Volume 24, Issue 1

We exploit the natural experimental setting provided by the Covid-19 lockdown to analyse how performance is affected by a friendly audience. Specifically, we use data on all football matches in the top-level competitions across France, Germany, Italy, Spain, and the United Kingdom over the 2019/2020 season. We compare the difference between the number of points gained by teams playing at home and teams competing away before the Covid-19 outbreak, when supporters could attend any match, with the same difference after the lockdown, when all matches took place behind closed doors. We find that the performance of the home team is halved when stadiums are empty. Further analyses indicate that offensive (defensive) actions taken by the home team are drastically reduced (increased) once games are played behind closed doors. Referees are affected too, as they change their behaviour in games without spectators. Finally, the home advantage is entirely driven by teams that do not have international experience. Taken together, our findings corroborate the hypothesis that social pressure influences individual behaviour.

This paper studies how individuals discount the utility they derive from their provision of goods over spatial distance. In a controlled laboratory experiment in Germany, we elicit preferences for the provision of the same good at different locations. To isolate spatial preferences from any other direct value of the goods being close to the individual, we focus on goods with “existence value.” We find that individuals put special weight on the provision of these goods in their immediate vicinity . This “vicinity bias” represents a spatial analogy to the “present bias” in the time dimension.

Using data from 5474 banks located in 23 OECD countries over the period 2019Q2–2022Q1, we study the influence of COVID-19 on bank profitability (before and during the COVID-19 vaccination period). Our results show a negative impact of the COVID-19 pandemic on bank profitability, especially at the onset of the health crisis. In addition, we find that vaccination against COVID-19 had a positive effect on bank profitability, not yet sufficient to compensate for the losses generated at the beginning of the pandemic. Finally, we show that these effects depend on the characteristics of banks (notably size and capital) before vaccination and on the severity of the crisis across countries. Overall, we provide the first evidence of the influence of vaccination on bank behavior in terms of profitability.

In this paper, we document that living under Communism versus Capitalism has lasting effects on preferences for a strong government. Relying on the natural experiment of German reunification and extending the analysis of Alesina and Fuchs-Schündeln (2007), we show that East Germans still have stronger preferences for redistribution than West Germans 27 years after reunification. While convergence of preferences occurs, the speed of convergence decreases significantly over time. Evidence from cohorts born after German reunification points towards significant intergenerational transmission of preferences.