Rupert Sausgruber

A Little Fairness May Induce a Lot of Redistribution in Democracy

We use a model of self-centered inequality aversion suggested by Fehr and Schmidt (1999) to study voting on redistribution. We theoretically identify two classes of conditions when an empirically plausible amount of fairness preferences induces redistribution through referenda. We test the predictions of the adapted inequality aversion model in a simple redistribution experiment, and find that it predicts voting outcomes far better than the standard model of voting assuming rationality and strict self-interest.

Honesty on the Streets - A Natural Field Experiment on Newspaper Purchasing

A publisher uses an honor system for selling a newspaper in the street. The customers are supposed to pay, but they can also pay less than the price or not pay at all. We conduct an experiment to study honesty in this market. The results show that appealing to honesty increases payments, whereas reminding the customers of the legal norm has no effect. Furthermore, appealing to honesty does not affect the behavior of the dishonest. These findings suggest that some people have internalized an honesty norm, whereas others have not, and that the willingness to pay to obey the norm differs among individuals. In a follow-up survey study we find that honesty is associated with family characteristics, self-esteem, social connectedness, trust in the legal system, and compliance with tax regulations.

Voting on Thresholds for Public Goods: Experimental Evidence

Introducing a threshold in the sense of a minimal project size transforms a public goods game with an inefficient equilibrium into a coordination game with a set of Pareto-superior equilibria. Thresholds may therefore improve efficiency in the voluntary provision of public goods. In our one-shot experiment, we find that coordination often fails and exogenously imposed thresholds are ineffective at best and often counter-productive. This holds under a range of threshold levels and refund rates. We test if thresholds perform better if they are endogenously chosen, i.e. if a threshold is approved in a referendum, because voting may facilitate coordination due to signaling and commitment effects. We find that voting does have signaling and commitment effects but they are not strong enough to significantly improve the efficiency of thresholds.

When to Coalesce: Early Versus Late Coalition Announcement in an Experimental Democracy

In multi-party democracies, several parties usually have to join together in coalition to form government. Many aspects of that process have been fairly fully investigated, others less so. Among the latter is the timing of the formation and announcement of coalitions.While the dominant popular image may be one of parties meeting together after the election to hammer out a coalition agreement, pre-election coalitions of one sort or another are actually quite common. In almost half of the elections in OECD (Organization for Economic Co-operation and Development) countries since the Second World War, at least one pair of parties had pre-announced their intention to join together in government. A quarter of governments formed were based wholly (and another quarter in part) on pre-election agreements.To date, such studies as there have been of pre-election coalitions have concentrated primarily on system-level explanations – features of the electoral system (majoritarian or proportional, and so on) that make such arrangements more or less likely.3 Here we shall instead look more at the agent-level logic of ‘early’ (pre-election) versus ‘late’ (post-election) coalition formation, from the point of view of voters and parties.hypotheses concerning coalition timingIn the tradition of Downs and Riker and their coalition-theorist progeny, we shall assume that voters are interested primarily in getting policies adopted which are close to their ‘ideal points’ in policy space, and that parties are interested primarily in winning office to implement policies as close as possible to their ‘ideal points’ in policy space. That leads parties to strive for ‘minimal connected winning coalitions’: ‘connected’ in the sense that they link parties adjacent in policy space; ‘minimal’ in the sense that they involve the partys sharing power with the fewest parties backed by fewest voters that it can and still win.

Tax Salience, Voting, and Deliberation

Tax incentives can be more or less salient, i.e. noticeable or cognitively easy to process. Our hypothesis is that taxes on consumers are more salient to consumers than equivalent taxes on sellers because consumers underestimate the extent of tax shifting in the market. We show that tax salience biases consumers’ voting on tax regimes, and that experience is an effective de-biasing mechanism in the experimental laboratory. Pre-vote deliberation makes initially held opinions more extreme rather than correct and does not eliminate the bias in the typical committee. Yet, if voters can discuss their experience with the tax regimes they are less likely to be biased.

Entitlements and Loyalty in Groups: An Experimental Study

We study the role of performance differences in a task requiring cognitive effort on in-group bias. We show that the in-group bias is strong in groups consisting of high-performing members, and it is weak in low-performing groups. This holds although high-performing subjects exhibit no in-group bias as members of minimal groups, whereas low-performing subjects strongly do. We also observe instances of low-performing subjects punishing the in-group favoritism of low-performing peers. The same does not occur in high-performing or minimal groups where subjects generally accept that decisions are in-group biased.

Die Elastizität des steuerbaren Einkommens: Konzept und Evidenz aus Österreich

Geruchten nach sas Arthur B. Laffer (damals Professor an der Universitat Chicago) im Dezember 1974 bei einem Abendessen mit Donald Rumsfeld (Stabschef im Weissen Haus unter President Gerald Ford), Dick Cheney (Rumsfelds Stellvertreter) und Jude Wanniski (Mitherausgeber des Wall Street Journal). Bei dieser Gelegenheit hat er den Zielkonflikt zwischen dem Aufkommen einer Steuer und dem Steuersatz auf einer Serviette dargestellt (vgl. Laffer 2004). Dieser spater als „Laffer-Kurve“ bekannt gewordene Zusammenhang vermittelt die grundlegende Einsicht, dass Individuen auf Veranderungen der Steuerbelastungen durch Verhaltensanpassungen reagieren. Im Extremfall sind diese Reaktionen so stark, dass eine Anhebung der Steuerbelastung zu keiner weiteren Erhohung, ja sogar zu einem Sinken des Steueraufkommens fuhren kann. Dieses Argument bildet die Grundlage der angebotsorientierten Okonomik, deren Einfluss auf wirtschafts- und steuerpolitische Reformdebatten aus heutiger Sicht nicht mehr wegzudenken ist.