Publications

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We investigate the consequences of imperfect data privacy on information acquisition about personal health status. In a simplified game of persuasion players decide on whether or not to acquire information about their health status before searching for a matching partner (e.g. an insurance company). We contrast three institutional settings: automatic dissemination of certified test results, perfect data privacy and imperfect data privacy about certified test results (i.e. potentially involuntary dissemination). Assuming that the ex-ante expected payoff of a match with an unknown type is positive, we find that equilibria with complete information acquisition and complete information revelation exist only under perfect and imperfect data privacy whereas equilibria without any information acquisition exist under all institutional settings. We test our predictions in a laboratory experiment. Indeed, both imperfect and perfect data privacy yield almost perfect information acquisition. Automatic dissemination leads to incomplete information acquisition.

We suggest to use a factor model based backdating procedure to construct historical Euro-area macroeconomic time series data for the pre-Euro period. We argue that this is a useful alternative to standard contemporaneous aggregation methods. The paper investigates for a number of Euro-area variables whether forecasts based on the factor-backdated data are more precise than those obtained with standard area-wide data. A recursive pseudo-out-of-sample forecasting experiment using quarterly data is conducted. Our results suggest that some key variables (e.g. real GDP, inflation and long-term interest rate) can indeed be forecasted more precisely with the factor-backdated data.

We examine the incentive effects of funding contracts on entrepreneurial effort decisions and allocative efficiency. We experiment with funding contracts that differ in the structure of investor repayment and, therefore, in the incentives for entrepreneurial e ffort provision. Theoretically the replacement of a standard debt contract by a repayment-equivalent non-monotonic contract reduces e ort distortions and increases efficiency. Likewise the replacement of outside equity by a repayment-equivalent standard-debt contract mitigates distortions. We test both hypotheses in the laboratory. Our results reveal that the incentive e ffects of funding contracts need to be experienced before they reflect in observed behavior. With sufficient experience observed behavior is consistent with the theoretical predictions and supports both hypotheses. If we allow for entrepreneur-sided manipulations of the project outcome we find that non-monotonic contracts lose its appeal.

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 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 does not affects conditional 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 which accounts for different reference groups subjects compare to.

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We investigate the consequences of imperfect data privacy on information acquisition of personal health data. In a game of persuasion with ex-ante symmetric information players decide on whether or not to acquire and reveal information about their personal health status to convince a decision maker to interact. We contrast three institutional settings: automatic dissemination of acquired information, perfect data privacy and imperfect data privacy. Assuming that the ex-ante expected payoff of an interaction with an unknown type for the decision maker is positive, equilibria with complete information acquisition and complete information revelation exist only under perfect and imperfect data privacy. Equilibria without any information acquisition exist under all institutional settings. We test our predictions in a laboratory experiment. Automatic dissemination leads to incomplete information acquisition. Both imperfect and perfect data privacy yield almost complete information acquisition and thus imperfect data privacy does not reduce the amount of acquired information.

We analyze the optimal design of income transfer programs with a special focus on participation taxes and the marginal tax rates in the phase-out region. The analytical framework incorporates labor supply responses along the intensive and extensive margin, where the latter is due to a minimum hours constraint. All results are expressed in reduced form, i.e. in terms of intensive and extensive labor supply elasticities. We derive a formula for the optimal participation taxes and provide a condition under which negative participation taxes are never part of the optimal tax schedule. Concerning the marginal tax rates in the phase-out region, we develop a test for a tax-transfer system to be beyond the top of the Laffer curve and thus to be (second-best) Pareto inefficient. In such a case there would be room for tax cuts (or increases in transfers) which are self-financing and therefore constitute a Pareto improvement. Applying this test to Germany, our analysis suggests that the structure of marginal tax rates in the transfer phase-out region is (second-best) Pareto inefficient.

In this paper we introduce a new method of forecasting covariance matrices of large dimensions by exploiting the theoretical and empirical potential of using mixed-frequency sampled data. The idea is to use high-frequency (intraday) data to model and forecast daily realized volatilities combined with low-frequency (daily) data as input to the correlation model. The main theoretical contribution of the paper is to derive statistical and economic conditions, which ensure that a mixed-frequency forecast has a smaller mean squared forecast error than a similar pure low-frequency or pure high-frequency specification. The conditions are very general and do not rely on distributional assumptions of the forecasting errors or on a particular model specification. Moreover, we provide empirical evidence that, besides overcoming the computational burden of pure high-frequency specifications, the mixed-frequency forecasts are particularly useful in turbulent financial periods, such as the previous financial crisis and always outperforms the pure low-frequency specifications.

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dc.contributor.author: Pfeiffer, Friedhelm

This paper quantifies the impact of the Hartz reforms on matching efficiency, using monthly SOEP gross worker flows (1983-2009). We show that, until the early 2000s, close to 60% of changes in the unemployment rate are due to changes in the inflow rate (job separation). On the contrary, since the implementation of the reforms in the mid-2000s, the importance of the outflow rate (job finding) has been steadily increasing. This indicates that matching efficiency has improved substantially in recent years. Results from an estimated matching function - pointing to efficiency gains of more than 20% - corroborate this finding.