[cid:image002.png@01CEBF6B.D0B28790] VIENNA JOINT ECONOMICS SEMINAR INVITATION The University of Vienna and the Institute for Advanced Studies cordially invite you to the following Vienna Joint Economics Seminar <http://www.ihs.ac.at/vienna/resources/Economics/Papers/20130226_Paper_Zimmermann.pdf> Thursday, November 3, 2016 University of Vienna, Oskar-Morgenstern-Platz 1, 1090 Vienna, Skylounge, 12th floor 4:00 pm Rudolf Kerschbamer<https://www.uibk.ac.at/economics/personal/kerschbamer/> and Rachel Griffith<http://personalpages.manchester.ac.uk/staff/rachel.griffith/> University of Innsbruck University of Manchester Why did he do that? Isolating the relative importance of different conditional motivations for second-mover behavior in two-player two-stage games (Rudolf Kerschbamer) The talk will be based on two papers: The paper "What is trustworthiness and what drives it?" experimentally isolates the impact of various combinations of the following motives on trustworthiness: (i) unconditional other-regarding preferences; (ii) vulnerability-responsiveness; (iii) deal-responsiveness; and (iv) gift-responsiveness. The main result is that - besides unconditional other-regarding preferences like altruism and inequality aversion - vulnerability-responsiveness is the most important driver for trustworthiness. Prompted by this finding the paper provides behavioral definitions of trust, trustworthiness, and trust-responsiveness based on revealed willingness to accept vulnerability and the response to it. An important difference to existing definitions is that the proposed ones allow trust to be present without generosity. paper jointly with James C. Cox and Daniel Neururer The paper "Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games." extends the revealed intentions approach to modeling intention-based preferences in three ways: First, it implements an elicitation protocol based on geometric representations of choice sets that facilitates collection of a large number of observations per subject. This produces data that can be used in statistical analysis at the level of individual subjects' responses. Secondly, the experimental design includes opportunity sets that can be used to identify the relative importance of several distinct combinations of motives for players' conditional other-regarding preferences. Thirdly, the data analysis integrates a representation of the equal-split fairness norm into the revealed intentions modeling approach. Principal findings are that the benevolence of second movers is motivated by first movers' choices that provide possibilities for second-mover gains (generosity) or possibilities for first mover losses (vulnerability) but not by efficiency concerns or aversion to violating trust. Second movers' choices are also found to be dependent on the equal-split norm. paper jointly with Yola Engler and Lionel Page and Alcohol tax design (Rachel Griffith) We study optimal taxation in the alcohol market. We allow for marginal externalities that vary with total ethanol demand, and therefore across consumers, and we consider consumer demand over the differentiated products in the market. We show that differentiating tax rates across alcohol products can improve on the Diamond (1973) optimal tax rate applied to ethanol. The product level system exploits correlation in consumers' demands for individual products with their overall ethanol demand. By specifying and estimating an empirical model of consumer behaviour in the market we use our optimal tax results to numerically solve for the optimal system. We find that moving to an optimal system that differentiates rates across different alcohol types (allowing, for instance, for different rates on vodka, gin, ale and so on) would close 49% of the welfare gap between the UK system and the first best. paper jointly with Martin O'Connell and Kate Smith We are looking forward to seeing you! 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