decision - Achieving an ambitious goal frequently requires succeeding in a sequence of intermediate tasks, some being critical for the final outcome, and others not. However, individuals...     

The efficiency of crackdowns: a lab-in-the-field experiment in public transportations

The concentration of high-frequency controls in a limited period of time (“crackdowns”) constitutes an important feature of many law-enforcement policies around the world. In this paper, we offer a comprehensive investigation on the relative efficiency and effectiveness of various crackdown policies using a lab-in-the-field experiment with real passengers of a public transport service. We introduce a novel game, the daily public transportation game, where subjects have to decide, over many periods, whether to buy or not a ticket knowing that there might be a control. Our results show that (a) concentrated crackdowns are less effective and efficient than random controls; (b) prolonged crackdowns reduce fare-dodging during the period of intense monitoring but induce a burst of fraud as soon as they are withdrawn; (c) pre-announced controls induce more fraud in the periods without control. Overall, we also observe that real fare-dodgers fraud more in the experiment than non-fare-dodgers.     

Voluntary leadership: motivation and influence

In social dilemmas, leading a team by making heroic efforts may prove costly, especially when the followers are not adequately motivated to make similar sacrifices. Attempting to shed light on what drives people to lead, we devise a two-stage public good experiment with endogenous timing. We show that leading by making generous contributions is widespread and relatively persistent. At least three motives explain this behavior. Some use leadership strategically to distill personal gains, with the expectation that others will respond by being at least as generous. Others are more altruistic, volunteering to lead even though this may come at a personal cost. Yet for another fraction of volunteers, a concern for maintaining a positive social image appears to be responsible. We also find that voluntary leaders are not necessarily more influential than randomly-chosen leaders.     

COMMUNICATION AND COORDINATION IN A TWO‐STAGE GAME

We study the impact of communication on behavior in a two‐stage coordination game with asymmetric payoffs. We test experimentally whether individuals can avoid a head‐to‐head confrontation by means of coordinated strategies. In particular we analyze whether and how quickly a conflict‐avoidance take turn strategy can emerge. First, our results show that players learn to solve the conflict by choosing opposite options at both stages of the game. Second, many adopt a take turn strategy to sustain coordination over time and alleviate the inequality induced by the asymmetry of payoffs. Third, communication increases the likelihood of conflict resolution regardless of whether communication is unilateral or bilateral. (JEL C91, D74, L15, H71)     

Punishment,inequality, and welfare: a public good experiment

This paper reports the results of an experiment that investigates the two-sided relationship between punishment and welfare. First, it contributes to the literature on the behavioral determinants of punishment by examining the role of relative income and income comparisons as a determinant of punishment in a two-stage public good game when inequality arises endogenously from the subjects’ behavior. Second, this paper investigates the impact of punishment on both absolute and relative incomes. We compare three treatments of our game. The Unequal Cost treatment replicates Fehr and Gächter (2000)’s experiment under a stranger matching protocol. The Equal Cost treatment is identical to the previous one except that the ratio between the cost of one punishment point to the punisher and its cost to the target equals one. The third treatment is similar to the second one except that a partner matching protocol is implemented in order to isolate strategic motives for punishment. Our results indicate that subjects punish even when they cannot alter the current distribution of payoffs. We also find that in all treatments, the intensity of punishment increases in the level of inter-individual inequality. Finally, despite its cost, punishment progressively improves welfare in association with a decrease in the aggregate level of inequality over time.