EXPERIMENTS

A further approach implemented by the project are behavioral experiments. The debt theory developed in the RESOLVENCY project assumes causal loops between legal design of insolvency laws, debt and socio-economic behavior. To substantiate causal links the project incorporates laboratory experiments. The experiments test inter alia distributional preferences of creditors to share losses in an insolvency situation. First results show that distributional preferences are not invariable but depend on creditors’ economic starting positions. Following this insight, the project analyzed political justice dimensions of debt restructuring procedures.