Volkswirtschaftliche Fakultät - Digitale Hochschulschriften der LMU

This dissertation contains four separate studies in the fields of corruption and cooperation. The first chapter explicates the mechanism that links the fractionalization of society with its level of corruption within a theoretical model of relational contracting. The other three chapters describe experimental studies. The second and third chapters evaluate two popular anti-corruption policies, the ‘Four-Eyes-Principle’ and ‘Whistle- Blowing’, with respect to their effectiveness in decreasing the level of corruption and increasing social welfare. The last chapter considers the effect of endowment uncertainty on cooperative behaviour in a linear public goods game and explains it by specific conditional cooperation preferences.

Cooperation between decision-making agents is recognized as one of the single most important mechanisms in economic research and represents one of the cornerstones of economic development. Countless economic activities have been analysed with game theoretic models of cooperation. Experimental methods may not only demonstrate the deficiencies of standard economic theory in terms of explanation and predictive power, they may also help to improve existing models.

The public goods game (Isaac and Walker 1988) represents one of the most popular vehicles to experimentally analyse cooperative behaviour. It models the dilemma of the opposition between selfish preferences and social efficiency. Numerous experiments have shown that participants behave in a highly cooperative way in situations for which the standard economic theory of rational payoff maximization predicts strictly selfish behaviour. In my view, the most convincing approach to explaining the phenomenon of cooperation is the existence of conditional cooperative behaviour. This links the public goods game to games that are specifically designed to analyze trust and reciprocity, e.g. the gift exchange game (Fehr et al. 1993), the investment game (Berg et al. 1995) and the ultimatum game (Güth et al. 1982). Applications of these games even extend to criminal activities such as corruption. Administrative corruption, defined as ‘the misuse of public power for public gain’ (Klitgaard 1988) is recognized as the ‘single most important obstacle to economic development’ (The World Bank 2008). The key to effective anti-corruption policy with respect to institutional design is the understanding of the determinants, mechanisms and weaknesses of corruption. This demands the analysis of two different levels of cooperation common to most corrupt transactions. Since any corrupt relationship is by definition illegal, the corrupt partners cannot rely on legal third parties, i.e. the courts, to enforce their contracts. The transaction between a client and a corrupt official depends on trust and reciprocity which may be fostered for example by repeated interaction. This kind of cooperation is similar to the mechanism modelled in the gift exchange game. In contrast to the original gift exchange game, where cooperation is efficient with respect to social welfare (measured e.g. in the sum of payoffs to all affected individuals), corrupt reciprocity is socially undesirable due to the reasonable assumption of its strong negative externality to the public (Shleifer and Vishny 1993, Rose-Ackermann 1999). In the case of instable corruption, it would be socially optimal for all agents to stay away from reciprocity and cooperation, and adhere to their selfish rationality. The situation involving all members of a society with respect to their choices for or against corrupt reciprocity can hence be seen as a reverse public goods dilemma in a broader sense. The first chapter focuses on the role of the fractionalization of a society in determining the level of corruption. In a series of empirical cross-country studies social fractionalization, often (crudely) measured by the Ethno-Linguistic Fractionalization Index (ELF, see Appendix 1A) has been identified as an important determinant o

This thesis consists of 4 chapters in the field of applied microeconomics.

Chapter 1 develops a model of international roaming. International alliances emerge endogenously and serve as a commitment device to soften competition on the retail market.

Chapter 2 provides an explanation for why political leaders may want to adopt ideological positions. Because voters expect the perceived ideology of office holders to determine their future political actions, politicians are tempted to act according to their ideology.

Chapter 3 analyzes a procurement problem in which two specialized agents compete for selling a good. The optimal procurement scheme trades off increasing the buyer’s chances to obtain a suitable product against reducing the sellers’ rents.

Chapter 4 compares certification to a minimum quality standard (MQS) policy when some consumers cannot discern the quality of the offered goods. Depending on the proportion of informed customers, either instrument may be preferred.

This dissertation consists of four chapters, which are self-contained and can be read independently of each other. In Chapter 1, we analyse services trade liberalisation, which is a prerequisite for international production networks to arise. In particular, we study the determinants of services liberalisation undertaken by countries under the General Agreement on Trade in Services (GATS) of 1995. In Chapters 2-4, we analyse different aspects of the patterns of trade in intermediates. In Chapter 2, we assess the determinants of bilateral trade in intermediate goods and services. In Chapter 3, we investigate the role of institutions and transport infrastructure as sources of comparative advantage for intermediate goods. In Chapter 4, we study trade in intermediates in the context of the activities of multinational enterprises by assessing the determinants of the share of intra-firm trade in total trade of intermediates.

The wide use of full-cost pricing techniques remains an explanandum in both economics and management accounting theory. This work surveys and develops possible theoretical explanations of this industrial pricing behaviour and analyses some of its implications. By recognition of the widespread use of imperfect cost-plus pricing heuristics, observable pricing behaviour, as well as empirical market-level phenomena, can be explained.

Furthermore, methodological aspects of marginalist price theory are discussed and brought into connection with the meager contemporary interest of most economists in the important phenomenon of full-cost pricing.