We test the hypothesis that smiles perceived as honest serve as a signal that has evolved to induce cooperation in situations requiring mutual trust. Potential trustees (84 participants from Toulouse, France) made two video clips averaging around 15 seconds for viewing by potential senders before the latter decided whether to ‘send’ or ‘keep’ a lower stake (4 euros) or higher stake (8 euros). Senders (198 participants from Lyon, France) made trust decisions with respect to the recorded clips. If money was sent to the trustee, stakes were tripled and trustees could decide to keep all, two thirds or one half of the tripled stakes. Clips were further rated concerning the genuineness of the displayed smiles. We observe that smiles rated as more genuine strongly predict judgments about the trustworthiness of trustees, and willingness to send them money. We observe a relation between costs and benefits: smiles from trustees playing for higher stakes are rated as significantly more genuine. Finally, we show that those rated as smiling genuinely return more money on average to senders. An increase of one standard deviation in rating of smile genuineness is associated with an unconditional expected gain of about one dollar and thirty cents to senders in the two trials of the experiment. Potential gains for senders could be significantly increased from taking smiles rated as genuine into accoun

In this paper we show how the investment in cultural events may encourage the building of social capital and foster the development of local communities. We rely on a casestudy that we conducted about the socioeconomic impact of the Festival "La Notte della Taranta", the most important European music festival dedicated to traditional music (about 170.000 participants per year), on the sub-region of southern Italy where it is held. Our evidence is based on a large survey, consisting of nearly 10.000 interviews to Festival participants over a span of five editions (2007-2011). A primary result is that the initial economic investment in the Festival has brought a short-term return in terms of touristic attraction worth more than two times as much. More importantly, our results indicate that a cultural festival, despite being a mass gathering, is able to create strong bonds among its participants and between them and the area where the event takes place. Although these bonds are "instantaneous", i.e. temporally restricted to the duration of the event, they are positively correlated with the economic impact of the event on the territory.

We study an electronic over-the-counter (OTC) market, in which each agent looks for the best counterpart through bilateral negotiations. We compare its performance with the standard electronic double-auction (DA) market, in which traders post their quotes publicly. We show that the lack of information in the OTC market induces an efficiency loss, characterized by an average closing price below the competitive price and by a traded quantity below the competitive quantity. We further test the robustness of these findings when exogenous shocks modify the competitive equilibrium. Among other things, we show that supply shocks increasing the competitive quantity improve OTC's efficiency

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We present a review on the implementation of regularization methods for the estimation of additive nonparametric regression models with instrumental variables. We consider various versions of Tikhonov, Landweber-Fridman and Sieve (Petrov-Galerkin) regularization. We review data-driven techniques for the sequential choice of the smoothing and the regularization parameters. Through Monte Carlo simulations, we discuss the finite sample properties of each regularization method for different smoothness properties of the regression function. Finally, we present an application to the estimation of the Engel curve for food in a sample of rural households in Pakistan, where a partially linear specification is described that allows one to embed other exogenous covariates.