Max Planck Institute for Research on Collective Goods

Max Planck Institute for Research on Collective Goods

Collective goods are goods that the markets have some difficulty in dealing with. This becomes particularly problematic when access to such goods is hard to restrict. Examples include air, water and soil, physical and virtual networks, infrastructures and the systemic effects of financial transactions. One of the services that science can render for society is to identify precisely where the problems lie with these goods and compare the institutional rules that regulate their availability. The Max Planck Institute for Research on Collective Goods in Bonn addresses these questions from an interdisciplinary perspective that combines economics, law and psychology. Whereas in the past the researchers were primarily concerned with environmental protection issues, the most important areas of application for the work today include cartel law, regulation and the stability of the financial markets.

Contact

Kurt-Schumacher-Str. 10
53113 Bonn
Phone: +49 228 91416-0
Fax: +49 228 91416-55

PhD opportunities

This institute has an International Max Planck Research School (IMPRS):
IMPRS on Adapting Behavior in a Fundamentally Uncertain World

In addition, there is the possibility of individual doctoral research. Please contact the directors or research group leaders at the Institute.

Clichés about nations govern our actions
How people from different countries cooperate with one another depends on their preconceptions about different nationalities more

Financial stability and government bonds

Forschungsmeldung June 14, 2016
Yearbook article 2016, Max Planck Institute for Research on Collective Goods
Authors: Stephan Luck and Paul Schempp more

Goals are essential

Forschungsmeldung October 31, 2012
Field study shows motivational effect of performance targets more
Stock markets can regulate themselves

Stock markets can regulate themselves

Forschungsmeldung August 17, 2011
A look at the history of the markets offers an insight into the effects of regulation on the success of initial public offerings more
Negative image of people produces selfish actions

Negative image of people produces selfish actions

Forschungsmeldung April 12, 2011
People's opinion of others determines how cooperative they are more

Blank Space

1/2014 On Location
Someone did quite a job tidying up here. Even the curtains are all pushed neatly to the same side. The blue of the individual image elements harmonizes almost too well. But wait: Couldn’t they have also set the chair backs at the same level? And why are the number signs on the booths so mixed up? Where are we, anyway? In a deserted call center? At a polling station? Is science being done here when no one is looking? Let’s reveal the secret: The image shows the oldest lab for experimental economic research in Europe, the BonnEconLab. Scientists have been studying human economic behavior here since as long ago as 1984. To date, nearly 30,000 people have participated in their experiments. The Max Planck Institute for Research on Collective Goods also regularly uses the lab. Research subjects with a penchant for experiment can earn money by “playing” the test games at the BonnEconLab. Whether as market participants, as bidders in an auction, or in negotiations: the test subjects continually make more or less successful decisions. Their success, on which the final reward for the individual participants depends, is influenced to a substantial degree by the decisions of their fellow players. Chance also plays a role – just like in real life. Experimental economics was long a controversial subject within the field of economics. With game theory came the first economic experiments in the 1960s. But people were slow to realize that experimental findings must be used more and more as a basis for economic research. Today, experimentation is a recognized research method in economics – and German researchers were at the forefront right from the start.
Every legal system in the world punishes corruption – but the punishments vary widely. The “how” is something that Christoph Engel, Director at the Max Planck Institute for Research on Collective Goods, and his colleagues Sebastian Goerg and Gaoneng Yu are studying in a laboratory experiment at two universities in Germany and China.
Incentives for managers were used as far back as the 19th century. However, they proved to be not necessarily a profitable investment for the company.
It was not merely greed on the part of mortgage banks that caused the fiasco.
Stabilizing the world’s climate and simultaneously supplying the world with energy requires technical innovation and creativity at the political level.
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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.

more

Financial stability and government bonds

2016 Luck, Stephan; Schempp, Paul
Jurisprudence Social and Behavioural Sciences

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.

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The cognitive processes involved in decisions in social dilemmas

2015 Fiedler, Susann
Cognitive Science Jurisprudence Social and Behavioural Sciences
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. more
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. more

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

2013 Hellwig, Martin
Social and Behavioural Sciences

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.

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The Logic of Conviction

2012 Schweizer, Mark
Jurisprudence
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. more

Skillful gambling

2011 Towfigh, Emanuel; Glöckner, Andreas
Jurisprudence
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. more
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. more
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. more

Intuitive and Deliberate Processes in Legal Decision Making

2008 Glöckner, Andreas
Cognitive Science Jurisprudence
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. more

The impact of state guarantees on banks’ risk-taking

2007 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. more
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. more

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

2005 Hellwig, Martin
Social and Behavioural Sciences
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. more
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. more