In controlled laboratory experiments with and without overlapping generations, we study the role of intergenerational altruism in public debt accumulation. Public debt is chosen by popular vote, pays for public goods, and is repaid with general taxes. We use an optimal control model to derive a theoretical benchmark. With a single generation, public debt is accumulated prudently. With multiple and over-lapping generations, the burden of debt and the risk of over-indebtedness are shifted to future generations. We find a weak but significant sign of intergenerational altruism, observing that the revealed debt preferences increase as the number of following generations decreases. However, we find considerably fewer intergenerational fairness concerns than one would expect on the basis of the behavioral and experimental literature. Instead, political debt cycles that vary with voters’ age emerge. Debt ceiling mechanisms fail to encourage intergenerational altruism and do not mitigate the problem of burden shifting.
This paper presents a novel, generic, and automatic method for data-driven site selection. Site selection is one of the most crucial and important decisions made by any company. Such a decision depends on various factors of sites, including socioeconomic, geographical, ecological, as well as specific requirements of companies. The existing approaches for site selection (commonly used by economists) are manual, subjective, and not scalable, especially to Big Data. The presented method for site selection is robust, efficient, scalable, and is capable of handling challenges emerging in Big Data. To assess the effectiveness of the presented method, it is evaluated on real data (collected from Federal Statistical Office of Germany) of around 200 influencing factors which are considered by economists for site selection of Supermarkets in Germany (Lidl, EDEKA, and NP). Evaluation results show that there is a big overlap (86.4 %) between the sites of existing supermarkets and the sites recommended by the presented method. In addition, the method also recommends many sites (328) for supermarket where a store should be opened.
Services are often provided by groups. The question of remuneration arises both at the group level and for each individual group member. We examine the question of how relative pay should be designed within the group if all group members are to regard the payment scheme as fair. We use a three-step laboratory experiment to compare which fairness norms are chosen by high-performing and low-performing group members. It turns out that both types of group members prefer the performance pay principle. Support for equal pay is negligible. However, the low performers use their bargaining power to improve their position, but without deviating from the performance principle substantially. A random influence on the performance of the players does not change the results.
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