Search results

The act of consolidating multiple parcels of land to form a single larger parcel is known as land assembly. Laboratory experiments have enabled researchers to explore how various factors, environments, and institutions hinder or assist the aggregation process. This chapter surveys the experimental literature and highlights the experimental design used in those studies, as well as their main findings.

The authors use laboratory experiments to test two self-assessment tax mechanisms for facilitating land assembly. One mechanism is incentive compatible with a complex tax function, while the other uses a flat tax rate to mitigate implementation concerns. Sellers publicly declare a price for their land. Overstating its true value is penalized by using the declared price to assess a property tax; understating its value is penalized by allowing developers to buy the property at the declared price. The authors find that both mechanisms increase the rate of land assembly and gains from trade relative to a control in which sellers’ price declarations have no effect on their taxes. However, these effects are statistically insignificant or transitory. The assembly rates in our self-assessment treatments are markedly higher than those of prior experimental studies in which the buyer faces bargaining frictions, such as costly delay or capital constraints.

The present chapter analyzes land inequality's role in expanding mass literacy between North and South America. According to the central claims, countries with low land inequality, organized in family farms linked to commercial elites, such as the United States, have consistently shown higher literacy levels than latifundia countries with high land inequality and landed elites, such as Latin American countries, where literacy has tended to be blocked. To analyze this hypothesis, a new and original database of landginis, large holding ratio, and illiteracy rates has been calculated from the original censuses of each country, offering the most extensive collection of data on land inequality and literacy for America in this period. By employing panel ordinary least squares, fixed and random effects approach, it is found that, historically, countries with higher land inequality and latifundia systems had worse literacy levels. Nevertheless, not all Latin American countries had latifundia systems, high land inequality, and high illiteracy.

Furthermore, in the United States, some states had higher levels of land inequality and illiteracy than some Latin American regions. Moreover, the results suggest that land inequality accentuated illiteracy more among adults than younger ones. Land inequality acted as a barrier to literacy.

Law enforcement agents enforce rules that they might transgress in their private lives. Building from a theory of “hypocrisy aversion” where agents incur psychological costs from imposing a sanction on others for rules that they might break, the authors design a two-player game in which players are simultaneously placed in the roles of enforcer and potential transgressor. In this model, discretionary enforcement is endogenous to the size of the sanction. Conditional on rewards to enforcement and punishment that are both sufficiently small in the status quo, the authors demonstrate that price effects can be dominated by second-order hypocrisy effects, leading to rates of transgression that increase with larger sanctions. The authors test the model within a laboratory experiment where individuals can simultaneously gamble at the expense of a third party and punish those they observe gambling. Examining the comparable testable predictions of models of (i) selfish agents, (ii) pro-social agents, and (iii) pro-social agents who are averse to hypocrisy, the authors find evidence of hypocrisy aversion in the rates of gambling, sanctioning, and the changing composition of agent strategies. Our results suggest that increasing sanctions can backfire in the deterrence of common criminal and non-criminal offenses.

In this chapter, the authors conduct a robustness study for the classic experimental results of Lynch, Miller, Plott, and Porter (1986, 1991). The authors find strong support for the original hypotheses in an updated experimental marketplace, consisting of dichotomous product qualities, non-binding signals of product quality, fixed seller identifiers, and an end-point design of deliberate ambiguity. The authors show that fixed identifiers alone are not sufficient devices to support efficient outcomes in these updated market conditions.

This experiment analyzes multi-offer versions of the signaling and screening litigation games, as well as a bilateral multi-offer litigation game. A plaintiff has either a low or a high claim on an uninformed defendant, and the two negotiate in an attempt to reach a pre-trial settlement. Trial is costly, and settlement generates surplus over which the two parties can bargain. In the signaling game, the defendant has the power to make the offer, while the plaintiff makes the offer in the screening game. Previous experiments on single-offer games find that disputes occur even when offers contain surplus not predicted under the theory, and fairness appears to be important in explaining deviations from theory. This research examines whether renegotiation in the form of successive sequential offers can yield efficiency gains via lower dispute rates. There are four main findings. One, under the one-sided multi-offer structure the excess dispute rate is 23 percentage-points lower in the screening game, and the high-offer dispute rate is 31 percentage-points lower in signaling game. The bilateral game yields an additional 15 percentage-point reduction in the high-offer dispute rate, but excess disputes persist. Two, in these games, proposers take advantage of the multi-offer opportunity and make around three to four offers per negotiation. Three, across games the surplus in a fair offer remains constant at about one-sixth of the surplus, but the empirical benchmark from which this is measured varies according to which player has the power to make the offer. In the one-sided games, the benchmark is the respective zero-surplus endpoint, but in the bilateral game the benchmark is the surplus midpoint. Fourth, dynamic behavior plays an important but complex role in observed outcomes. Multi-offer mechanisms may be alternatives to costly information transmission mechanisms like disclosure or discovery.

The European Marriage Pattern (EMP) was characteristic of preindustrial northwestern Europe and, in recent years, has been proposed as an important factor in the rise of the West. Yet, the origins and ultimate causes of the EMP remain obscure. We examine a novel hypothesis that the EMP can emerge in geographic environments with a lighter infectious disease burden. We overcome significant challenges facing empirical analysis of premodern societies. Using a large, individual-level database of marriages from the county of Kent, England, as well as a spatial regression discontinuity approach, we demonstrate a robust association between physical ecology and female age at first marriage (FAFM). We also find that the two potential channels proposed in the literature play starkly different roles in explaining our finding. Specifically, we fail to find that pastoralism plays any significant role in explaining the EMP, while the mortality rate channel accounts for a significant portion of the observed relationship between the disease environment and FAFM.