Standard economic theory assumes individual preferences to be fixed and exogenously given. This view has been challenged by numerous empirical observations. In reaction to those challenges, economic theory has been modified, mostly by including additional arguments into individuals’ utility functions. Among the approaches that tackle preference change are new consumer theory, habit formation, interdependent and status preferences, social and emotional influences, and reference point-dependent preferences. Hence, while standard economics largely abide by their assumption of stable preferences, an array of alternative approaches is now available to account for changing tastes. Some of these approaches are old and have been discussed in the literature for many decades while others are younger. However, all approaches have in common that they, in some cases surprisingly, have not made it to standard microeconomics textbooks. This survey aims at putting the approaches in perspective. For each of them, empirical evidence as well as methodological issues are discussed.
This study provides a comprehensive picture of experimental Kreps–Scheinkman markets with capacity choice in the first stage and subsequent price competition in the second. We conduct seven different treatments of such markets, varying the number of firms, demand rationing, subject matching, and subjects’ knowledge about the market mechanism. We find that only the number of firms has a persistent effect on capacity choices, whereas price choices are affected by both the number of firms and the rationing scheme. From the outset, subjects in the high-knowledge condition behave in the same way as subjects with low knowledge do in later periods after gaining experience. In all treatments, conduct is more competitive than the Cournot outcome, irrespective of the Nash equilibrium prediction. Nevertheless, the Cournot model does pack some predictive power. Under efficient demand rationing where the Cournot outcome is predicted, exact Cournot choices are more likely for both capacities and prices.
This paper investigates whether countries in the EU finance low tax rates by restrictive loss offset rules. As effects from intertemporal loss offset rules are difficult to anticipate, restrictions only marginally affect overall investments. In contrast, tax rates have a significant bearing on investment decisions. Therefore, the combination of low tax rates with restrictive loss offset rules can increase investments without affecting the tax revenue. Our analysis for the EU reveals that countries with low tax rates restrict loss offset possibilities while “high tax” countries allow an unlimited loss carryforward or even a loss carryback.
The Scandinavian countries of Denmark, Norway, and Sweden are similar in many respects, not least with regards to the basic administrative set-up: a non-federal task-related division between state, counties and municipalities. In all three countries, counties and municipalities raise a large share of their own revenue, which is then supplemented by government grants. In addition, central government redistributes large amounts of locally collected revenue between the municipalities and the counties respectively, severely hampering local budgetary autonomy. Tax matters are generally centralised, although local governments to a varying degree play a role in the collection of taxes as well as in the setting of local tax rates (usually on personal income and property). In Denmark, Norway, and Sweden alike, the administrative set-up has not been able to prevent a massive increase in local public expenditure in the latter part of the 20th century.Les pays scandinaves, Danemark, Norvège et Suède présentent des similitudes sur beaucoup de points et notamment sur le plan de lorganisation de la base administrative : une division sans relation utilitaire fédérale entre lEtat, les régions et les municipalités. Dans ces trois pays, les régions et les municipalités lèvent une large part de leurs propres revenus qui sont alors augmentés par les subventions du gouvernement.De plus, le gouvernement central redistribue de larges sommes de revenus collectés localement entre les municipalités et les régions respectivement, ce qui gêne sérieusement lautonomie budgétaire locale. Les questions fiscales sont généralement centralisées, bien que les gouvernements locaux, à des degrés divers, jouent un rôle dans la collecte des impôts aussi bien que dans la fixation des taux dimpositions locales (habituellement sur les revenus et la propriété). Au Danemark et en Norvège tout comme en Suède, lorganisation administrative na pas été capable de prévenir une augmentation massive des dépenses publiques locales dans les dernières années du 20ème siècle.