Felix J. Bierbrauer

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We modify the principal-agent model with moral hazard by assuming that the agent is expectation-based loss averse according to K˝ oszegi and Rabin (2006, 2007). The optimal contract is a binary payment scheme even for a rich performance measure, where standard preferences predict a fully contingent contract. The logic is that, due to the stochastic(More)
We analyze the effects of ostracism on cooperation in a linear public good experiment with fixed partner design. Our results show that introducing ostracism increases contribution levels significantly except in first and last periods. Despite reductions in group size due to ostracism, the net effect on earnings is positive. This effect is in contrast to(More)
(DFG) is gratefully acknowledged (SFB-TR 15). Errors are mine. Abstract This paper studies sabotage in tournaments with at least three contestants, where the contestants know each other well. Every contestant has an incentive to direct sabotage speci…cally against his most dangerous rival. In equilibrium, contestants who choose a higher productive e¤ort are(More)
a r t i c l e i n f o a b s t r a c t JEL classification: D82 H21 H87 Keywords: Income tax competition Labor mobility Optimal income taxation Race to the bottom Tax competition between two governments who choose nonlinear income tax schedules to maximize the average utility of their residents when skills are unobservable and labor is perfectly mobile is(More)
We study political competition in a simple Mirrleesian model of income taxation. The analysis is made tractable by exploiting the mechanism design formulation of the Mirrleesian problem. We consider basic variants of the Downsian model such as vote-share maximizing politicians, a winner-take-all system, and competition among politicians who differ in a(More)
We study the interdependence of optimal tax and expenditure policies. An optimal policy requires that information on preferences is made available. We first study this problem from a general mechanism design perspective and show that efficiency is possible only if the individuals who decide on public good provision face an own incentive scheme that differs(More)
FINANCIAL ECONOMICS and INTERNATIONAL MACROECONOMICS. Any opinions expressed here are those of the author(s) and not those of the Centre for Economic Policy Research. Research disseminated by CEPR may include views on policy, but the Centre itself takes no institutional policy positions. The Centre for Economic Policy Research was established in 1983 as an(More)