Latest Publications
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This paper considers job separations in a search model with labour market matching and moral hazard. Both workers and firms value productive matches and take actions to increase match stability: firms offer a share of match surplus to provide workers with correct incentives and workers take hidden actions (effort) negatively affecting the match separation rate. Heterogeneous productivity draws combined with the moral hazard problem give rise to match-specific endogenous separation rates. Additionally a counteraction of two effects - match stability and match scarcity - explains an observed asymmetric shape of a wage probability density function with a unique interior mode on the support.
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This dissertation consists of three self-contained research papers. Each focuses on a specific topic in game theory. Chapter 1 develops two models where two firms engaging in quantity competition have to decide on the timing of production. The innovation of these models is not only the introduction of imperfect information about market demand, but also the possibility of endogenously resolving this uncertainty by carrying out market research. I show that the well-established results in Hamilton and Slutsky (1990) and Sadanand and Sadanand (1996) represent two particular cases, corresponding to high and low costs of market research respectively. Furthermore, I demonstrate that endogenous leadership is the unique outcome when the cost of market research is intermediate, a situation, which to the author’s knowledge, is not found in any previous literature. In Chapter 2, We develop a general model of imitative learning with asymmetric memory, and investigate several applications within such a framework. We show that the demographic configuration of memory affects the long-run consequences of interactions among decision-makers in a nontrivial way. In the learning dynamics of Cournot oligopoly, we find that as long as there is at least one firm without memory, the unique stochastically stable state is the Walrasian equilibrium. We extend this result to aggregative games. In coordination games with a trade-off between efficiency and risk, we show a more complex picture. The selection of the long run equilibrium depends not only on the number of players with memory, but also on their nontrivial memory length. We provide cut-off values of the two parameters above, and show how they determine which equilibrium will be selected in the long run. Chapter 3 investigates the interaction between policies and social conventions. A model of “asymmetric rationality” is developed here, where the rational social planners set policies to control the coordination and migration of boundedly rational residents in two locations. If the social planners are only concerned with the efficiency of their respective locations, multiple Nash equilibria will exist in the game among social planners, leading to either globally-unified risk-dominant and yet inefficient conventions, or coexistence of conventions. If the scale of the locations is in any way important to the social planners, then it is likely that the social planners will completely forbid migration, leading to inefficient coordination in both locations.
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(2010): Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Goods Experiments American Economic Review. 2010, 100(1), pp. 541-556. Available under: doi: 10.1257/aer.100.1.541
One lingering puzzle is why voluntary contributions to public goods decline over time in experimental and real-world settings. We show that the decline of cooperation is driven by individual preferences for imperfect conditional cooperation. Many people's desire to contribute less than others, rather than changing beliefs of what others will contribute over time or people's heterogeneity in preferences makes voluntary cooperation fragile. Universal free riding thus eventually emerges, despite the fact that most people are not selfish.
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This paper presents experimental evidence that tax compliance is path dependent. We show that individuals faced with the same current tax enforcement parameters, will nevertheless choose different compliance if they have faced different tax enforcement parameters in the past. This finding has important policy implications. For instance, legal harmonization in the EU cannot be expected to reliably yield similar behavior in countries with different legal histories.
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(2010): Professionelle Fehlerkompetenz - Operationalisierung einer vernachlässigten Kompetenzfacette von (angehenden) Lehrkräften Wirtschaftspsychologie. 2010, 12(4), pp. 17-28
It is commonly held that it is possible to develop professional competence by learning from errors in the workplace and at school. Consequently much research in the field of teaching and learning has been done into error types, how learning from errors is possible and how teacher and trainer behaviour influences the chance to learn from errors. This article focuses on research into teachers responses to student errors. The analysis is based in commercial schools with specific focus on the field of bookkeeping/accounting.
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(2010): General Ability and Specialization : Evidence from Penalty Kicks in Soccer Journal of Sports Economics. 2010, 12(1), pp. 81-105. ISSN 1527-0025. Available under: doi: 10.1177/1527002510371194
This article revisits the 2 × 2 penalty kick game and seeks to explain differences in mixed strategies associated with different player types and the relative performance of these player types. The authors show that (a) a kicker’s general ability is a reliable indicator of his success rate, (bi) a kicker’s specialization rate increases with his general ability, and (c) left-footed kickers who present a minority within the total population are characterized by a higher success rate. Consequently, the authors establish that more able kickers show a higher degree of specialization. Their greater specialization, however, has neither an adverse nor a beneficial impact on their success rate. All the theoretical predictions are in line with empirical evidence from the German national soccer league.
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(2010): Zur Notwendigkeit indikationsübergreifender Nutzenmaße Zeitschrift für Evidenz, Fortbildung und Qualität im Gesundheitswesen. 2010, 104(3), pp. 209-214. Available under: doi: 10.1016/j.zefq.2010.03.004
IQWiG's General Methods catalogue has raised a controversial debate among experts, and one of the major issues is the catalogue's authors decision to exclusively use indication-specific output measures for benefit assessments. In contrast, numerous critics of this approach demand that benefit be measured using a uniform scale which is valid and interpretable for all indications, such as the quality-adjusted life-year (QALY). The present article will take a critical look at the arguments put forward by IQWiG and point out the disadvantages of purely indication-specific benefit assessments. We will then explore the legal possibilities of benefit assessments independent of the type of disease, and make some suggestions for the future approach to healthcare evaluation in Germany.
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The paper presents a model of two countries competing for the international pool of talented students from the rest of the world. To relax tuition-fee competition, countries differentiate their education systems in equilibrium. While one country offers high education quality at high charges for students – the most talented ones study in this country – the other one provides lower quality and charges lower tuition fees. The regional quality-differentiation increases with the size of the international pool of talents, with the stay rate of foreign students in the host countries upon graduation and with the degree of development of the sending countries of foreign students. Compared to the welfare-maximizing education-policy, the decentralized solution is likely to imply an inefficient allocation of foreign students to the two host countries, as well as an inefficient quality differentiation.
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An apology is a strong and cheap device to restore social or economic relationships that have been disturbed. In a laboratory experiment we find that harmdoers use apologies in particular if they fear punishment and when their intentions cannot be easily inferred. After offenses with ambiguous intentionality apologizers are punished less often than nonapologizers. Victims expect an apology and punish if they do not receive one. If an apology is possible, harmdoers who apologize are punished with lower probability. An apology only affects the event of punishment but not the level of punishment. An apology does not help at all after clearly intentionally committed offenses. On the contrary, after such offenses harmdoers do better not to apologize since sending an apology in this situation strongly increases punishment compared to remaining silent.
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(2010): Förderung kognitiver und nichtkognitiver Bildungsziele durch problemorientiertes Lernen : Befunde aus dem schweizerischen Projekt APU WUTTKE, Eveline, ed. and others. Dimensionen der Berufsbildung : Bildungspolitische, gesetzliche, organisationale und unterrichtliche Aspekte als Einflussgrößen auf berufliches Lernen. Opladen: Budrich, 2010, pp. 21-32. ISBN 978-3-86649-316-2
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dc.contributor.author: Oepke, Maren; Eberle, Franz
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This note solves the puzzle of estimating degenerate Wishart Autoregressive processes, introduced by Gourieroux, Jasiak and Sufana (2009) to model multivariate stochastic volatility. It derives the asymptotic and empirical properties of the Method of Moment estimator of the Wishart degrees of freedom subject to different stationarity assumptions and specific distributional settings of the underlying processes.
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This paper focuses on the role personality traits play in determining individual unemployment duration. We argue that a worker's job search intensity is decisively driven by her personality traits, reflected in her propensity to motivate and control herself while searching for a job. Moreover, personality traits, in as far as they can be signaled to a potential employer, may also enhance the probability of receiving and accepting a job offer. For our econometric duration analysis, we use the well-accepted taxonomy "Big Five" to classify personality traits. Based on individual unemployment data taken from the German Socio-Economic Panel (SOEP) our empirical findings reveal that the personality traits Conscientiousness and Neuroticism have a strong impact on the instantaneous probability of finding a job, where the former has a positive effect and the latter has a negative effect. The direction of the effect on the subsequent employment duration is the opposite. We do not find any significant effects of the personality traits Extraversion and Agreeableness on the duration of unemployment. The personality trait Openness eases finding a job only for female unemployed workers and workers with migration background.
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(2010): The monotonicity puzzle : an experimental investigation of incentive structures Business Research : BuR. 2010, 3(1), pp. 8-35. Available under: doi: 10.1007/BF03342713
Non-monotone incentive structures, which - according to theory - are able to induce optimal behavior, are often regarded as empirically less relevant for labor relationships. We compare the performance of a theoretically optimal non-monotone contract with a monotone one under controlled laboratory conditions. Implementing some features relevant to real-world employment relationships, our paper demonstrates that, in fact, the frequency of income-maximizing decisions made by agents is higher under the monotone contract. Although this observed behavior does not change the superiority of the non-monotone contract for principals, they do not choose this contract type in a significant way. This is what we call the monotonicity puzzle. Detailed investigations of decisions provide a clue for solving the puzzle and a possible explanation for the popularity of monotone contracts.
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(2010): Kompetenzförderung im Gymnasium durch das problemorientierte Unterrichtsmodell APU SCHWARZ, Bernd, ed., Peter NENNINGER, ed., Reinhold S. JÄGER, ed.. Erziehungswissenschaftliche Forschung - nachhaltige Bildung : Beiträge zur 5. DGfE-Sektionstagung "Empirische Bildungsforschung", AEPF-KBBB im Frühjahr 2009. Landau: Verlag Empirische Pädagogik, 2010, pp. 365-373. ISBN 978-3-941320-25-3
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(2010): Potenziale des Lernens aus Fehlern in Abhängigkeit von methodischen Grundentscheidungen SEIFRIED, Jürgen, ed.. Lehr-Lern-Forschung in der kaufmännischen Berufsbildung - Ergebnisse und Gestaltungsaufgaben. Stuttgart: Steiner, 2010, pp. 155-171. Zeitschrift für Berufs- und Wirtschaftspädagogik : Beiheft. 23. ISBN 978-3-515-09697-3
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dc.contributor.author: Wuttke, Eveline
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(2010): Individuelle Förderung in komplexen Lernumgebungen KREMER, Hugo, ed., Andrea ZOYKE, ed.. Grundlegung und Annäherung im Kontext von Forschungs- und Entwicklungsprojekten. Paderborn: Eusl, 2010, pp. 55-70. ISBN 978-3-940625-11-3
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(2010): The logit-response dynamics Games and Economic Behavior. 2010, 68(2), pp. 413-427. ISSN 0899-8256. Available under: doi: 10.1016/j.geb.2009.08.004
We develop a characterization of stochastically stable states for the previous termlogit-responsenext term learning previous termdynamicsnext term in games, with arbitrary specification of revision opportunities. The result allows us to show convergence to the set of Nash equilibria in the class of best-previous termresponsenext term potential games and the failure of the previous termdynamicsnext term to select potential maximizers beyond the class of exact potential games. We also study to which extent equilibrium selection is robust to the specification of revision opportunities. Our techniques can be extended and applied to a wide class of learning previous termdynamicsnext term in games.
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(2010): Human capital externalities with monopsonistic competition Economics Letters. 2010, 106(2), pp. 95-97. Available under: doi: 10.1016/j.econlet.2009.10.011
This paper provides a novel microeconomic foundation for pecuniary human capital externalities in a labor market model of monopsonistic competition. Multiple equilibria arise because of a strategic complementarity in investment decisions.
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(2010): Product liability and the virtues of asymmetric information Journal of Economics. 2010, 100(1), pp. 19-32. ISSN 0931-8658. Available under: doi: 10.1007/s00712-010-0123-6
This paper analyzes a two-period setup in which firms differ with respect to costs of care and may use care-taking to signal type to consumers, who are able to observe precaution taken only ex post. Applying the refinement of the intuitive criterion to the concept of the perfect Bayesian equilibrium, we establish a unique separating equilibrium for every share of harm borne by firms. For low levels of victim compensation, we show that (i) firms choose weakly higher care in a setting in which customers do not know the firms’ type than in a setting in which they do, and (ii) the deviation in precaution taken due to asymmetric information on firm type is welfare-improving.
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We analyze the interplay between cooperation norms and people's punishment behavior in a social-dilemma game with multiple punishment stages. By combining multiple punishment stages with self-contained episodes of interaction, we are able to disentangle the effects of retaliation and norm-related punishment. An additional treatment provides information on the norms bystanders use in judging punishment actions. Partly confirming previous findings, punishment behavior and bystanders' opinions are guided by an absolute norm. This norm is consistent over decisions and punishment stages and requires full contributions. In the first punishment stage, our results suggest a higher personal involvement of punishers, leading to a non-linearity defined by the punishers' contribution. In later punishment stages, the personal-involvement effect vanishes and retaliation kicks in. Bystanders generally apply the same criteria in all stages, also favoring retaliation in response to harsh punishment actions.