This project addresses the issue of social separatism and its consequences on the dynamics of inequality. This fundamental research is mostly related to Axis 3 “Spaces and Inequality Places” of the ANR program “Métamorphoses des sociétés: Inégalités-Inégalité”. It also addresses a number of issues of the thematical Axes 2, 4 and 5. We tackle these issues from an economic analysis perspective and develop a theoretical as well as an empirical analysis. Precisely, the research program is organized in 5 tasks, Tasks 1 and 2 being mainly theoretical and Tasks 3, 4, 5 corresponding to the empirical analysis. Task 1 opens the black box of social interactions by considering that the influence of group membership is mediated through social norms and networks. Task 2 tackles the issue of the impact of fiscal policy on social stratification. Task 3 is dedicated to the empirical study of the determinants of economic choices made by some segments of the population affected by segregation. We will use the survey Trajectoires et Origines (TeO) carried out jointly by INED and INSEE. Task 4 deals with the issue of student assignment mechanisms and their consequences on social mixing at school. It will proceed by simulating the effect of particular student assignment mechanisms on social mixing using data from Parisian primary schools. In Task 5, we plan to conduct laboratory experiments in order to identify some discrimination mechanisms and their consequences on social stratification. All these tasks will involve joint works. The team consists of 11 researchers. Finally, the team has not benefited from any external funding to develop this research.

Since abstention has been a growing phenomenon for many decades, the ambition of this project is to study the institutional determinants of citizens’ implication in local public decision-making. First of all, we want to explore the impact of decentralisation on electoral participation and more precisely using quasi-experimental approach assess how the different forms of decentralisation and the different modalities of local governance could bring citizens and elected officials closer together at the local level. We also want to determine which electoral systems favour or infringe the perception of closeness between citizens and the administration or elected authorities, or which design of the deliberative process may improve citizens empowerment. The research team of CITIZENS will combine different approaches – quasi-experimental method, axiomatic and computational approaches, and experimental economics – to contribute to this rapidly evolving field of research on voters’ behaviour.

Trust is a core component of the freedom and security of citizens, making relationships work more cohesively and efficiently. But it is fragile. Undermining trust raises transaction costs, weakens social cohesion, and ultimately reduces the freedom of citizens and impoverishes society (Arrow, 1972). Dishonesty introduces a major threat on trust and the ubiquity of deception is a major concern of modern society. Big scandals have been revealed in finance and sports but ordinary deception is also widespread (cheating in exams, fare dodging, CV inflation, sabotage at work, etc.). Dishonesty often results from abusing information asymmetries. Governments and organizations spend considerable resources to detect dishonesty and implement coercive measures, which may be detrimental on freedom and social welfare. FELIS’s ambition is to contribute to a better understanding of the determinants of deceptive behavior in order to improve the deterrence of dishonesty and promote the security of citizens in a free world. FELIS seeks to understand when people are more, or less, likely to act honestly and follow the moral course of action instead of serving their strict self-interest at the others’ expense. It aims at undertaking the standard economics-of-crime approach comparing the expected monetary benefits and costs of fraudulent actions by incorporating social, moral, emotional and psychological factors in economic decision-making. It will explore various mechanisms designed to fight against dishonesty while preserving the freedom of citizens. The key challenge of FELIS is to provide a characterization of 1) strategies used to deceive oneself and others; 2) the links between deception and asymmetric information; 3) the deterrence effect of both uncertainty of audits and sanctions; 4) how social networks form and convey peer effects leading to norms of honesty or dishonesty; 5) how trust is affected by dishonesty. This defines five scientific Work Packages. Work Package 1 investigates how individuals lie while trying to maintain their self-concept of honesty, by exploring how the distance between the truth and a lie affects decisions and can be manipulated. Work Package 2 studies the link between deception and the exploitation of asymmetric information, by exploring strategic truth-telling as part of a greedy deceptive strategy. Work Package 3 examines both the deterrence effect of information disclosure on the occurrence of crackdowns and whether there exists optimal sanctions discouraging dishonesty while avoiding criminality traps. Work Package 4 focuses on the social dimension of deception, notably the formation of social networks and peer effects in networks. Work Package 5 studies how to restore trust after it has been destroyed by the dishonest behavior. The ground-breaking nature and potential impact of FELIS is to go substantially beyond the current state of the art by offering a unique combination of game theory, experimental economics and psychology to better understand the causes and consequences of dishonesty in order to better identify efficient modes of deterrence that preserve the freedom of individuals. It combines theoretical modeling based on behavioral economics and experimental methods (laboratory experiments, lab-in-the-field experiments, neuroeconomics) to study the motivation of individuals to behave dis/honestly. The Consortium involves behavioral economists and experts in the physiological and neural analysis of emotions from GATE (CNRS, University of Lyon), the CORTEX laboratory of excellence, and CREM (CNRS, University of Rennes). It includes international partners: experts in the econometrics of networks and tax evasion at Laval University in Quebec, a psychologist specialized in the analysis of lying behavior at the Ben Gurion University, and behavioral economists from the University of Amsterdam and the National Research University Higher School of Economics in Moscow.

There is a growing scientific consensus around the need to significantly reduce the consumption of animal-based products. Springmann et al. (2016) estimate that food production could account for 52% of greenhouse gas emissions by 2050 if nothing is done, but could decrease to only 15% if humanity adopts plant-based diets. Regarding health, Tilman and Clark (2014) conclude the cessation of meat consumption would reduce the risk of type 2 diabetes by 41%, cancer risk by 10%, and coronal diseases by 20%. The last few years have seen the emergence of a real social dynamic aimed at reducing meat consumption and engaging in animal welfare. A recent report by the CREDOC estimated that the consumption of meat products per capita fell by 12% between 2007 and 2016. This reduction in meat consumption has also been accompanied by increased consideration of citizens for animal welfare. The 2016 European Eurobarometer survey noted that 88% of French citizens declared that farm animals should be better protected than they are now. This strong concern for animal welfare has also entered the political game with the creation of an animalist party in 2016, which managed to pass the minimum threshold to obtain public fundings in 86 constituencies at the 2017 legislative elections. Surprisingly, until very recently, economics has shown little interest in the question of the consumption of animal-based products. This projects aims at developing an economic approach of the consumption of animal-based products. Works in psychology mainly developed a behavioral analysis of meat consumption based on the cognitive dissonance perspective considering the so-called meat paradox (the fact that many individuals care for animal welfare but keep consuming products that induce great damages to animals). They showed that the cognitive dissonance between one’s preferences for animal welfare and one’s dietary choices leads individuals to engage in motivated reasoning. Economists have also devoted a few works, but in a much more modest number, to the discrepancy between consumption choices and political preferences for meat consumption. Lusk and Nordwood illustrate this vote-buy gap with Proposition 2 passed in 2008 in California by referendum: although most of the eggs sold in this state originated from caged egg-laying hens, a vast majority of citizens voted in favor of the proposition which imposed free-range for egg-laying hens exploitation. The authors explain the discrepancy between collective and private choices as a free-riding problem: the marginal impact of consuming a free-range egg on animal welfare is very limited, but there would be a great gain in collectively improving animal welfare. This public good approach to animal-based products can also be generalized to environmental and health concerns. This research project contains three work packages mobilizing mostly experimental methods. The first package investigates the consumption of animal-based products as a private choice. Study 1.1 develops economic methods to disentangle cognitive dissonance from naive ignorance. Study 1.2 explores how cognitive dissonance impacts social learning regarding animal-based diets. Study 1.3 proposes a multidisciplinary approach to the vegetarian/vegan epiphanies, i.e., the sudden awareness of the necessity to adopt a plant-based diet. The second package analyzes animal-based diets as a collective choice. Study 2.1 looks at the effectiveness of NGOs' discourses to convince people to adopt plant-based diets. Study 2.2 analyzes how the creation of a French animalist party impacted political competition. The third work package investigates the gap between private and collective choices. Study 3.1 documents the vote-buy gap in the European Union, by combining survey data, consumption data, and experimental data. Study 3.2 explores the efficiency of legal tools to regulate the externalities associated with the consumption of animal-based products.

Vertical chains are industry structures where some firms (at the upstream level) supply other firms (at the downstream level). Imperfect competition usually prevails at both levels, and upstream and downstream firms also bargain with one another. The goal of this project is to understand the industrial organization of vertical chains in terms of competition and bargaining to analyze its consequence on the price, variety and quality of the products offered to consumers. To reach this goal, our project combines theoretical industrial organization research with empirical and experimental approaches. This project follows a previous Franco-German project that was financed by the ANR and the DFG over the period 2008-2011. This previous project was fruitful in many respects. First, we have shown important and original results in each of the tasks we had identified, and in most cases, these results have provided guidelines for competition authorities. Second, several Franco-German collaborations have emerged and besides, some have led to publications in top journals. The first project was, however, mostly theoretical. This new project will help us not only maintain and increase the existing interactions between participants in the field of theoretical industrial organization, but also develop new interactions between empirical and experimental economists who have joined on both the French and the German side. Finally, adding empirical and experimental analyses will allow us to focus on essential issues of vertical chains using three different and highly complementary methods. The overall project consists of four work packages. The goal of the first work package is to understand how competition and the balance of power between upstream and downstream firms affect the different types of investments realized by firms within a vertical chain. In particular, we focus on vertically related firms’ incentives to invest in quality or in operating cost reduction, in quality labeling and in corporate social responsibility. The second work package aims at integrating the diversity of retail formats in the analysis of both retail competition and the balance of power between retailers and their suppliers. Multi-format retail competition results from the heterogeneity of consumer’s shopping behavior and is likely to generate specific competition strategies (cross subsidization, loss-leading, etc.) as well as new bargaining strategies towards suppliers. The third work package focuses on anticompetitive effects of contracts, such as foreclosure effects or the vertical control of competition within vertical chains. The last work package takes a dynamic perspective to analyze issues of collusion and reputation building as well as firms’ strategies in the presence of demand uncertainties.