Acceptance or rejection of welfare migration-an experimental investigation.

We study decisions on welcoming or opposing welfare migration in a laboratory setting with two societies in which one subject can migrate from the poorer to the richer society, provided a majority in the richer society votes to allow that. In each society, subjects indicate their preference for a percentage contribution to a public pool. The median of these rates sets the contributions paid by everybody; a feature that results in high contribution rates with an average of 90%. Varying the multiplier with which contributions are magnified before redistribution to society members, and thus the expected gain/loss associated with migration, we find that subjects overwhelmingly welcome migrants if they expect an economic benefit, while most participants oppose migration if they would be negatively affected by it. Regarding participants' attitudes, we find that more altruistic people are more in favor of migration than more selfish people and that center right-wing oriented subjects propose lower contribution levels than center left-wing oriented subjects. We conclude that economic motives are a crucial factor for accepting or rejecting welfare migration. Therefore, a key to promoting acceptance of new migrants is to ensure and then communicate that their net effect on growth, society, and the public purse is positive. Supplementary Information: The online version contains supplementary material available at 10.1007/s43546-022-00356-6.

Design-features of bubble-prone experimental asset markets with a constant FV.

Experimental asset markets with a constant fundamental value ( F V ) have grown in importance in recent years. A methodological examination of the robustness of experimental results in such a setting which has been shown to produce bubbles, however, is lacking. In a laboratory experiment with 280 subjects, we investigate whether specific design features are sufficient to influence experimental results. In detail, we (1) vary the visual representation of the price chart, and (2) provide subjects with full information about the FV process. We find overvaluation and bubble formation to be reduced when trading prices are displayed at the upper end of the price chart. Surprisingly, we do not find any effects when subjects have full information about the FV process.

Market versus Residence Principle: Experimental Evidence on the Effects of a Financial Transaction Tax.

The effects of a financial transaction tax (FTT) are scientifically disputed, as seemingly small details of its implementation may matter a lot. In this article, we provide experimental evidence on the different effects of an FTT, depending on whether it is implemented as a tax on markets, on residents, or a combination of both. We find that a tax on markets has negative effects on volatility and trading volume, whereas a tax on residents shows none of these undesired effects. Additionally, we observe that individual risk attitude is not related to traders' reaction to the different forms of an FTT.

The impact of a financial transaction tax on stylized facts of price returns-Evidence from the lab.

As the introduction of financial transaction taxes is increasingly discussed by political leaders we explore possible consequences such taxes could have on markets. Here we examine how "stylized facts", namely fat tails and volatility clustering, are affected by different tax regimes in laboratory experiments. We find that leptokurtosis of price returns is highest and clustered volatility is weakest in unilaterally taxed markets (where tax havens exist). Instead, tails are slimmest and volatility clustering is strongest in tax havens. When an encompassing financial transaction tax is levied, stylized facts hardly change compared to a scenario with no tax on all markets.

Market microstructure matters when imposing a Tobin tax-Evidence from the lab.

TRADING IN FX MARKETS IS DOMINATED BY TWO MICROSTRUCTURES: exchanges with market makers and OTC-markets without market makers. Using laboratory experiments we test whether the impact of a Tobin tax is different in these two market microstructures. We find that (i) in markets without market makers an unilaterally imposed Tobin tax (i.e. a tax haven exists) increases volatility. (ii) In contrast, in markets with market makers we observe a decrease in volatility in unilaterally taxed markets. (iii) An encompassing Tobin tax has no impact on volatility in either setting. Efficiency does not vary significantly across tax regimes.