Publications

Many intertemporal trade-offs are unbalanced: while the advantages of options are concentrated in a few periods, the disadvantages are dispersed over numerous periods. We provide novel experimental evidence for “concentration bias,” the tendency to overweight advantages that are concentrated in time. Subjects commit to too much overtime work that is dispersed over multiple days in exchange for a bonus that is concentrated in time: concentration bias increases subjects’ willingness to work by 22.4% beyond what standard discounting models could account for. In additional conditions and a complementary experiment involving monetary payments, we study the mechanisms behind concentration bias and demonstrate the robustness of our findings.

Using hand-collected and web-scraped data on 7208 matches and 3266 players from the highest division of German male football, this paper examines how birthplace diversity affects team performance. The results of two instrumental variable analyses suggest that birthplace diversity has a hump-shaped effect on team performance. To explain our result, we argue that nationally diverse teams have a wider range of skills and face greater communication barriers.

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dc.contributor.author: Dufourt, Frédéric; Kerdelhué, Lisa

We investigate cheating in work groups, to empirically test the idea of an honest workplace environment as a determinant of performance. Three individuals receive team-based performance pay for executing a real-effort task. In addition, two of them have the opportunity to obtain a bonus in a dice game, which allows cheating without exposure by misreporting a secret die roll. We are particularly interested in the behavioral response of the bystander as the potential witness to the dishonest action. To identify the implications of lies at work, the rules of the bonus game were altered to randomly prevent cheating, or not, across treatment conditions while holding the monetary consequences constant. Survey data enables us to analyze effect heterogeneity and to explore mechanisms underlying behavioral responses. We begin our analysis by estimating the mean lying rate and find that the opportunity-to-cheat is exploited in roughly 42% of cases. The probability of misreporting increases if the cheater's partner in crime is male. Contrary to claims on the importance of honesty at work, we do not observe a reduction in performance when cheating takes place, neither for the bystander nor for the whole team. Bounded awareness could be an explanation, as we find substantial evidence for effect heterogeneity along the lines of information preferences. Bystanders with higher preferences for inconvenient information provide relatively low task performance, compared to those with lower information preferences, who seem to turn a blind eye to the dishonest action of their co-workers by putting increased effort into their work.

COVID-19 vaccination rates slowed in many countries during the second half of 2021, along with the emergence of vocal opposition, particularly to mandated vaccinations. Who are those resisting vaccination? Under what conditions do they change their minds? Our three-wave representative panel survey from Germany allows us to estimate the dynamics of vaccine opposition, providing the following answers. Without mandates, it may be difficult to reach and to sustain the near-universal level of repeated vaccinations apparently required to contain the Delta, Omicron, and likely subsequent variants. But mandates substantially increase opposition to vaccination. We find that few were opposed to voluntary vaccination in all three waves of the survey. They are just 3.3% of our panel, a number that we demonstrate is unlikely to be the result of response error. In contrast, the fraction consistently opposed to enforced vaccinations is 16.5%. Under both policies, those consistently opposed and those switching from opposition to supporting vaccination are sociodemographically virtually indistinguishable from other Germans. Thus, the mechanisms accounting for the dynamics of vaccine attitudes may apply generally across societal groups. What differentiates them from others are their beliefs about vaccination effectiveness, their trust in public institutions, and whether they perceive enforced vaccination as a restriction on their freedom. We find that changing these beliefs is both possible and necessary to increase vaccine willingness, even in the case of mandates. An inference is that well-designed policies of persuasion and enforcement will be complementary, not alternatives.

We propose to exploit stochastic volatility for statistical identification of structural vector autoregressive models (SV-SVAR). We discuss full and partial identification of the model and develop efficient EM algorithms for maximum likelihood inference. Simulation evidence suggests that the SV-SVAR works well in identifying structural parameters also under misspecification of the variance process, particularly if compared to alternative heteroscedastic SVARs. We apply the model to study the importance of oil supply shocks for driving oil prices. Since shocks identified by heteroscedasticity may not be economically meaningful, we exploit the framework to test instrumental variable restrictions which are overidentifying in the heteroscedastic model. Our findings suggest that conventional supply shocks are negligible, while news shocks about future supply account for almost all the variation in oil prices.

Distinguishing between status spillovers and status ripples, we argue that sudden positive status shifts create status ripples when the social actors experiencing the status shifts are more constrained from exploiting their higher status than the social actors to whom they are affiliated. Specifically, we examine the status ripple paradox that the status effects experienced by the affiliated actors sometimes are as strong, or even stronger, as the direct status effects experienced by the ascending actors themselves. Focusing empirically on prestigious CEO awards from U.S. news magazines, we examine the consequences of positive status shifts for the awarded CEOs and the CEOs who are on the boards of directors of the awarded CEOs’ firms. We find evidence of status ripples in CEO compensation by showing that awarded CEOs have relatively greater immediate but smaller subsequent increases in compensation, which results in lower overall compensation effects for the awarded CEOs. Moreover, we provide empirical evidence of the theoretical mechanisms behind the status ripple paradox by showing that external constraints in the form of increased media and analyst attention and increased expectations affect the status ripple effect.

The teaching of financial literacy through game-based approaches is legitimized by the ability of game-based learning (GBL) to simulate financial decisions that young people have not yet encountered in their lives due to limited legal capacity and economic dependence on the parental home. Although results on the general effectiveness of games are already available, the question about for which students GBL is effective in teaching financial literacy has not yet been researched in depth. Based on pedagogical interest theory, a pre–post design (n = 50; 30 female students) was conducted to investigate the effects of high school students’ individual prerequisites on their game experience and their development of situational interest by playing an analog game and debriefing. The main findings indicate that a higher level of prior motivation for this topic has a positive effect on game experience and situational interest. A high level of prior knowledge and leisure activities concerning finance may have a somewhat negative effect. Such games are particularly suitable for students who are aware of the subjective significance of finance but have not previously had the opportunity to engage with this topic for different reasons.

Aggregation tools transform multidimensional data into indices. To investigate how the design of an aggregation process affects regression results, we build democracy indices that differ regarding their scale and aggregation function. Using the democracy–growth nexus as a testing ground, we illustrate that the choice of the aggregation procedure significantly affects OLS and 2SLS estimates since different methods produce systematically different index values for observations at the lower and upper end of the autocracy–democracy spectrum. We also illustrate that dichotomous measures produce significantly smaller OLS estimates than continuous measures due to lower discriminating power. Whether continuous and dichotomous indicators create different 2SLS estimates depends on their design. Because of the methodological similarities of democracy indicators and other social science indicators, we expect similar consequences for other empirical analyses.

We conduct a comprehensive pricing study of additional tier 1 ​(AT1) contingent convertible (CoCo) bonds issued by Eurozone banks. By accounting for an extensive set of pricing determinants related to the regulatory framework, the security design and key market variables, we show that the regulatory concept of the maximum distributable amount (MDA) introduced in 2016 has a significant and economically meaningful impact on CoCo spreads. Furthermore, we examine whether the market stress induced by the COVID-19 pandemic influences the determinants of CoCo spreads. Our results show that the pricing factors remain stable throughout tranquil and volatile periods.

In a randomized controlled trial, a large retail chain’s Chief Executive Officer (CEO) sets new goals for the managers of the treated stores by asking them to “do what they can” to reduce the employee quit rate. The treatment decreases the quit rate by a fifth to a quarter, lasting nine months before petering out, but reappearing after a reminder. There is no treatment effect on sales. Further analysis reveals that treated store managers spend more time on human resources (HR) and less on customer service. Our findings show that middle managers are instrumental in reducing personnel turnover, but they face a trade-off between investing in different activities in a multitasking environment with limited resources. The treatment does produce efficiency gains. However, these occur only at the firm level.