Volume 25, Issue 1

Sabotage in competitive environments, like sales contests and sports, can hinder the effectiveness of rank-order tournaments in selecting the most capable individuals. Traditional winner-take-all tournaments may unintentionally level the playing field, making it difficult to distinguish the best. Despite extensive research on tournament design, the impact of sabotage on selection efficiency remains underexplored. This paper addresses this gap by investigating how the introduction of multiple-prize structures in rank-order tournaments affects selection efficiency in the presence of sabotage. Our analysis reveals that multiple prizes can improve the selection of high-performing contestants by redirecting sabotage toward weaker opponents, resulting in corner equilibria. In contrast, winner-take-all structures often result in interior equilibria, where promotion chances are equalized. By outlining the conditions under which these equilibria arise, we demonstrate that strategic prize design can enhance performance incentives, mitigate the negative impact of sabotage, and ultimately improve the selection efficiency of rank-order tournaments.

We examine the heterogeneous effects of 14–21 euro copayments on primary care general practitioners (GPs) visits in Finland. Our study focuses on a triage-based appointment system in public primary care. Using an age-based regression discontinuity (RD) design and leveraging variation across Finnish municipalities in whether the copayment is charged, we analyze the effects at the 18th birthday, when previously exempted adolescents become subject to copayments. Using nationwide administrative data from 2011 to 2019, we find that GP visits decrease in the copayment municipalities by 4–5 %. The reductions are largest for the bottom 20 % of the equivalized family disposable income distribution: their GP use decreases by 0.08–0.10 annualized visits (7–10 %). Unexpectedly, the effects are also larger than average (albeit rather temporary) for the top 50 %, showing reductions of 6–8 %. Compared to earlier studies focusing on moderate copayments and different populations, our effect estimates are smaller, and the heterogeneity by income level is weaker.

In this paper, I extend the seminal commodity-tax competition model of Kanbur and Keen (1993. “Jeux Sans Frontières: Tax Competition and Tax Coordination When Countries Differ in Size.” The American Economic Review 83: 877–92) letting asymmetric producer prices between countries of different sizes. Unlike Kanbur and Keen, I show that there are multiple equilibria, and at some equilibria, small-country consumers cross-shop from the large. Besides, tax harmonization can benefit the small country, and a minimum tax rate can decrease a country’s tax revenue.

While inequality in resource endowments has been shown to affect cooperation levels in groups, much of this evidence comes from studies of within-group inequality. In an online public goods experiment, we instead examine the effects of payoff-irrelevant inequality in resources between groups on cooperation within equal groups, i.e. the effect of mere exposure to inequality. When all groups are poor or rich, their contribution behaviour is very similar. Relative inequality, when poor and rich groups coexist, leads to lower contributions in rich groups. We find suggestive evidence that this may be related to stereotypes about the rich contributing less than the poor.

We provide a new reason for the consumer surplus and welfare raising cross ownership. We show that cross ownership reduces the tax rate, and increases consumer surplus and welfare under Cournot and Bertrand competition when the marginal social cost/benefit of public funds is less than unity. We further show that Cournot competition creates higher consumer surplus and welfare compared to Bertrand competition if the marginal social cost/benefit of public funds is less than unity, thus providing a new reason for the Cournot-Bertrand welfare reversal.

In this paper, we provide unique experimental evidence of depositors’ behaviour in presence of a possibility to convert commercial bank deposits into central bank digital currency (CBDC). Theoretically and experimentally we analyse whether such an option incentivises bank runs. We find that the availability of the deposit conversion option does not lead to a significant outflow of deposits. However, when conversion is restricted, depositors are eager to actively use it as a coordination tool. These findings highlight the importance of considering coordination and decision time in determining the choice to convert deposits into CBDC. Our study evidences that policy-makers should balance accessibility and control measures to maintain financial stability, ensuring that CBDC implementation supports the resilience of the banking system.

In this paper, we report data drawn from a field study in an Italian region (Campania), where a disastrous earthquake took place in 1980. We rely on subjects’ responses to a questionnaire and on experimental measures. We compare the time preferences in two different samples, the first one constituted by subjects who directly experienced the earthquake and its aftermath effects, and the second one constituted by subjects who lived far away from the earthquake epicentre, but in urban areas with comparable socioeconomic features. Our aim is to test whether there are long run effects of environmental disasters on time preferences. We find significant differences, since individuals living close to the epicentre are more patient than subjects in the alternative sample, also controlling for risk aversion.