Entrance MPI
Many goods are not obviously best provided by unregulated markets. This does not necessarily imply that government does a better job. But research can do society a service in defining why markets have a hard time with some goods, and in comparing institutional arrangements aiming at their provision. In a precise way, the problem is defined by the concept of public goods. Capitalising on the theory of mechanism design, it can be further improved. Using experimental methods, it can be put into perspective. Yet some social dilemmas are better analysed in alternative categories. It may even be preferable to start analytically from the political decision to intervene into markets. The institute tackles these questions from the combined perspectives of economics, law and psychology. While the institute started with applications from environmental problems, current work focuses on antitrust, regulation and financial stability.

Mit vielen Gütern kommen Märkte nicht gut zurecht. Dies bedeutet jedoch nicht unbedingt, dass Regierungen es besser machen. Die Wissenschaft kann der Gesellschaft einen Dienst erweisen, indem sie herausarbeitet, warum Märkte sich mit manchen Gütern schwertun, und indem sie institutionelle Arrangements vergleicht, die der Bereitstellung dieser Güter dienen. Das Problem wird durch das Konzept der öffentlichen Güter präzise definiert; durch die Theorie des Mechanismus-Design kann die Definition des Problems verfeinert, mit Experimenten kann sie in Perspektive gerückt werden. Manche sozialen Dilemmata versteht man aber besser in alternativen Kategorien. Womöglich ist es gar besser, analytisch bei der politischen Entscheidung anzusetzen, in die Märkte einzugreifen. Das Institut arbeitet an diesen Fragen interdisziplinär, aus der Sicht von Ökonomie, Recht und Psychologie. Seine Arbeit begann mit Fragen des Umweltschutzes. Heute sind Kartellrecht, Regulierung und die Stabilität der Finanzmärkte die wichtigsten Anwendungsfelder.

News

June 2018

The 36th Conference on Institutional and Theoretical Economics (JITE-Conference), organized by Christoph Engel and Urs Schweizer, took place in Florence

There is strong resistance against the commercialization of some goods and services. If a person holding public authority sells her decisions, this is regarded as corruption. Most countries are also opposed against selling organs, university admission, or opportunities to clerk with prestigious courts. Yet decisions have to be made, and frequently demand exceeds supply. How can these decisions be made convincingly? Over the last decades, attempts at allocating goods or services without the help of money have become an active area of research in economics, under the label of matching. The legal community has taken fairly little notice of this development. This interface is the topic of the symposium.

Main contributions by: 
Peter Cramton, Ernan Haruvy, James Hathaway, Daniel Ho, Kimberley Krawiec, Justin McCrary, Joshua Mitts
 
June 13, 2018

© Peter Vogel / MPG Pascal Langenbach was honored with the Otto Hahn Medal for his extraordinary research on the experimental proof that being heard before the issue of an administrative ruling increases acceptance.

June 11, 2018