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Volkswirtschaftliches Kolloquium

Logo WiWi Volkswirtschaftliches KolloquiumDas Volkswirtschaftliche Kolloquium wird in Kooperation der volkswirtschaftlichen Professuren der Fakultät durchgeführt. Falls Sie Interesse an einer regelmäßigen Einladung haben, senden Sie eine Nachricht mit dem Betreff "Forschungskolloquium" an die nebenstehende Kontaktadresse oder über diesen .

Hier findet sich eine Übersicht der in den vergangenen Semestern und Jahren im Rahmen des Kolloquiums von den jeweiligen Referenten gehaltenen Vorträge:


2009   2010   2011   2012   2013   2014   2015   2016   2017


Termin Referent/in Thema
M 127

Dr. Markus Fels
(KIT, Karlsruhe)

Incentivizing Efficient Utilization Without Reducing Access: The Case Against Cost-Sharing in Insurance

Cost-sharing is regarded as an important tool to reduce moral hazard in health insurance. Contrary to standard prediction, however, such requirements are found to decrease utilization both of efficient and of inefficient care. I employ a simple model that incorporates two possible explanations - consumer mistakes and limited access - to assess the welfare implications of different insurance designs. I find cost-sharing never to be an optimal solution as it produces two novel inefficiencies by limiting access. An alternative design, relying on bonuses, has no such side effects and achieves the same incentivization.

M 127
Prof. Dr. Barbara Chizzolini
(Università Bocconi / Milano / Italien)

Features and Determinants of Risk in Investment Choices by Private Equity Fun

In this paper we propose a measure of riskiness of PE assets alternative to the CAPM derived beta coefficient usually suggested in the literature on performance of PE Funds. We assume that at any given point in time there exist alternative investment opportunities that can be classified into a limited number of types, and that Funds manage their Portfolio “optimally”, within the range of investments allowed by their Placement Memorandum. We first estimate a discrete choice model of the Fund Managers’ investment decisions by type of PE investment, as a function of the observed characteristics of the Fund, of the Deal and of the Portfolio Company, as well as of the expected returns and expected loss of the PE deals. Given the chosen type of investment, we then estimate the probability of negative returns of each deal in each investment class. These predicted probabilities together with the historical expected shortfalls by investment type, yield the Expected Loss by deal, the measure of pure risk we propose in this paper. We find that it is possible to identify the idiosyncratic features of each investment type and that the patterns and degrees of riskiness differ quite significantly among them.

M 127
Dr. Yiquan Gu
(University of Liverpool / United Kingdom)

Informational benefits of a temporary buy-now price in dynamic auction

In this paper we study the role of a temporary buy-it-now (TBIN) price in a dynamic second-price auction, where bidders sequentially make their costly entry decisions after observing previous bids. We characterise the entry-threshold equilibrium for bidders, in which a bidder chooses to enter if and only if the current auction price is no more than the threshold. We demonstrate that offering a TBIN option increases bidder entry: when not executed, the TBIN price reveals that the early entering bidder's private-value is relatively low and hence relaxes the entry threshold for subsequent bidders. We show that the optimal TBIN price improves both seller revenue and social welfare.
M 127
Prof. Dr. Burkhard Heer
(Universität Augsburg)

Population Aging, Social Security and Fiscal Limits

We study the sustainability of pension systems using a life-cycle model with distortionary taxation that sets an upper limit to the real value of tax revenues. This limit implies an endogenous threshold dependency ratio, i.e. a point in the cross-section distribution of the population beyond which tax revenues can no longer sustain the planned level of transfers to retirees. We quantify the threshold using a computable life-cycle model calibrated on the United States and on 14 European countries which have dependency ratios among the highest in the world. We examine the effects on the threshold and welfare of a number of policies often advocated to improve the sustainability of pension systems. New tax data on dynamic Laffer effects are provided.

M 127
Dr. Andrey Launov
(University of Kent, UK)

Marginal Employment: Evidence from Germany



Termin Referent/in Thema
2016-10-17 Prof. Dr. Lilia Zhurakhovska
(Universität Duisburg)

Do I care if you are paid? - A donation field experiment

This study investigates how information on solicitors' payment conditions affect charitable giving. In this regard we focus on monetary incentives (fixed wages) and non-monetary incentives (working voluntarily). In our door-to-door field experiments with more than 2,800 households we inform the participating households on the remuneration of the solicitors. Our solicitors work under two different conditions (paid and unpaid). The goal of our study is to find out whether information on payment conditions affects donations. In our design we control for a potential effect of overhead costs as well as for solicitors' motivational crowding-out effects. We use the same charity in all treatments. When women are informed that solicitors are paid they significantly increase donations by 88%. On the contrary, male donors seem not to resound to solicitors' payment conditions. Neither do females change their donations if they learn that solicitors are unpaid. Our results demonstrate that not only different channels are at work but that they also depend on the gender of the donor.

2016-05-23 Prof. Dr. Gerhard Glomm
(Indiana University Bloomington / USA)

Fiscal Policy and the Growth-Inequality Tradeoff: The case of a small open economy

This paper examines the growth-inequality tradeoff in the context of fiscal policy reform in a developing, small open economy. The public sector finances its expenditures with income taxation and allocates a portion of its resources to the education and infrastructure sectors. The main interest is on the impact of reform on households' allocation decisions, particularly the decision to invest in the education of their child or, alternatively, to send him or her to work in the informal economy. The results point to greater distortionary effects of taxation for middle-income households. Poor households escape this distortion almost entirely owing primarily to an increase in their rate of return to education investment. By contrast, households in the upper-income brackets operate at a corner, choosing a full course of schooling for their children for virtually all sizes of government. As a result, increases in taxation above a certain threshold of public spending can increase growth and, at the same time, fuel inequality by shrinking the middle class. In evaluating the effects on the growth-inequality tradeoff of changes in the relative size of the education and infrastructure budgets, we find that spending is more heavily skewed towards education if the goal is to reduce inequality. Prioritizing education spending over infrastructure beyond a specified threshold, however, is inconsistent with a pro-growth policy strategy.

2016-05-02 Prof. Dr. Jürgen Eichberger
(Universität Heidelberg)

Equilibrium under Ambiguity (EUA) for Belief Functions

We study Equilibria under Ambiguity (EUA) with optimism and pessimism as introduced in Eichberger and Kelsey (2014) for the case of beliefs modelled by belief functions. We show existence of equilibria for finite games with an arbitrary number of players and both general and specific ambiguity about the opponents' strategy choice. We illustrate by examples the potential of this approach to model behavior which cannot be obtained as a Nash equilibrium.

2016-02-01 Prof. Dr. Leo Kaas
(Universität Konstanz)

Firm dynamics with frictional product and labor markets

We examine empirically and theoretically the joint dynamics of prices, output, employment and wages across firms. We first analyze administrative firm data for the German manufacturing sector for which price and quantity information at the nine-digit product level, together with information on employment, working hours and wages is available. We then develop a model of heterogeneous firms who compete for workers and customers in frictional labor and product markets. Prices and wages are dispersed across firms, reflecting differences in firm productivity and demand. Productivity and demand shocks have distinct implications for the firms' employment, output and price adjustments. In a quantitative analysis, we calibrate and evaluate the model predictions.

2016-01-18 Prof.Dr. Eugen Kováč
(Universität Duisburg-Essen)

Optimal stopping in a principal-agent model with hidden information and no monetary transfers

We study optimal stopping rules in a simple principal agent framework when the exchange of contingent monetary transfers is infeasible. In each period, the agent privately learns the value from stopping today, but disagrees with the principal about when to stop. A stopping rule commits the principal to a stopping probability conditional on communication by the agent. The optimal stopping rule exhibits a finite deadline. Within the deadline, the agent can make one proposal to stop. In case of rejection, the relation is terminated. If the deadline is reached without a proposal, the agent obtains the decision right.

2016-01-11 Prof. Dr. Martin Werding
(Ruhr-Universität Bochum)

Maintaining One’s Living Standard at Old Age: What Does That Mean?
Evidence Using Panel Data from Germany

How much retirement income is needed in order to maintain one’s living standard at old age? As it is difficult to find a firm basis for an empirical treatment of this question, we employ a novel approach to assessing an adequate replacement rate vis-à-vis income in the pre-retirement period. We subject indications regarding satisfaction with current income as collected in the German Socio-Economic Panel (GSOEP) to longitudinal analyses, using linear fixed-effects models and fixed-effects ordered logit models as our main analytical tools. We obtain a required net replacement rate of about 87% for the year of entry into retirement as a rather robust result, while replacement rates keeping the living standard unchanged may slightly decline over the retirement period.



Termin Referent/in Thema
2015-12-07 Prof. Dr. Wendelin Schnedler
(Universität Paderborn)

Knowledge and Curse of Crowds

Many decisions are entrusted to groups of people rather than individuals because `the many know more than the few.' This paper points out that optimally employing this knowledge requires a lot of common knowledge between individuals, which is harder to obtain in larger than in smaller groups. Crowds do not only seem blessed by more knowledge but also cursed in the sense that they cannot make optimal use of this knowledge. The paper presents a simple theoretical model and some preliminary evidence on this curse.

2015-10-19 JProf. Dr. Anna Zaharieva
(Universität Bielefeld)

On the Puzzle of Diversification in Social Networks with Occupational Mismatch

This paper incorporates social networks into a frictional labour market framework. There are two worker types and two occupations. Both occupations are subject to correlated business cycle fluctuations in labour demand. The equilibrium in this model is characterized by occupational mismatch which is associated with a wage penalty. This paper shows that there exists a unique value of network homophily maximizing the present value of income. Therefore, there is a gain for risk-neutral workers if their network is diversified between the two occupations. The reason for diversification is that the present value of income is a non-linear function of the network composition. Thus, it is not the desire to reduce the volatility of income as in standard portfolio theory which is driving the decision of workers. Nevertheless, the optimal diversification level is higher with stronger negative correlation in labour demand between the two occupations, with a lower unemployment benefit and with a higher probability of recession in the primary occupation. On the other hand, the optimal diversification level is reduced if there is on-the-job search in the state of mismatch.

2015-07-06 Prof. Dr. Johannes Münster
(Universität Köln)
Quantity restrictions on advertising, commercial media bias, and welfare

We study the welfare effect of a quantity restriction on advertising in free-to-air television in the presence of commercial media bias. Broadcasters face a trade-off between increasing the number of viewers by sending content that is highly valued by viewers, and increasing the price of advertising by choosing advertiser friendly content. A cap on advertising drives the per viewer price of ads up, thus content improves for viewers. Therefore, the cap can be welfare enhancing, even when the traditional argument for an advertising cap based on viewers' ad aversion does not apply. Competition among broadcasters makes it more likely that a cap on advertising improves welfare. Thus there is a complementarity between regulation and competition on this market. We also also show that a tax on advertising revenues has quite diffrent effects than a cap on advertising quantity.

2015-06-22 JProf. Dr. Jonas Dovern
(Universität Heidelberg)

A Multivariate Analysis of Forecast Disagreement: Confronting Models of Disagreement with Survey Data

This paper documents multivariate forecast disagreement among professional forecasters of the Euro area economy and discusses implications for models of heterogeneous expectation formation. Disagreement varies over time and is strongly counter-cyclical. Disagreement is positively correlated with general (economic) uncertainty. Aggregate supply shocks drive disagreement about the long-run state of the economy while aggregate demand shocks have an impact on the level of disagreement about the short-run outlook for the economy. Forecasters disagree about the structure of the economy and the degree to which individual forecasters disagree with the average forecast tends to persist over time. This suggests that models of heterogeneous expectation formation, which are currently not able to generate those last two features, need to be modified. Introducing learning mechanisms and heterogeneous signal-to-noise ratios could reconcile the benchmark model for disagreement with the observed facts.

2015-06-15 Prof. Dr. Erwin Amann
(Universität Duisburg-Essen)

Impact of Incentive Orientated Blended Learning on Students' Learning Behavior and Outcomes

This paper focuses on a blended learning approach implemented in university courses with the aim to improve learning performance and outcomes. In addition to the created online learning opportunities, an incentive based approach aims to promote student engagement in courses. Due to this incentive based blended learning concept the learning process becomes more effctive and successful. Moreover, students' motivation to deal with the teaching material rises. Consequently, the lack of preparation which often results in poor student performance diminishes.

For this purpose the concept of learning by doing is introduced to university courses supported by incentive orientated blended learning. Thus exam outcomes are mainly the result of knowledge, which rises in solving exercises and spending learning time. Dynamic maximization of utility considering the choice between learning time and leisure time is performed. Depending on preferences for leisure time, learning performance varies. As a result, utility is maximized by constant learning over time rather than by last minute learning.

Thus this paper emphasizes the importance of the interplay of incentives to learn, e-learning opportunities and face-to-face-sessions in regard to better learning behavior and outcomes.

2015-05-04 Prof. Dr. Sebastian Kranz
(Universität Ulm)

Predatory Short Sales and Bailouts

This paper extends the literature on predatory short selling and bailouts through a joint analysis of the two. We consider a model with informed short sales and predatory short sales by an uninformed investor, which can trigger the inefficient liquidation of a firm. We obtain several novel results: A commitment to bail out insolvent firms with positive probability can increase welfare because it can selectively deter predatory short selling without hampering desirable informed short sales. Contrasting a common view, bailouts can be optimal ex ante but undesirable ex post. Furthermore, bailouts in our model are a better policy tool than short selling restrictions. Welfare gains from the bailout policy are unevenly distributed: shareholders gain while taxpayers lose. Bailout taxes allow ex-ante Pareto improvements.

2015-02-02 Dr. Shafik Hebous
(Universität Frankfurt)

Evaluating the Effects of ACE Systems on Debt-Financing and Investments

We study the effects of offering allowances on corporate equity (ACE) on corporate debt policy, passive investments, and active investments of multinational firms. Our analysis considers hard and soft versions of ACE using a high quality confidential database on all German investors abroad (MiDi). We observe the full ownership structure of the multinational group, a distinctive feature of these data. The findings suggest that particularly the hard version of ACE reduces the debt ratio. Importantly, our results unveil that the current unilateral implementation of ACE generates a potential tax planning opportunity for multinational firms through the strategic use of passive investments. These results are robust to various different identification approaches.

2015-01-26 Dr. Yiquan Gu
(Liverpool Business School)
Der Vortrag muss leider entfallen!
2015-01-19 Prof. Dr. Florian Englmaier
(LMU München)
The Role of Communication of Performance Schemes: Evidence from a Field Experiment

In corporate practice, incentive schemes are often complicated even for simple tasks. Hence, the way they are communicated might matter. In a controlled field experiment, we study a minimally invasive change in the communication of a well-established incentive scheme - a reminder regarding the piece rate at the beginning of the shift. The experiment was conducted in a large firm where experienced managers work in a team production setting and here incentives for both quantity and quality of output are provided. While the treatment conveyed no additional material information and left the incentive system unchanged, it had significant positive effects on quantity and on managers' compensation. These effects are economically sizable and robust to alternative empirical specifications. We consider various potential mechanisms, where our preferred explanation - improved salience of incentives - is consistent with all of the findings.

2015-01-12 Prof. Carlos Bethencourt, Ph.D.
(Universidad de La Laguna / Spanien)

On the Complementarities between Human Capital and Public Revenues: Consequences for Development

Empirical evidence shows that while the return of education at micro level is very high in low income countries, the relationship between human capital and economic performance is weak. This paper proposes a new theory to explain this puzzle which is based on the allocation of human capital to public and private sector along the development process. We present a model in which human capital has four uses: to produce private goods (private sector), to produce public goods, to collect taxes by public bureaucrats and to provide public education. Countries with low per capita income are characterized by low levels of human capital with a high return. A small portion of this human capital is devoted to the public sector, which involves low tax collection and low public expenditure. The transition in these countries is characterized by a growing share of human capital devoted to bureaucrats and public education and a declining share devoted to the private sector. This may explain why the increase of human capital does not have the impact on the production that it would be expected from the high private return on human capital.

2015-01-05 Dr. Cedric Wasser
(Universität Bonn)

Dissolving Partnerships Efficiently

For a partnership model that allows for non-identical distributions, we characterize the incentive compatible and individually rational dissolution mechanisms that maximize any weighted average of expected revenue and surplus. We call a mechanism that achieves this objective optimal. A major challenge for deriving optimal mechanisms for partnerships models is that agents have type-dependent outside options and that the worst-off types depend on the allocation rule. Therefore, the types for which the participation constraint binds must be determined simultaneously with the allocation rule. We show that these and related obstacles can be overcome by showing that there is a unique fixed point that satisfies all the consistency requirement. Optimal mechanisms typically introduce inefficiency only for intermediate types and may require a consistently specified random tie-breaking rule. Amongst other things, our results can be used to determine the mechanism that maximizes the expected surplus under a budget balance constraint if ex post efficiency is not feasible without incurring a deficit. With identical distributions, the combination of revenue and surplus generated by an optimal mechanism is Schur-concave in the ownership shares, i.e., it increases as initial property rights become less diverse. Moreover, with identical distributions there is typically a large set of initial ownership shares that permits achieving a given value of the objective function. These results do not generalize to non-identical distributions.



Termin Referent/in Thema
2014-12-15 Prof. Dr. Andreas Lange
(Universität Hamburg)

Voluntarily Reducing the Size or the Probability of a Probabilistic Public Damage: Experimental Evidence

2014-12-08 Dr. Matthias Wibral
(IZA, Bonn)

How Malleable Are Choice Brackets? The Case of Myopic Loss Aversion

We study whether a change in the framing of the decision problem affects how individuals bracket their choices in the context of myopic loss aversion. We find a systematic asymmetry in the malleability of choice brackets: Subjects who were previously exposed to a frame that encourages narrow bracketing can learn to bracket broadly when the framing of the decision problem changes. In contrast, subjects previously exposed to a frame encouraging broad bracketing continue to bracket broadly after a change in framing. Our results further suggest that narrow bracketing is a mistake rather than the outcome of rational maximization of preferences.

2014-12-01 Mathias Hofmann, PhD
(Deutsche Bundesbank Forschungszentrum)
International Capital Flows, External Assets and Output Volatility

This paper proposes a new perspective on international capital flows and countries' long-run external asset position. Cross-sectional evidence for 84 developing countries shows that over the last three decades countries that have had on average higher volatility of output growth accumulated higher external assets in the long-run and experienced more procyclical capital outflows over the business cycle than those countries with a same growth rate but a more stable output path. To explain this finding we provide a theoretical mechanism within a stochastic real business cycle growth model in which higher uncertainty of the income stream increases the precautionary savings motive of households. They have a desire to save more when the variance of their expected income stream is higher. We show that in the model the combination of income risk and a precautionary savings motive will lead to procyclical capital outflows at business cycle frequency and a higher long-run external asset position.

2014-11-24 Prof. Dr. Maik Wolters
(IfW Kiel und CAU Kiel)

The Macroeconomic Effects of Fiscal Consolidation in Dynamic General Equilibrium

We provide a systematic analysis of the transmission of fiscal consolidation via various instruments in a medium-scale dynamic general equilibrium model. Our results show that in the short run fiscal consolidation leads to a large and persistent contraction in output if the fiscal instrument affects production factors negatively as it is the case for government investment cuts and labor and capital tax increases. By contrast, for a consolidation via government consumption, transfers or the consumption tax rate, output recovers much faster. The presence of credit-constrained households who cannot smooth consumption amplifies overall output dynamics. In addition, we show that the welfare of credit-constrained households is more adversely affected by fiscal consolidation than welfare of unconstrained households irrespective of the fiscal instrument used. Finally, when the zero lower bound on the nominal interest rate binds the short-run output costs of fiscal consolidation increase substantially in particular for expenditure based consolidations.

2014-11-17 Dr. Dominik Sachs
(Universität Köln)

Designing Efficient Education and Tax Policies

We study education and income tax policies in a model with endogenous selection into college. Our framework incorporates heterogeneity in innate ability, parental income and preferences for college. Individuals face earnings risk (implying uncertain returns to college) and borrowing constraints. We estimate the relevant parameters of the model for our quantitative analysis using NLSY-data. The quantitative model can well replicate key empirical facts about college graduation and its (strong) responsiveness to education policies. We find that an increase in college subsidies is self-financing via higher tax revenue in the future; if we allow grants to condition on parental income, this effect gets even stronger and children with low parental income should receive higher subsidies for pure efficiency reasons. Although college graduation strongly reacts to subsidies, the additional excess burden of taxation implied by the endogenous college choice is of second order as compared to the excess burden from labor supply; in particular for top income tax rates. The shape and the size of optimal marginal income tax rates is barely affected by the endogeneity of the college decision.

2014-11-10 JProf. Dr. Annika Herr
(DICE,  Universität Düsseldorf)

Reference pricing and cost-sharing:
Theory and evidence on German off-patent drugs

This paper evaluates the impact of reference pricing on prices and co-payments in the (German) market for off-patent pharmaceuticals. We present a theoretical model with price-sensitive and loyal consumers that shows that a decrease in the reference price affects the consumers' co-payments in a non-monotonic way: For high reference prices, a marginally lower reference price may lead to lower co-payments. However, for low reference prices a further reduction may result into higher consumer co-payments. We use quarterly data on reference priced drugs covered by the social health insurance in Germany over the period 2007 - 2010 to analyze the empirical effects of reference price reductions. We find that, while prices decrease due to the reduction, co-payments behave non-monotonically and indeed increase if the reference price is sufficiently low.

2014-11-03 Dr. Florian Morath
(MPI München)

Technology Transfers for Climate Change

This paper considers the transfer of cost-reducing technology in the context of contributions to climate protection. We analyze a two-period public goods model where later contributions can be based on better information, but delaying the mitigation effort is costly because of irreversible damages. Investments in technology affect the countries' timing of contributing. We show that countries have an incentive to provide cost-reducing technology because this can lead to an earlier contribution of other countries and therefore reduce a country's burden of contributing to the public good. Our results provide a rationale for the support of technology sharing initiatives.

2014-07-14 JProf. Dr. Marie Paul
(Universität Duisburg-Essen)

The Dynamic Employment and Earnings Effects of Fixed-term Contract Work

This paper evaluates the impact of reference pricing on prices and co-payments in the (German) market for off-patent pharmaceuticals. We present a theoretical model with price-sensitive and loyal consumers that shows that a decrease in the reference price affects the consumers’ co-payments in a non-monotonic way: For high reference prices, a marginally lower reference price may lead to lower copayments. However, for low reference prices a further reduction may result into higher consumer co-payments. We use quarterly data on reference priced drugs covered by the social health insurance in Germany over the period 2007 - 2010 to analyze the empirical effects of reference price reductions. We find that, while prices decrease due to the reduction, co-payments behave non-monotonically and indeed increase if the reference price is sufficiently low.

2014-06-30 Dr. Nadine Chlass
(University of Turku)

How Do People Reason in Dynamic Games?

We study strategic reasoning in a two-stage dynamic game. One player observes an action of her opponent before both players can interact. The opponent's action reveals with some probability her belief about the player's choice in this future interaction. We show for the first time experimentally that an individual's propensity to forwardly or backwardly induct is a function of her belief whether the opponent's action was a mistake. We also report for the first time that individuals can exhibit pure forward induction outside the framework of equilibrium refinements and show that strategic reasoning varies along with individuals' personality. Our setting abstracts from social preferences.

2014-06-23 Prof. Dr. Klaus Wälde
(Universität Mainz)

Stress and Coping - An Economic Approach

Stress is ubiquitous in society. We present a model where stressors translate into subjective stress via an appraisal process. Stress reduces instantaneous utility of an individual directly and via a cognitive load argument. Coping can be functional and under the control of the individual or more automatic with dysfunctional features. We predict the occurrence and frequency of controlled vs uncontrolled coping - emotional outbursts - as a function of an individual's personality and environment. We show that outbursts cannot always be avoided. We also show that artifcially delaying emotional outbursts can lead to even more outbursts. The model implies that success of psychotherapy is discontinuous and characterized by breakthroughs.

2014-05-26 Dr. Thomas Kopetsch
(Kassenärztliche Bundesvereinigung Berlin)

Zur Interdependenz von ambulanten und stationären Leistungen im deutschen Gesundheitswesen

For some considerable time now the interface between ambulatory and hospital care has been mooted as a cause of inefficiencies in the German health system and there have been calls for a softening of the strict separation between the two sectors. This debate makes clear the need for detailed empirical information on the interdependence between the two sectors. Using extensive administrative data at the level of the 412 German counties for the years 2007 to 2009 and a simultaneous equation model which allows the numbers of ambulatory and hospital cases to be mutually conditional, we examine the connection between ambulatory and hospital specialist care separately for ten medical specialties. The results show that the interdependence of ambulatory and hospital services is far from homogeneous. The relationship depends, on the one hand, on the specialty and, on the other, on the direction of the effect observed. This heterogeneity needs to be taken into account for cross-sector needs-based planning.

2014-05-05 Dr. Hannah Schildberg-Hörisch
(Universität Bonn)

Reducing Overconfidence – Causal Evidence from Intention-to-Treat-Estimates

2014-04-28 Prof. Dr. Gerhard Glomm
(Indiana University Bloomington)

Fiscal Austerity Measures: Spending Cuts vs. Tax Increases

We formulate an overlapping generations model with skill heterogeneity and productive and non-productive government programs to study the macroeconomic and intergenerational welfare effects caused by risk premium shocks and government debt reductions. We demonstrate that in a small open economy with a high level of debt-to-GDP ratio a small increase in the risk premium leads to substantial output contraction and negative welfare effects. Next, we quantify the effects of reducing the debt-to-GDP ratio using a wide range of fiscal austerity measures. These reforms result in trade-offs between short-run contractions and long-run expansions in aggregate output. In addition, the spending-based austerity reform is dominated by the tax-based reform in terms of income in the short run, but becomes dominant in the long run. The welfare effects vary significantly across generations, depending on fiscal austerity measures, skills and working sector. The current old and middle age generations experience welfare losses while current young workers and future generations are beneficiaries of the reforms. A mixed reform results in the largest welfare effects.

2014-01-27 PD Dr. André Casajus
(HHL Leipzig Graduate School of Management)

On replicator dynamics derived from TU games

2014-01-20 Dr. Per Hjertstrand
(IFN Stockholm)

Non-parametric Revealed Preference Tests of Returns to Scale

2014-01-13 Dr. Doina Maria Radulescu
(ETH Zürich)

The Effects of a Bonus Tax on Executive Compensation and Risk Taking: Evidence from the UK Experience

This paper explores the reaction of compensation components awarded to directors of UK financial institutions following the temporary adoption of the bonus payroll tax in December 2009. Excessive bonuses are blamed for encouraging risk taking and are regarded as one of the pull factors of the financial crisis. The British government attempted to reduce bonuses and accordingly corporate risk-taking by means of a special tax on cash-based bonuses. Using a comprehensive dataset on executive compensation we show that the introduction of the bonus tax decreased the cash bonuses awarded to directors by about 40%, accompanied however by a simultaneous increase in other compensation components leaving total compensation unaffected. Regarding the risk profiles, we do not find evidence for a significant effect of bonuses on corporate risk-taking. In contrast, we identify a risk enhancing effect of equity compensation such that a shift from cash-based variable compensation towards equity may even have adverse affects on corporate risk-taking.



Termin Referent/in Thema
2013-12-09 Prof. Dr. Tobias Seidel
(Universität Duisburg-Essen)

Regional Implications of Financial Market Development: Credit Rationing, Trade, and Location

We develop a heterogeneous-firms model with trade in goods, labor mobility and credit constraints due to moral hazard. Mitigating financial frictions reduces the incentive of highskilled workers to migrate to one region such that an unequal distribution of industrial activity becomes less likely. Hence, financial market development has opposite regional implications as trade liberalization. While the former leads to more dispersion of economic activity across space, the latter tends to drive clustering. We provide empirical evidence for this hypothesis by combining industry-region variation in the spatial concentration of economic activity with information on the access to credit and the dependence on external finance. Our estimates for 20 European countries and eleven industries confirm that financial market development mitigates the clustering of economic activity.

2013-12-02 Prof. Dr. Sotirios Georganas
(City University London)

On the Persistence of Strategic Sophistication

We examine whether the Level-k model of strategic behavior generates reliable cross-game testable predictions at the level of the individual player. Within one family of similar games subjects' observed levels are fairly consistent, but within another family of games there is virtually no cross-game correlation. Moreover, the relative ranking of subjects' levels is not consistent within the second family of games. Direct measures of strategic intelligence are generally not correlated with observed levels of reasoning in either family. Our results suggest that the Level-k model is just one of many heuristics that may be triggered in some strategic settings, but not in others.

2013-11-25 Prof. Dr. Colin Vance
(RWI Essen)

Fuel Taxes versus Efficiency Standards - An Instrumental Variable Approach

Using household travel diary data collected in Germany between 1997 and 2012, we employ an instrumental variable (IV) approach to estimate fuel price and effi ciency elasticities. The aim is to gauge the relative impacts of fuel economy standards and fuel taxes on distance traveled. We fi nd that the magnitudes of the elasticity estimates are statistically indistinguishable: higher fuel prices reduce driving by the same degree as higher fuel effi ciency increases driving. This fi nding indicates an off setting eff ect of fuel effi ciency standards on the eff ectiveness of fuel taxation, calling into question the effi cacy of the European Commission’s current eff orts to legislate CO2 emissions limits for new cars given prevailing high fuel taxes.

2013-10-21 Prof. Dr. Agnieszka Rusinows
(Université Paris 1)

Ingratiation and Favoritism

We investigate workers’ ingratiatory behavior and managers’ discrimination in favor of workers who share similar opinions. In our laboratory experiment, managers can observe workers’ performance and opinions before assigning payoffs. In some treatments, workers can change their opinion after learning that held by the manager. We find evidence of high ingratiation indices although managers reward less opinion conformity when opinions can be manipulated. Ingratiation and favoritism can be reduced by introducing managerial performance pay and by making the manipulation of opinions more costly to the workers. Reducing the role of luck in the measure of performance has little effect.

2013-07-15 Prof. Dr. Evelyn Korn
(Universität Marburg)

How and when can economic skills enhance cooperation?

Conventional wisdom has it that economic training and education tends to produce less cooperative people – where cooperation means following group-oriented goals. This issue has attracted particular attention in discussions of the current economic crisis where it was asked if increasing marketization of societies has created an environment encouraging amoral selfish behavior of financial intermediaries and other economic agents. We provide some evidence against this claim with the help of an experiment, using an investment game with a public-goods character. Modest guidance of strategic abilities increases the degree of cooperation if the institutional setting permits reputation building. We thus conclude that economic practice can enhance cooperation in a socially stable environment.

2013-07-08 Dr. Christoph Goertz
(University of Birmingham)
Sector Specific News Shocks in Aggregate and Sectoral Fluctuations

Using a two-sector estimated DSGE model with a financial channel we show the sector where TFP news arrives matters for its propagation and quantitative importance. Anticipated increases in TFP expected to arrive in the consumption sector are expansionary while those in the investment sector are broadly contractionary. Our results indicate a significant role of TFP news shocks as a predictive force behind fluctuations. Consumption sector TFP news shocks generate both aggregate and sectoral co-movement and account for approximately, 31%, 21%, 43%, 29% in the variance of output, investment, hours worked, and consumption respectively in business cycle frequencies. The financial channel provides amplification to TFP news. We discuss the relationship of our findings with VAR based estimates of TFP news shocks.

2013-07-01 Dr. Friedhelm Pfeiffer
(ZEW, Mannheim)

Early Life Adversity and Children’s Competence Development: Evidence from the Mannheim Study of Children at Risk

This paper investigates the role of early life adversity and home resources in terms of competence formation and school achievement based on data from an epidemiological cohort study following 364 children from birth to adolescence. Results indicate that organic and psychosocial risks present in early life as well as the socio-emotional home environment are significant predictors for the formation of competencies. Competencies acquired at preschool age predict achievement at school age. A counterfactual analysis is performed to assess trade-offs in the timing of interventions in the early life cycle.

2013-06-24 Prof. Dr. Günter Beck
(Universität Siegen)

Estimating border effects: evidence from a multi-country scanner price data set

2013-06-17 Prof. Dr. Peter Tillmann
(Universität Siegen)

Using forecasts to uncover the loss function of FOMC members

We revisit the sources of the bias in Federal Reserve forecasts and assess whether a precautionary motive can explain the forecast bias. In contrast to the existing literature, we use forecasts submitted by individual FOMC members to uncover members' implicit loss function. Our key finding is that the loss function of FOMC members is asymmetric: FOMC members incur a higher loss when they underpredict (overpredict) inflation and unemployment (real GDP) as compared to an overprediction (underprediction) of similar size. Our findings add to the recent controversy on the relative quality of FOMC forecasts compared to staff forecasts. Together with Capistrán's (2008) finding of similar asymmetries in Federal Reserve staff forecasts our results suggest that differences in predictive ability do not stem from differences in preferences. This is underlined by our second result: forecasts remain biased even after accepting an asymmetric loss function.

2013-06-10 Prof. Dr. Zeno Enders
(Universität Heidelberg)

Undue Optimism and Economic Activity

Expectations matter for economic activity. To the extent that they are fundamentally unwarranted, they represent "undue optimism or pessimism" (Pigou, 1927). In this paper, we identify empirically the effct of undue optimism/pessism ("optimism shocks") on economic activity. In a first step, we compute an expectation error regrading current economic activity: the difference of the Ifo index of economic activity and its consensus forecast, compiled simultaneously and independently. The resulting "Ifo innovations" may represent either fundamental innovations or optimism shocks. In a second step, we impose long-run restrictions on a VAR model to disentangle the effcts of both shocks. We find that optimism shocks - in line with theory - reduce Ifo innovations, but raise economic activity. They account for up to 30% of short-run fluctuations in industrial production.

2013-05-27 Prof. Dr. Oliver Gürtler
(Universität zu Köln)

The Optimality of Heterogeneous Tournaments

We investigate the effect of employee heterogeneity on the incentive to put forth effort in a market-based tournament. Employers use the tournament's outcome to estimate employees' abilities and accordingly condition their wage offers. Employees put forth effort, because by doing so they increase the probability of outperforming the rival, thereby increasing their ability assessment and thus the wage offer. We demonstrate that the tournament outcome provides more information about employees' abilities in case they are heterogeneous. Thus, employees get a higher incentive to affect the tournament outcome, and employers and it optimal to hire heterogeneous contestants.

2013-05-06 JProf. Dr. Tobias Wenzel
(Heinrich-Heine-Universität Düsseldorf)

Hidden price

2013-04-22 Prof. Dr. Gerhard Jäger
(Universität Tübingen)

Trust is good, strategic inference is better

Game theory is a mathematical framework that is being used in economics and biology, but also in philosophy, political science and computer science, to study the behavior of multiple agents that are engaged in strategic interaction. It has manifold applications in linguistics as well. In particular, it has been utilized to investigate stability conditions of linguistic features in a large speech community, and to explore the strategic aspects of single speech acts.

2013-01-28 Prof. Dr. Daniel Krähmer
(Universität Bonn)

Optimal Sequential Delegation

The paper extends the optimal delegation framework pioneered by Holmström (1977, 1984) to a dynamic environment where, at the outset, the agent privately knows his ability to interpret decision relevant private information received later on. We show that any mechanism can be implemented by a menu of delegation sets and characterize the optimal menu for the uniform quadratic case. Sequential delegation is strictly better than static delegation whenever the conflict of interest is small, the agent’s ability is sufficiently dispersed, and the likelihood of facing a high ability agent is sufficiently small.

2013-01-21 Michael U. Krause, Ph.D.
Deutsche Bundesbank)

The Expectations-Driven U.S. Current Account

Since 1991, survey expectations of long-run output growth for the U.S. relative to the rest of the world exhibit a pattern strikingly similar to that of the U.S. current account, and thus also to global imbalances. We show that this finding can to a large extent be rationalized in a two-region stochastic growth model simulated using expected trend growth filtered from observed productivity. In line with the intertemporal approach to the current account, a major part of the buildup of the U.S. current account deficit appears to be driven by the optimal response of households and firms to improved growth prospects.

2013-01-14 Dr. Raymond Montizaan
(Maastricht University)

Negative Reciprocity and retrenched pension rights

We document the importance of negatively reciprocal inclinations in labor relationships by showing that a retrenchment of pension rights, which is perceived as unfair, causes a larger reduction in job motivation the stronger workers’ negatively reciprocal inclinations are. We exploit unique matched survey and administrative data on male employees in the public sector in the Netherlands and compare the job motivation of employees born in 1950, who faced a substantial retrenchment of their pension rights resulting from a pension reform in 2006, to that of slightly older employees who remain entitled to more generous pension benefits. Job motivation is significantly lower among negatively reciprocal employees who were affected by the reform. The negative effect on job motivation is greater for negative reciprocal employees born very shortly after the cut-off date of January 1, 1950, as well as for those with many untreated colleagues, and who therefore arguably perceive the policy change as being more unfair. We also find that the treatment effect is stronger among workers who are more likely to hold their employer accountable for the drop in their pension rights, that is, those who work for the national government which initiated the pension reform.



Termin Referent/in Thema
2012-12-10 Prof. Dr. Holger Strulik
(Universität Göttingen)

From Worship to Worldly Pleasures:
Secularization and Long-Run Economic Growth

In medieval times, most people identified with religious values and aggregate income and productivity grew at glacier speed. In the 20th century, religion played a much lesser role in daily life and income and productivity grew at high and unprecedented rates. The present paper develops a simple economic theory of identity choice that explains both stylized facts as well as a period of secularization during which an increasing share of the population abandons religious identity for worldly pleasures and aggregate productivity takes off. An extension of the basic model investigates the Protestant reformation as an intermediate stage. Another extension introduces socially-dependent religious preferences, establishes the endogenous emergence of multiple, self-fulfilling equilibria, and demonstrates how a social multiplier amplifies the speed of transition.

2012-11-12 Christoph Bertsch
(University College London)

A wake-up call: Contagion through alertness

We provide a novel contagion mechanism based on an alertness effect. Observing an adverse event is a wake-up call that induces investors to acquire costly information about the potential exposure to that event. Even if the exposure to the adverse event turns out to be absent, information acquisition in itself can trigger fragility. Our mechanism is applicable to soverign debt crises, bank runs, currency attacks, political regime change, and other coordination problems. The contagion-through-alertness mechanism offers an explanation for the 1997 Asian currency crisis where financial fragility spread to countries with seemingly unrelated fundamentals and limited interconnectedness.

2012-11-05 Prof. Vivien Lewis
(Katholieke Universiteit Leuven)

Monetary Policy and the Cyclicality of Labor Productivity

We document two facts. Countries with a less variable unemployment rate have (i) more procyclical labor productivity and (ii) lower inflation volatility. Introducing increasing returns in production through endogenous labor effort into a monetary business cycle model lowers the variability of employment and makes productivity more procyclical. This acts as a counterweight to labor compensation in determining marginal costs and makes inflation more stable. We estimate our model using euro area data by VAR impulse response matching. The model is able to match the procyclical response of labor productivity to a non-technology shock, whereas the standard New Keynesian model without effort is not. Under the Ramsey optimal monetary policy, inflation variability decreases as the effort margin becomes more important.

2012-10-29 Prof. PhD Christoph Kuzmics
(Universität Bielefeld)

An Alternative Subjective Expected Utility Representation Theorem

A decision maker (DM) is asked to make choices from a set of acts, which entail both risk and uncertainty in the sense of knight (1921). Extending Raiffa's (1961) argument I show that, provided the DM can choose acts objectively randomly (by flipping her own fair coin, for instance), provided the DM's preferences over objective lotteries satisfy the von Neumann and Morgenstern (1944) axioms, and provided the DM's preferences over the space of all random acts satisfy Anscombe and Aumann's (1963) axioms of reversal of order and dominance, then any undominated random act (that is any potential choice the DM can make) can also be rationalized by the DM maximizing her subjective expected utility for some subjective belief.

2012-10-22 Dr. Felix Ketelaar
(Universität Bonn)

Truthtelling in Heterogeneous Committees

This paper analyses truthtelling incentives in pre-vote communication in heterogeneous committees. We modify the classical Condorcet jury model by introducing a new informational structure that captures the feature of consistency of information. In contrast to the impossibility result shown by Coughlan (2000) for the classical model, full pooling of information followed by sincere voting is frequently an equilibrium outcome of our model. Furthermore, abandonning the assumption of sincere voting, we characterize necessary and sufficient conditions for the existence of truthful equilibria implementing the first best decision rule. These conditions are met for a large set of parameter values implying the possibility of ex post conflict between committee members.

2012-10-15 Prof. Dr. Frank Riedel
(Universität Bielefeld)

Strategic Ambiguity in Games

We propose a framework for normal form games where players can use Knightian uncertainty strategically. In such Ellsberg games, ambiguity-averse players may render their actions objectively ambiguous by using devices such as Ellsberg urns, in addition to the standard mixed strategies. While Nash equilibria remain equilibria in the extended game, there arise new Ellsberg equilibria with distinct outcomes, as we illustrate by negotiation games with three players. We characterize Ellsberg equilibria in two-person games with conflicting interests. These equilibria turn out to be consistent with experimental deviations from Nash equilibrium play.

2012-07-02 Prof. Dr. Olaf Posch
(Universität Aarhus)

Risk of rare disasters, Euler equations errors and the performance of the C-CAPM

This paper shows that the consumption-based asset pricing model (C-CAPM) with low-probability disaster risk rationalizes large pricing errors, i.e., Euler equation errors. This result is remarkable, since Lettau and Ludvigson (2009) show that leading asset pricing models cannot explain sizeable pricing errors in the C-CAPM. We also show (analytically and in a Monte Carlo study) that implausible estimates of risk aversion and time preference are not puzzling in this framework and emerge as a result of rational pricing errors. While this bias essentially removes the pricing error in the traditional endowment economy, a production economy with stochastically changing investment opportunities generates large and persistent empirical pricing errors.

2012-06-18 Prof. Dr. Hendrik Schmitz
(Universität Duisburg-Essen)

In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice

This paper provides field evidence on (a) how price framing affects consumers¿ decision to switch health insurance plans and (b) how the price elasticity of demand for health insurance can be influenced by policymakers through simple regulatory efforts. In 2009, in order to foster competition among health insurance companies, German federal regulation required health insurance companies to express price differences between health plans in absolute Euro values rather than percentage point payroll tax differences. Using individuallevel panel data, as well as aggregated health plan-level panel data, we find that the reform led to a sixfold increase in an individual¿s switching probability and a threefold demand elasticity increase.

2012-06-11 Dr. Alexander Bick
(Goethe Universität Frankfurt)
Der Vortrag muss leider entfallen!
2012-05-14 Dr. Nadja Dwenger
(Max-Planck-Institut für Steuerrecht und Öffentliche Finanzen, München)

Sharing the burden: Empirical evidence on corporate tax incidence

This study empirically investigates the direct incidence of the corporate income tax through wage bargaining, using an industry-region level panel data set on all corporations in Germany over the period 1998 to 2006. Our measure of direct incidence for the first time accounts for employment effects which result from tax induced wage changes. Workers share in reductions of the CIT burden; yet, direct incidence is small and confined to 0.19 0.29. Thus, the net effect of wage bargaining on the corporate wage bill, after an exogenous 1 decrease in the CIT burden, is as little as 19 to 29 cents. This is about half of the effect obtained in prior literature under the assumption that employment remained constant. A focus on wages alone leads to an overestimation of direct tax incidence.

2012-05-07 Dr. Fabian Kindermann
(Universität Würzburg)

Optimal taxation with current and future cohorts

This note demonstrates that optimal tax calculations in overlapping generations models should not be based exclusively on long-run welfare changes. As the latter represent a mix of efficiency and intergenerational redistribution effects, they typically favor policies which redistribute towards future cohorts. Taking the recent study of Conesa et al. (2009) as an example, we explicitly consider short- and long-run welfare effects and isolate the aggregate efficiency consequences of a tax reform. Based on this aggregate efficiency measure, we find a much lower capital income tax rate and a significantly less progressive labor income tax schedule than Conesa et al. (2009) to be optimal. As we demonstrate, the optimality of capital income taxation is explained by the low interest elasticity of precautionary savings compared to that of life-cycle savings.

2012-04-30 Dr. Benjamin Born
(Ifo Institut München)

Fiscal News and Macroeconomic Volatility

This paper analyzes the contribution of anticipated capital and labor tax shocks to business cycle volatility in an estimated New Keynesian business cycle model. While fiscal policy accounts for about 15% of output variance at business cycle frequencies, this mostly derives from anticipated government spending shocks. Tax shocks, both anticipated and unanticipated, contribute little to the fluctuations of real variables. However, anticipated capital tax shocks do explain a sizable part of inflation fluctuations, accounting for up to 12% of its variance. In line with earlier studies, news shocks in total account for about 50% of output variance. Further decomposing this news effect, we find permanent total factor productivity news shocks to be most important. When looking at the federal level instead of total government, the importance of anticipated tax and spending shocks significantly increases, suggesting that fiscal policy at the subnational level typically counteracts the effects of federal fiscal policy shocks.

2012-01-30 Dr. Arne Uhlendorff
(Universität Mannheim)

The Role of Sickness in the Evaluation of Job Search Assistance and Sanctions on Unemployment and the Subsequent Job Quality

Unemployment insurance agencies often combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since (at least in Germany) during sick-ness spells, minimum requirements on search behavior do not apply. Data show increased sickness absence shortly after vacancy referrals by case work-ers. We analyze the effects on unemployment duration and job quality, as measured by the wage and employment stability. To evaluate sanction effects and the impact of receiving vacancy referrals, we take the endogenous prob-ability of reporting sick into account. We use administrative register data on vacancy referrals by case workers. We estimate multi-spell duration models with selection on unobserved characteristics.

2012-01-23 JProf. Dr. Alexander Kriwoluzky
(Universität Bonn)

Toward a Taylor rule for fiscal policy

This paper presents a procedure to determine policy feedback rules in dynamic stochastic general equilibrium (DSGE) models. We illustrate our approach with fiscal feedback rules for tax instruments in a standard medium-scale DSGE model. First, we approximate the optimal dynamic behavior of the economy using simple linear feedback rules. Then we calculate the elasticities of the model variables’ moments with respect to the feedback coefficients. The feedback coefficients associated with the highest elasticities form the policy feedback rules to be estimated. Our results stress the importance of carefully modeled fiscal tax policy in two dimensions: (i) with respect to the dynamic responses of fiscal policy to exogenous shocks and (ii) with respect to the historical shock decomposition of fiscal policy.

2012-01-16 Prof. Dr. Andreas Lange
(Universität Hamburg)
Der Termin muss leider ausfallen!
2012-01-09 Prof. Dr. Stephan Klasen
(Universität Göttingen )

Measuring Vulnerability to Poverty using Long-Term Panel Data

We investigate the accuracy of ex ante assessments of vulnerability to income poverty using cross-sectional data and panel data. We use long-term panel data from Germany and apply different regression models, based on household covariates and previous-year equivalence income, to classify a household as vulnerable or not. Predictive performance is assessed using the Receiver Operating Characteristics (ROC), which takes account of false positive as well as true positive rates. Estimates based on cross-sectional data are much less accurate than those based on panel data, but for Germany, the accuracy of vulnerability predictions is limited even when panel data are used. In part this low accuracy is due to low poverty incidence and high mobility in and out of poverty.



Termin Referent/in Thema
2011-12-12 Dr. Guido Schwerdt
(Ifo-Institut München)

The Impact of Alternative Grade Configurations on Student Outcomes trough Middle and High School

We use statewide administrative data from Florida to estimate the impact of attending public schools with different grade configurations on student achievement through grade 10. To identify the causal effect of structural school transitions, we use student fixed effects and instrument for middle and high school attendance based on the terminal grade of the school attended in grades 3 and 6, respectively. Consistent with recent evidence from other settings, we find that students moving from elementary to middle school in grade 6 or 7 suffer a sharp drop in student achievement in the transition year. We confirm that these achievement drops occur in nonurban areas and persist through grade 10, by which time most students have transitioned into high school. We also find that middle school entry increases student absences and is associated with higher grade 10 dropout rates. Transitions to high school in grade nine cause a smaller one-time drop in achievement but do not alter students’ performance trajectories.

2011-12-05 Prof. Rosa Ferrer
(Universitat Pompeu Fabra)

Performance Pay, Gender Inequality and Young Lawyers

This paper studies the gender earning gap among associate lawyers in the United States. The legal profession traditionally uses performance pay to reward lawyers. We find that, while individual and firm characteristics can explain up to 50 percent of the gender earnings gap, performance measures, namely, hours billed and new client revenue, can explain the remaining part of the gap. To understand why female lawyers perform worse than male lawyers, we analyze three hypotheses: explicit discrimination, child-rearing, and differences in preferences. The presence of young children and differences in partner-aspirations can explain differences in performance.

2011-11-21 Dr. Henning Weber
(Institut für Weltwirtschaft Kiel)

Money as Indicator for the Natural Rate of Interest

The natural interest rate is of great relevance to central banks, but it is difficult to measure.We show that in a standard microfounded monetary model, the natural interest rate comoves with a transformation of the money demand that can be computed from actual data. The co-movement is of a considerable magnitude and independent of monetary policy. An optimizing central bank that does not observe the natural interest rate can take advantage of this co-movement by incorporating the transformed money demand, in addition to the observed output gap and inflation, into a simple but optimal interest rate rule. Combining the transformed money demand and the observed output gap provides the best information about the natural interest rate.

2011-11-14 Prof. Dr. Ulrich Kaiser
(Universität Zürich)

The role of public researcher mobility for industrial innovation

Scientific knowledge is an important ingredient in the innovation process. Drawing on the literature on the relationship between science and technology, organizational learning theory, and the absorptive capacity perspective, this paper scrutinizes the importance of mobility of university scientists for firms' innovative activities. Combining patent data and matched employer-employee data for Danish firms, we are able to detect nearly all labor mobility of R&D workers for an entire economy from 1999 to 2004. We find that firm joiners contribute more to innovative activity than stayers. We also observe that newly hired university researchers give a stronger contribution to innovative activity than newly hired recent graduates or joiners from firms, but only when firms have recent experience in hiring university researchers. Moreover, we find that firms' recent experience in hiring university researchers enhances the effect of newly hired recent graduates' contribution to innovation.

2011-11-07 Prof. Dr. Rainald Borck
(Universität Passau)

Adieu Rabenmutter - The effect of culture on fertility, female labour supply, the gender wage gap and childcare

This paper studies the effect of cultural attitudes on childcare provision, fertility, female labour supply and the gender wage gap. Cross-country data show that fertility, female labour force participation and childcare are positively correlated with each other, while the gender wage gap seems to be negatively correlated with these variables. The paper presents a model with endogenous fertility, female labour supply and childcare choices which fits these facts. There may exist multiple equilibria: one with zero childcare provision, low fertility and female labour supply and high wage gap, and one with high childcare provision, high fertility and female labour supply and low wage gap.

2011-10-31 Dr. Christian Seel
(HCM, Universität Bonn)

Coninuous Time Contests

This paper introduces a contest model in continuous time in which each player decides when to stop a privately observed Brownian motion with drift and incurs costs depending on his stopping time. The player who stops his process at the highest value wins a prize.

Under mild assumptions on the cost function, we prove existence and uniqueness of the Nash equilibrium outcome, even if players have to choose bounded stopping times. We derive a closed form of the equilibrium strategy and distribution. If the noise vanishes, the equilibrium outcome converges to - and thus selects - the symmetric equilibrium outcome of an all-pay auction. For positive noise levels, results differ from those of all-pay contests with complete information - for instance, participants make positive profits. We show that for two players and constant costs, the profits of each participant increase for higher costs of research, higher volatility, or lower productivity of each player. Hence, participants prefer a contest design which impedes research progress.

2011-10-17 Prof. Jörg Spenkuch
(University of Chicago)

Adverse Selection and Moral Hazard Among the Poor: Evidence from a Randomized Experiment

Not only does economic theory predict high-risk individuals to be more likely to purchase insurance, but insurance coverage is also thought to crowd out precautionary activities. In spite of stark theoretical predictions, there is conflicting empirical evidence on adverse selection, and evidence on ex ante moral hazard is very scarce. Using data from the Seguro Popular Experiment in Mexico, this paper documents patterns of selection on observables into health insurance as well as the existence of non-negligible ex ante moral hazard. More specifically, the findings indicate that (i) agents in poor self-assessed health prior to the intervention have, all else equal, a higher propensity to take up insurance; and (ii) insurance coverage reduces the demand for self-protection in the form of preventive care. Curiously, however, individuals do not sort based on objective measures of their health.

2011-07-04 Dr. Luca Paolo Merlino
(Université Libre de Bruxelles)

Endogenous job contact networks

We develop a model where workers, anticipating the possibility of unemployment, invest in connections to access information about available jobs. The investment in connections is high when the job separation rate is moderate, otherwise the investment in connections is low. The response of network investment to labor market conditions generates novel predictions. In particular, the probability that a worker finds a new job via his connections increases in the separation rate, when the separation rate is low, and it decreases otherwise. These predictions are supported by the empirical patterns which we document for the UK labor market.

2011-06-27 Prof. Dr. Robert Nuscheler
(Universität Augsburg)

The Political Economy of Long-Term Care

We build a two-dimensional political economy model to explain the provision and financing of long-term care and income redistribution. Voting agents differ in need and income opening up two conflicts: one sets families with disabled parents, who are in favor of a public long-term care program, against the ones without such parents who oppose public financing. The other sets the poor against the rich with the former preferring heavier income taxation than the latter. We show that a structure induced equilibrium always exists and that it is unique if informal care is provided in equilibrium. The equilibrium not only explains the negative association of income inequality and long-term care financing but also allows predictions about how demographic change might impact long-term care arrangements and expenses.

2011-06-06 Prof. Emin Karagözoglu
(Bilkent University Ankara)

A noncooperative support for equal division in estate-divison problems

We consider estate division problems, a generalization of bankruptcy problems. We show that in a direct revelation claim game, if the underlying division rule satisfies efficiency, equal treatment of equals, and weak order preservation, then all (pure strategy) Nash equilibria induce equal division. Next, we consider division rules satisfying efficiency, equal treatment of equals, and claims monotonicity. For claim games with at most three agents, again all Nash equilibria induce equal division. Surprisingly, this result does not extend to claim games with more than three agents. However, if nonbossiness is added, then equal division is restored.

2011-05-30 Prof. Dr. Gernot Müller
(Rheinische Friedrich-Wilhelm-Universität Bonn)
Sovereign risk and the effects of fiscal retrenchment in deep recessions

We analyze the effects of government spending cuts on economic activity in an environment of severe fiscal strain, as reflected by a sizeable risk premium on government debt. Specifically, we consider a “sovereign risk channel,” through which sovereign default risk spills over to the rest of the economy, raising funding costs in the private sector. Our analysis is based on a variant of the model suggested by C´urdia and Woodford (2009). It allows for costly financial intermediation and inter-household borrowing and lending in equilibrium, but maintains the tractability of the baseline New Keynesian model. We show that, if monetary policy is constrained in offsetting the effect of higher sovereign risk on private-sector borrowing conditions, the sovereign risk channel exacerbates indeterminacy problems: private-sector beliefs of a weakening economy can become self-fulfilling. Under these conditions, fiscal retrenchment can limit the risk of macroeconomic instability. In addition, if fiscal strain is very severe and monetary policy is constrained for an extended period, fiscal retrenchment may actually stimulate economic activity.

2011-05-16 Prof. Dr. Johannes Rincke
(Universität Erlangen-Nürnberg)

Electoral Competition and Endogenous Barriers to Entry

As institutions matter for political and economic outcomes, they are (at least partly) shaped by the interests of political agents acting under these limitations. However, empirical evidence documenting such endogenous change of institutions is scarce. We address the issue by examining the link between the degree of electoral competition and the design of ballot access restrictions in the United States. Exploiting exogenous variation in electoral competition at the state level induced by the federal Voting Rights Act of 1965, our main finding is that ballot access rules have been systematically tightened in response to stronger electoral competition.

2011-05-02 Prof. Dr. Thomas Laubach
(Goethe-Universität Frankfurt a.M.)

Long-run growth expectations and global imbalances

Discussions of the international dimension of the global economic crisis have frequently focused on the build-up of large current account "imbalances" since the mid-1990s. This paper examines the extent to which the U.S. current account can be understood in a purely real open-economy DSGE model, were agents' perception of long-run growth evolves over time in response to changes in productivity. We first show that long-run growth forecasts based on filtering actual productivity growth comove strongly with survey measures of expectations. Simulating the model, we find that including data on U.S. TFP growth and the world real interest rate can, under standard parametrizations of our model, explain the evolution of the U.S. current account quite closely. With household preference that allow positive labor supply effects after favorable news of future income, we can also generate output movements in line with the data.

2011-04-11 Dipl.-Vw. Sebastian Siegloch
(Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA))

The Politicians’ Wage Gap: Insights from German Members of Parliament

Using a unique dataset of German members of parliament with information on total earnings including outside income, this paper analyzes the politicians’ wage gap (PWG). After controlling for observable characteristics as well as accounting for selection into politics, we find a positive PWG which is statistically and economically significant. It amounts to 40-60% compared to citizens with an executive position. Hence, we show that the widely held claim that politicians would earn more in the private sector is not confirmed by our data. Our findings are robust with respect to potential unobserved confounders. We further show that the PWG exceeds campaigning costs and cannot be justified by extraordinary workload. Hence, our results suggest that part of the PWG can be interpreted as rent extraction. This calls for a reform of the regulation of outside earnings, which account for a sizeable share of the wage premium.

2011-04-04 Prof. Ron Siegel
(Northwestern University)

Asymmetric Contests with Interdependent Valuations and Incomplete Information

I show that a unique equilibrium exists in a two-player all-pay auction with asymmetric independent discrete signal distributions and asymmetric interdependent valuations.

2011-01-31 Dr. Holger Bonin
(ZEW Mannheim)
East Germans in West Germany: Pioneers of Gender Equality?
2011-01-24 Prof. Konrad Stahl, Ph.D.
(Universität Mannheim)

Who should pay for certification

Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer - the seller - follows from a nontrivial analysis revealing a clear intuition. Buyer-induced certification acts as an inspection device, seller-induced certification as a signalling device. Seller-induced certification maximizes the certifier’s profit and social welfare. This suggests the general principle that certification is, and should be induced by the better informed party. The results are reflected in a case study from the automotive industry, but apply also to other markets - in particular the financial market.

2011-01-17 Dr. Ansgar Rannenberg
(Belgische Nationalbank)

The Taylor principle and (in-)determinacy in a New Keynesian model with hiring frictions and skill loss

We introduce skill decay during unemployment into Blanchard and Gali's (2008) New-Keynesian model with hiring frictions and real-wage rigidity. Plausible values of quarterly skill decay and realwage rigidity turn the long-run marginal cost-unemployment relationship positive in a "European" labour market with little hiring but not in a fluid "American" one. If the marginal cost-unemployment relationship is positive, determinacy requires a passive response to inflation in the central bank's interest feedback rule if the rule features only inflation. Targeting steady state output or unemployment helps to restore determinacy. Under indeterminacy, an adverse sunspot shock increases unemployment extremely persistently.



Termin Referent/in Thema
2010-11-29 Prof. Dr. Stefan Traub
(Universität Bremen)
Redistribution and Voting for Reform: An Experimental Study
2010-11-15 Dr. Jan Heufer
(Technische Universität Dortmund)
Crime, Inequality, and the Private Provision of Security
2010-11-08 Prof. Dr. Winfried Königer
(Queen Mary University of London)
Debt Portfolios
2010-10-25 Dr. Matthias Hanauske
(Goethe-Universität Frankfurt am Main)
Introduction to Quantum Game Theory
2010-10-18 Dr. Yiquan Gu
(Technische Universität Dortmund)
Wage and Employment Effects of Workplace Representation: A “Right to Co-Manage” Model
2010-07-19 Prof. Dr. Burkhard Heer
(Freie Universität Bozen)
Termin fällt leider aus
2010-07-05 Prof. Dr. Katrin Hussinger
(Universität Maastricht)
The contribution of corporate entrepreneurship to radical innovation
2010-06-28 Prof. Dr. Gerd Mühlheußer
(Universität Bielefeld)
Contracts as Rent Seeking Devices: Evidence from German Soccer
2010-06-21 Prof. Dr. Michael Roos
(Ruhr-Universität Bochum)
An experiment on consumption responses to future prices and interest rates
2010-06-14 Prof. Dr. Stefan Felder
(Universität Duisburg-Essen)
Optimale Regulierung von off-label use von Arzneimitteln
2010-06-07 Prof. Dr. Andreas Roider
(Universität Heidelberg)
Moral Hazard, One-Sided Commitment, and Endogeneous Options
Prof. Gerhard Glomm
(Indiana University of Bloomington)
Why do education vouchers fail?
2010-05-17 Prof. Dr. Udo Kreikemeier
Universität Tübingen
Why Foreign Ownership May be Good for You
2010-05-10 Prof. Dr. Thomas Eichner
(Fernuniversität Hagen)
Carbon leakage, the green paradox and perfect future markets
2010-05-03 Dr. Bettina S. Klose
(Universität Zürich)
Extremism Drives Out Moderation
2010-04-26 PD Dr. Burkhard Hehenkamp
(Technische Universität Dortmund)
The Inefficiency of Market Transparency – A Model with Endogeneous Entry
2010-04-19 Prof. em. Joachim Rosenmüller
(Universität Bielefeld)
Bargaining under uncertainty - the superadditive solution on Cephoidal games
2010-04-12 Prof. Dr. Claudia M. Buch
(Universität Tübingen)
Macroeconomic Factors and Bank Risk
2010-02-01 Prof. Dr. Peter Funk
(Universität zu Köln)
Affluence, Apathy, and the Pleasure of Activity
2010-01-25 Prof. Dr. Andreas Knabe
(Freie Universität Berlin)
Dissatisfied with life, but having a good day: time-use and well-being of the unemployed
2010-01-11 Dr. Michael Overesch
(Universität Mannheim)
Tax-Rate Differentials, Internal Debt Financing, and the Effectiveness of Anti-Avoidance Rules



Termin Referent/in Thema
2009-12-14 Prof. Dr. Sebastian Kessing
(Universität Siegen)
Discriminatory indirect taxation in tax competition
2009-12-07 Dr. Susanne Ohlendorf
(Universität Bonn)
Signaling and Outside Option
2009-11-30 Prof. Dr. Gerhard Illing
(Ludwig-Maximilians-Universität München)
Endogenous Systemic Liquidity Risk
2009-11-23 Dr. Marc Oliver Rieger
(Universität Zürich)
Evolutionary Stability of Prospect Theory Preferences
2009-11-16 Dr. Jan Vandekerckhove
(Katholieke Universiteit Leuven)
Market performance implications of the transfer price rule
2009-11-09 Prof. Dr. Axel Ockenfels
(Universität zu Köln)
Engineering Trust: Reciprocity in the Production of Feedback Information
2009-11-02 Dr. Rebecca Echávarri
(University of the Basque Country)
Sustainability awareness, tripple bottom line conventions and change
2009-10-26 Prof. Bernd Fitzenberger, Ph.D.
(Universität Freiburg)
The Heterogeneous Effects of Training Incidence and Duration on Labor Market Transitions
2009-10-19 Dr. Lars Koch-Metzger
(Universität Bielefeld)
Voronoi Languages
2009-07-20 Prof. Dr. Christian Kanzow
(Universität Würzburg)
Generalized Nash Equilibrium Problems
2009-07-13 Prof. Dr. Jürgen von Hagen
(Universität Bonn)
Financial Development and the Patterns of International Capital Flows
2009-07-06 PD Dr. Michael Bräuninger
(Hamburgisches WeltWirtschaftsInstitut (HWWI))
Should I Stay or Should I Go? Regional Mobility and Social Capital
2009-06-29 Dr. Melanie Arntz
(ZEW Mannheim)
Can public employment subsidies render the German construction sector weather proof?
2009-06-22 Prof. Dr. Alexander Kemnitz
(Technische Universität Dresden)
Native Welfare Losses from High Skilled Immigration
2009-06-15 Prof. Dr. Carl Christian von Weizsäcker
(Max Planck Institute for Research on Collective Goods / Bonn)
Public debt - just in case
2009-06-08 Prof. Dr. Tom Krebs
(Universität Mannheim)
Titel wird noch bekannt gegeben
2009-05-25 Prof. Jeroen Hinloopen
(University of Amsterdam)
Going once, going twice, reported! Cartel actitity and the effectiveness of leniency programs in experimental auctions
2009-05-18 PD Dr. Ralf Wilke
(University of Nottingham)
Bounds for Competing risks Models using Administrative Unemployment Duration Data
2009-05-11 Prof. Christian Stoltenberg
(University of Amsterdam)
Titel wird noch bekannt gegeben
2009-05-04 Prof. Dr. Dinko Dimitrov
(Universität München)
Coalitional matchings
2009-04-27 PD Dr. Burkhard Hehenkamp
(Technische Universität Dortmund)
Survival at the Center - The Stability of Minimum Differentiation



VWL (Mikroökonomie) Sekretariat
Tel.: 0231 755-3242