Contributions to the Yearbook of the Max Planck Society


  • What Do We Mean by „Inflation”?

    2022 Martin F. Hellwig
    The essay criticizes the idea that the word “inflation” refers to a single phenomenon that is accessible to theorizing. It stresses the need to distinguish between price adjustments induced by one-time changes in underlying economic data and inflation processes based on feedback mechanisms between market developments and public policy, fiscal and monetary. Developments in 2021 and 2022 reflect supply side effects. The policy challenge is to avoid generating a self-sustaining inflationary dynamic.


  • If others abide by the rule, I follow suit

    2021 Engel, Christoph
    To a surprising degree, individuals are willing to follow rules just because they are in force. This even holds for patently arbitrary rules. But there is a catch. The more of her peers violate the rule, the more the average individual is inclined to do the same. This suggests that rule following is a precious resource for governing society, but that this resource requires vigilance.


  • Intervention against others’ norm violations under ambiguity

    2020 Baumert, Anna
    “Zivilcourage” is highly socially desirable in democratic societies, yet a lack thereof is often deplored. Systematic investigations paint strikingly different pictures on the prevalence of courageous interventions against others’ norm violations – depending on the methodological approach. The Research Group “Moral Courage” investigates psychological antecedents and barriers of this kind of behaviour. Our studies have shown that the ambiguity of a norm violation can be a strong inhibiting factor. However, some people incur costs to reduce ambiguity, and take informed decisions to intervene.


  • How social norms shape our culture of debate

    2019 Winter, Fabian
    Hate speech is a dominant topic in social media, both as a rhetorical tool as well as an object of debate. The Research Group "Mechanisms of Normative Change" at the Max Planck Institute for Research on Collective Goods studies the conditions of its emergence and change as well as the influence of social norms on its prevalence.


  • How do equal opportunities on labor markets relate to gender differences in the willingness to compete? Insights from behavioral economics

    2018 Sutter, Matthias
    Gender differences in the willingness to compete may contribute to differences in wages and career advancement of men and women. Policy interventions, such as quotas, come with unintended side-effects. Loukas Balafoutas, Helena Fornwagner and I have proposed priming subjects with power as an instrument to contain gender differences in the willingness to compete. We show that priming with high power closes the gender gap, in particular because it makes competition entry decisions more realistic and reduces the level of risk tolerance among male participants.


  • Why does creativity need the law?

    2017 Engel, Christoph
    Why does creativity need the law? US law believes: because authors would otherwise be starving. Continental law counters: because authors care about recognition. Consequently Continental law not only empowers authors to sell their works. It also protects moral rights, like the right to be named. In a field experiment, only a minority of photographers are willing to give up moral rights.


  • What do judges have to count (on)? Empirical realities in the legal system

    2016 Hamann, Hanjo

    In Continental Europe, traditional legal thinking is rather remote from empirical research and statistics. Nonetheless lawyers have been trying for more than one hundred years to fuse knowledge about society’s “is’s and oughts”. Their attempts had to continuously adapt to changes in the dominant intellectual paradigms, and are now framed as discursive argumentation about different normatively infused descriptions of the world. As such, empirical discourse is indispensable for the law and will shape legal education in the future. Complex legal realities require statistical legal thinking.


  • Financial stability and government bonds

    2015 Luck, Stephan; Schempp, Paul

    Banks typically grant long-term loans, but their liabilities are short-term. While this maturity transformation is one of the main features of banks, it also constitutes a major risk factor. A research project at the Max Planck Institute for Research on Collective Goods shows that a strong government can reduce the refinancing risk of banks by providing them with government bonds. In case of countries that are financially interconnected, all parties might benefit if the strong country protects weaker ones by forming a banking union.


  • The cognitive processes involved in decisions in social dilemmas

    2014 Fiedler, Susann
    Little is known about the underlying processes of cooperative behavior in social dilemmas. By using eye-tracking a project at the Max-Planck-Institute for Research on Collective Goods shows that differences in social preferences are accompanied by consistent differences in information search. Decision time, number of fixations, the proportion of inspected information, the degree of attention towards the others’ payoffs, and the number of transitions from and towards others’ payoffs gradually increase with absolute deviation from a pure selfish orientation.


  • Brave new privacy: Information disclosure in networked publics

    2013 Hermstrüwer, Yoan
    Individuals who disclose personal information often willingly accept an increase of social pressure. Monetary rewards from giving one’s consent to the disclosure of personal information can be interpreted as a compensation for the behavioral restraints resulting from increased social pressure. At the same time, only few people seem to care whether personal information is permanently stored. Only few people actually make use of a right to be forgotten, if they are not nudged to do so.


  • The bankersʼ new clothes: On the role of capital requirements for banks

    2012 Hellwig, Martin

    The comprehensive reform of banking regulation that was promised in the financial crisis has not been undertaken. Yet, society as a whole has an interest in using regulation to limit borrowing by banks. The determination of banks’ indebtedness and default risks cannot just be left to the banks and their creditors. The arguments that the industry puts forward against higher equity requirements are shown to be fundamentally flawed.


  • The Logic of Conviction

    2011 Schweizer, Mark
    German civil procedural law states that a judge freely forms his or her conviction on the truth of disputed factual statements. When assessing the facts of a case, a judge must hold a number of partial beliefs at the same time, some of which may be dependent on each other. So called Bayes Nets allow a graphic display of these partial beliefs and their (in)dependencies. The use of Bayes Nets forces coherence of the partial beliefs in the sense of subjective probability theory and allows testing how various assumptions influence the judge’s conviction.


  • Skillful gambling

    2010 Towfigh, Emanuel; Glöckner, Andreas
    German law on gambling mainly rests on the differentiation between games of skill and games of chance. Games of chance are part of regulation and in fact monopolized, whereas skill games can also be offered by private providers. With regards to sports bets this differentiation might not be reasonable and needs to be questioned. Maybe reference to the danger of the game is a more appropriate criterion.


  • How to Enforce Tax Compliance: Moral Appeals, Social Information or Legal Threats?

    2009 Traxler, Christian
    How should modern society fight the evasion of taxes and fees? The economic model suggests that we should set proper incentives by threatening with (and implementing) fines and legal sanctions. But does this approach work? Could we design alternative and probably more successful policies that rely on moral appeals and social norms? A natural field experiment of the Max Planck Institute for Research on Collective Goods in the domain of TV license fee evasion tries to answer these questions.


  • Rebates: Harmful or Beneficial – But Always Alluring

    2008 Morell, Alexander
    Competition authorities suspect that certain rebates may lead to monopolization. Economic models show that rebates do not necessarily have negative effects on competition. They may even increase welfare. In the Lab consumers reacted to rebates they were offered in a different way than the economic models would expect them to. How can competition law account for these findings? Researchers at the Max Planck Institute for Research on Collective Goods seek after an adequate solution.


  • Intuitive and Deliberate Processes in Legal Decision Making

    2007 Glöckner, Andreas
    Professional decision makers like executives and judges are confronted with complex situations every day. This article presents decision strategies and problems in the practical application of probability theory and heuristics in legal decision making. It is argued that decision makers come to good decisions by efficiently combining intuitive and deliberate processes. An analysis of the code of criminal procedure reveals that legal institutions already support these processes.


  • The impact of state guarantees on banks’ risk-taking

    2006 Hakenes, Hendrik; Schnabel, Isabel
    Researchers at the Max Planck Institute for Research on Collective Goods argue that, contrary to conventional wisdom, state guarantees do not necessarily induce higher risk-taking at the protected banks. Furthermore, they point towards a risk-increasing effect of guarantees at the protected banks’ competitors. Empirical evidence supports both predictions: Protected banks do not take higher risks in reaction to state guarantees. In contrast, the evidence confirms that competitor banks are driven towards higher risk-taking.


  • The psyche of firms, associations and states

    2005 Engel, Christoph
    Psychology and experimental economics have taught us a lot about the behaviour of individuals. Yet in our social environment we rarely meet isolated individuals. We usually face corporate actors. This holds even more for government. Yet we know fairly little about the behaviour of corporate actors.


  • Should excludable public goods be financed by fees or by taxes?

    2004 Hellwig, Martin
    What role do taxes and user fees play for public goods finance? If a public good is excludable, one can charge a user fee and exclude anybody who fails to pay the fee. If the enjoyment of the public good by an additional person entails no costs, this exclusion is inefficient. However, the inefficiency must be compared to the inefficiencies induced by other financing instruments such as income tax. Research results of the Max Planck Institute for Research on Collective Goods show that, under incomplete information about individual preferences for public goods and about labour productivity levels, an optimal incentive mechanism will make use of all available financing instruments and thereby minimize overall efficiency loss. The optimal mix of instruments satisfies a version of the “elasticities rule” of public sector pricing.


  • Framework conditions within constitutional law for contractual cooperation between state and society in the area of parliamentary legislation

    2003 Becker, Florian
    The modern state attempts to manage its expanding tasks by integrating private parties into state functions. In this context private parties also participate in legislation. They do so, for example, by taking part in parliamentary hearings as experts and interest groups, but also by concluding legislative contracts with the state. In contrast to the generally held view these contracts are not necessarily invalid. And, taking into account the principle of the protection of confidence guaranteed by our constitution, contracts of this kind may bind the parliamentary legislator.
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