Publications

The authors conduct an empirical analysis of a hand-collected sample of 2,376 turnovers of soccer managers in the four major English leagues in the seasons from 1949-1950 to 2007-2008. While the relation between the probability of a manager being fired and long-term performance remained remarkably stable, both the absolute frequency and the sensitivity of firing decisions on the outcome of recent matches steadily and significantly increased during the six decades covered by the sample. This is likely to reflect the increased level of competition in and economic importance of the English soccer leagues.

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dc.contributor.author: Gurtner, Jean-Luc

Financial returns exhibit conditional heteroscedasticity, asymmetric responses of their volatility to negative and positive returns (leverage effects) and fat tails. The αα-stable distribution is a natural candidate for capturing the tail-thickness of the conditional distribution of financial returns, while the GARCH-type models are very popular in depicting the conditional heteroscedasticity and leverage effects. However, practical implementation of αα-stable distribution in finance applications has been limited by its estimation difficulties. The performance of the indirect inference approach using GARCH models with Student’s tt distributed errors as auxiliary models is compared to the maximum likelihood approach for estimating GARCH-type models with symmetric αα-stable innovations. It is shown that the expected efficiency gains of the maximum likelihood approach come at high computational costs compared to the indirect inference method.

Despite the prevalence of both competitive forces and patterns of collaboration within academic communities, studies on research productivity generally treat universities as independent entities. By exploring the research productivity of all academic economists employed at 81 universities and 17 economic research institutes in Austria, Germany, and German-speaking Switzerland, this study finds that a research unit's productivity negatively depends on that of neighboring research units weighted by inverse distances. This significant and exemplary robust negative relationship is compatible with the notion of competition for priority of discovery among individual researchers and the universities that employ them, and with the notion that the willingness to relocate decreases with distance. In addition, the empirical results support the hypotheses that collaboration and that the existence of economies of scale increase research productivity.

We examine the incentive effects of funding contracts on entrepreneurial effort and on allocative efficiency. We experiment with funding contracts that differ in the structure of investor repayment and, thus, in their incentives for the provision of entrepreneurial effort. Theoretically the replacement of a standard debt contract by a repayment-equivalent non-monotonic contract reduces effort distortions and increases efficiency. Likewise, distortions can be mitigated by replacing outside equity by a repayment-equivalent standard-debt contract. We test both hypotheses in the laboratory. Our results reveal that the incentive effects of funding contracts must be experienced before they are reflected in observed behavior. With sufficient experience, observed behavior is either consistent with or close to theoretical predictions and supports both hypotheses. If we allow for entrepreneur-sided manipulations of project outcomes, we find that non-monotonic contracts lose much of their appeal.

From a Western perspective, state capitalism epitomizes one of the main impediments to sustained growth in China. I reached this conclusion without considering the many facets of state capitalism in the Chinese growth process. Having outlined some basic features of Chinese state capitalism in section one, in section two I focus on China's industrial policy to promote innovative entrepreneurship. Two sets of policies have played a key role: (a) the decision to build up a team of national global players, and (b) the decision to "grasp the big and let go of the small" (i.e., to retain big firms in state ownership but privatize small firms). This has resulted in the David-Goliath symbiosis, which is one of the cornerstones of China's economic success. Chinese policy decision-making is driven by networks (between public officials and managers of leading private and state-owned enterprises), the pervasive role of the new elite, and a highly developed patronage system. I describe this in section three. The focus in section four is on public investment in infrastructure to develop the hinterland and overcome the middle income trap. In the final section, I assess the methodology of recent Western evaluations of Chinese policy in the light of the global economic crisis.

In many cases individuals benefit differently from the provision of a public good. We study in a laboratory experiment how heterogeneity in returns and uncertainty about the own return affects unconditional and conditional contribution behavior in a linear public goods game. The elicitation of conditional contributions in combination with a within subject design allows us to investigate belief-independent and type-specific reactions to heterogeneity. We find that, on average, heterogeneity in returns decreases unconditional contributions but affects contributions only weakly. Uncertainty in addition to heterogeneity reduces conditional contributions slightly. Individual reactions to heterogeneity differ systematically. Selfish subjects and one third of conditional cooperators do not react to heterogeneity whereas the reactions of the remaining conditional cooperators vary. A substantial part of heterogeneity in reactions can be explained by inequity aversion with respect to different reference groups.

A series of studies in experimental philosophy have revealed that people blame others for foreseen negative side effects but do not praise them for foreseen positive ones. In order to challenge this idea, also called the Knobe effect, we develop a laboratory experiment using monetary incentives. In a game-theoretic framework we formalize the two vignettes in a neutral way, which means that we abstain from the use of any specific language terms and can easily control and vary the economic parameters of the situation. We confirm the Knobe effect in one situation and present situations in which the effect vanishes or even reverses. Our results are in line with a theoretical approach where the assessment of intention is not based on the action itself but on the underlying motive – as modelled in Levine (1998).