Portail HAL Paris School of Economics (PSE)
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Commitment to the truth creates trust in market exchange: Experimental evidence
No full textInternational audienceUnder incomplete contracts, the mutual belief in reciprocity facilitates how traders create value through economic exchange. Creating such beliefs among strangers can be challenging even when they are allowed to communicate, because communication is cheap. In this paper, we first extend the literature showing that a truth-telling oath increases honesty to a sequential trust game with pre-play, fixed-form, and cheap-talk communication. Our results confirm that the oath creates more trust and cooperative behavior thanks to an improvement in communication; but we also show that the oath induces selection into communication -it makes people more wary of using communication, precisely because communication speaks louder under oath. We next designed additional treatments featuring mild and deterrent fines for deception to measure the monetary equivalent of the non-monetary incentives implemented by a truth-telling oath. We find that the oath is behaviorally equivalent to mild fines. The deterrent fine induces the highest level of cooperation. Altogether, these results confirm that allowing for interactions under oath within a trust game with communication creates significantly more economic value than the identical exchange institutions without the oath
The Making of Civic Virtues: A School-Based Experiment in Three Countries
No full textThis paper shows that schools can foster the transmission of civic virtues by helping students to develop concrete, democratically chosen, collective projects. We draw on a RCT implemented in 200 middle schools in three countries. The program leads students to conduct citizenship projects in their communities under the supervision of teachers trained in the intervention. The intervention caused a decline in absenteeism and disciplinary sanctions at school, alongside improved academic achievement. It also led students to diversify their friendship network. The program has stronger effects when implemented by teachers who are initially more involved in the life of the school
Does universalization ethics justify participation in large elections?
No full textWhat drives voters’ decisions to participate in large elections under costly voting, despite the rational expectation that this has no impact on the outcome? We propose a new model of ethical voters, by positing that they have Kantian or semi-Kantian preferences. With such preferences, voters evaluate their behavior in light of what the outcome would be, should a fraction of the other voters choose the same course of action. The “other voters” can be either the entire population (“non-partisan ethics”) or the individuals with same interest (“partisan ethics”). In a model with two candidates and a continuum of voters, we find that turnout is strictly positive as soon as the evaluation by the voters of the political outcome is not strictly of the “winner-take-all” kind. Moreover, the equilibrium turnout rates depend on the specifics of the election at hand, such as the relative stake of the election for the two supporter groups and the presence of core constituent groups
S’accommoder d’injonctions paradoxales pour préserver sa santé sexuelle. De l’inégalité entre hommes demandant l’asile au motif de l’orientation sexuelle
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Pollution diffusion, limited production factors, non-monotonic growth and the emergence of spatially heterogeneous steady states
No full textWe develop a spatial growth model for an agricultural economy where pollution diffuses in the soil. At each location, the only production factor is fertile soil, which is at the same time naturally bounded by the amount of available land, and eventually exposed to pollution diffused from neighboring locations. We develop a novel technique to obtain the policy maker’s optimal solution, which is analytical in the case of an homogeneous economy and covers all cases, for impatience rates ranging from almost zero to extremely high. When agents are very patient, the policy maker starts by making fully fertile all land before allowing for positive consumption. For slightly more impatient agents, the policy maker will allow for some consumption from the beginning, in the cleaning-up stage. With time, abatement stops, consumption raises and land becomes fully polluted in the long-term. We provide with some general results for the general spatially heterogeneous economy and its long-run, completing our study with some numerical exercises. Worth noting, simulations reveal that also in the non-homogeneous economy optimal consumption may transit through four different stages in time, responding to changes in fertile land and not necessarily in a smooth manner
Evaluer les effets distributifs de la croissance à partir de données en coupe transversales ou de panel
No full textInternational audienceWe study decennial anonymous and non‐anonymous growth incidence curves in the United States during the past 50 years. The former show income growth by quantile independent of initial incomes and are typically upward sloping, reflecting increasing inequality. The latter are conditional on initial ranks and are flat or downward sloping. This suggests distributional neutrality of growth when accounting for initial income positions. We explain this difference by decomposing the non‐anonymous curves into mobility and shape components. The former is always downward sloping, whereas the latter is upward sloping in periods of increasing inequality. Thus, flat non‐anonymous curves can be observed even with increasing inequality. We exploit the decomposition to show that the slope of non‐anonymous curves in the United States is determined by the evolution of cross‐sectional income distributions. This enables inferring the shape of non‐anonymous curves from cross‐sectional data and test them for a generalized pro‐poorness social welfare criterion
Automation, global value chains and functional specialization
No full textInternational audienceWe study how technology adoption and changes in global value chain (GVC) integration jointly affect labor shares and business function specialization in a sample of 14 manufacturing industries in 14 European countries in 1999–2011. Increases in upstream, forward GVC integration directly reduce labor shares, mostly through reductions in fabrication, but also via other business functions. We do not find any direct effects of robot adoption; robotization affects labor only indirectly, by increasing upstream, forward GVC integration. In this sense robotization is “upstream-biased”. Rapid robotization in China shaped robotization in Europe and, therefore, relative demand for labor there
Covid-19 and mobility: determinant or consequence?
No full textInternational audienceThis paper disentangles the relationship between COVID-19 propagation and mobility. In a theoretical model allowing mobility to be endogenously determined by the COVID-19 prevalence rate, we show that an exogenous epidemic shock has an immediate effect on mobility whereas an exogenous mobility shock influences epidemic variables with a delay. In the long run, exogenous disease contagiousness and mobility jointly shape epidemiological outcomes. The short-run theoretical result allows us to recover, empirically, the causal impacts of mobility and COVID-19 hospitalisations on each other in France. We find that hospitalisations are highly sensitive to mobility whereas mobility is little influenced by hospitalisations. In France, it seems therefore that voluntary social distancing would not have been effective to control the epidemic, in the absence of social distancing mandates
Pro-business arbitration with ISDS
No full textIn this paper, we investigate the Investor-State Dispute Resolution Settlement (ISDS) framework, which governs dispute resolution between foreign investors and host states in many bilateral and multilateral trade agreements. We show that ISDS delivers fair justice in a one-shot setting. In a repeated-interaction setting however, it is prone to collusion to the benefit of all parties except the host states. Three factors are determinant: First, the investors are the sole parties able to file cases; Second, arbitrators' earning prospects depend on the investors' filing cases; And finally, treaties leave substantial discretion to arbitration courts in their interpretation of treaties' provisions. We give conditions for pro-business collusion between investors and arbitrators to develop and we show how it makes it profitable for foreign investors to file high-stake claims against states in response to new environmental, social or health regulations. Further, we address regulatory chill and show how the fear of ISDS attacks can hold back welfare improving regulation in the host country. Finally, we extend the model to show how regulatory chill affect policy-making in other countries in which the investor operates with similar activities
Impacts of extreme weather events on mortgage risks and their evolution under climate change: A case study on Florida
No full textInternational audienceWe develop an additive Cox proportional hazard model with time-varying covariates, including spatio-temporal characteristics of weather events, to study the impact of weather extremes (heavy rains and tropical cyclones) on the probability of mortgage default and prepayment. We compare the survival model with a flexible logistic model and an extreme gradient boosting algorithm. We estimate the models on a portfolio of mortgages in Florida, consisting of 69,046 loans and 3,707,831 loan-month observations with localization data at the five-digit ZIP code level. We find a statistically significant and non-linear impact of tropical cyclone intensity on default as well as a significant impact of heavy rains in areas with large exposure to flood risks. These findings confirm existing results in the literature and also provide estimates of the impact of the extreme event characteristics on mortgage risk, e.g. the impact of tropical cyclones on default more than doubles in magnitude when moving from a hurricane of category two to a hurricane of category three or more. We build on the identified effect of exposure to flood risk (in interaction with heavy rainfall) on mortgage default to perform a scenario analysis of the future impacts of climate change using the First Street flood model, which provides projections of exposure to floods in 2050 under RCP 4.5. We find a systematic increase in risk under climate change that can vary based on the scenario of extreme events considered. Climate-adjusted credit risk allows risk managers to better evaluate the impact of climate-related risks on mortgage portfolios