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- Fachgruppe Volkswirtschaftslehre (203) (remove)
The present paper proposes a novel approach for equilibrium selection in the infinitely repeated prisoner’s dilemma where players can communicate before choosing their strategies. This approach yields a critical discount factor that makes different predictions for cooperation than the usually considered sub-game perfect or risk dominance critical discount factors. In laboratory experiments, we find that our factor is useful for predicting cooperation. For payoff changes where the usually considered factors and our factor make different predictions, the observed cooperation is consistent with the predictions based on our factor.
In this paper, we study one channel through which communication may facilitate cooperative behavior – belief precision. In a prisoner’s dilemma experiment, we show that communication not only makes individuals more optimistic that their partner will cooperate but also increases the precision of this belief, thereby reducing strategic uncertainty. To disentangle the shift in mean beliefs from the increase in precision, we elicit beliefs and precision in a two-stage procedure and in three situations: without communication, before communication, and after communication. We find that the precision of beliefs increases during communication.
This paper provides novel evidence on the impact of public transport subsidies on air pollution. We obtain causal estimates by leveraging a unique policy intervention in Germany that temporarily reduced nationwide prices for regional public transport to a monthly flat rate price of 9 Euros. Using DiD estimation strategies on air pollutant data, we show that this intervention causally reduced a benchmark air pollution index by more than eight percent and, after its termination, increased again. Our results illustrate that public transport subsidies – especially in the context of spatially constrained cities – offer a viable alternative for policymakers and city planers to improve air quality, which has been shown to crucially affect health outcomes.
Leadership plays an important role for the efficient and fair solution of social dilemmas but the effectiveness of a leader can vary substantially. Two main factors of leadership impact are the ability to induce high contributions by all group members and the (expected) fair use of power. Participants in our experiment decide about contributions to a public good. After all contributions are made, the leader can choose how much of the joint earnings to assign to herself; the remainder is distributed equally among the followers. Using machine learning techniques, we study whether the content of initial open statements by the group members predicts their behavior as a leader and whether groups are able to identify such clues and endogenously appoint a “good” leader to solve the dilemma. We find that leaders who promise fairness are more likely to behave fairly, and that followers appoint as leaders those who write more explicitly about fairness and efficiency. However, in their contribution decision, followers focus on the leader’s first-move contribution and place less importance on the content of the leader’s statements.
Access to digital finance
(2024)
Financing entrepreneurship spurs innovation and economic growth. Digital financial platforms that crowdfund equity for entrepreneurs have emerged globally, yet they remain poorly understood. We model equity crowdfunding in terms of the relationship between the number of investors and the amount of money raised per pitch. We examine heterogeneity in the average amount raised per pitch that is associated with differences across three countries and seven platforms. Using a novel dataset of successful fundraising on the most prominent platforms in the UK, Germany, and the USA, we find the underlying relationship between the number of investors and the amount of money raised for entrepreneurs is loglinear, with a coefficient less than one and concave to the origin. We identify significant variation in the average amount invested in each pitch across countries and platforms. Our findings have implications for market actors as well as regulators who set competitive frameworks.
While the economic harm of cartels is caused by their price-increasing effect, sanctioning by courts rather targets at the underlying process of firms reaching a price-fixing agreement. This paper provides experimental evidence on the question whether such sanctioning meets the economic target, i.e., whether evidence of a collusive meeting of the firms and of the content of their communication reliably predicts subsequent prices. We find that already the mere mutual agreement to meet predicts a strong increase in prices. Conversely, express distancing from communication completely nullifies its otherwise price-increasing effect. Using machine learning, we show that communication only increases prices if it is very explicit about how the cartel plans to behave.
We study the effect of energy and transport policies on pollution in two developing country cities. We use a quantitative equilibrium model with choice of housing, energy use, residential location, transport mode, and energy technology. Pollution comes from commuting and residential energy use. The model parameters are calibrated to replicate key variables for two developing country cities, Maputo, Mozambique, and Yogyakarta, Indonesia. In the counterfactual simulations, we study how various transport and energy policies affect equilibrium pollution. Policies may be induce rebound effects from increasing residential energy use or switching to high emission modes or locations. In general, these rebound effects tend to be largest for subsidies to public transport or modern residential energy technology.
We conduct a laboratory experiment to study how locus of control operates through people’s preferences and beliefs to influence their decisions. Using the principal–agent setting of the delegation game, we test four key channels that conceptually link locus of control to decision-making: (i) preference for agency, (ii) optimism and (iii) confidence regarding the return to effort, and (iv) illusion of control. Knowing the return and cost of stated effort, principals either retain or delegate the right to make an investment decision that generates payoffs for themselves and their agents. Extending the game to the context in which the return to stated effort is unknown allows us to explicitly study the relationship between locus of control and beliefs about the return to effort. We find that internal locus of control is linked to the preference for agency, an effect that is driven by women. We find no evidence that locus of control influences optimism and confidence about the return to stated effort, or that it operates through an illusion of control.
We examine how the gender of business-owners is related to the wages paid to female relative to male employees working in their firms. Using Finnish register data and employing firm fixed effects, we find that the gender pay gap is – starting from a gender pay gap of 11 to 12 percent - two to three percentage-points lower for hourly wages in female-owned firms than in male-owned firms. Results are robust to how the wage is measured, as well as to various further robustness checks. More importantly, we find substantial differences between industries. While, for instance, in the manufacturing sector, the gender of the owner plays no role for the gender pay gap, in several service sector industries, like ICT or business services, no or a negligible gender pay gap can be found, but only when firms are led by female business owners. Businesses in male ownership maintain a gender pay gap of around 10 percent also in the latter industries. With increasing firm size, the influence of the gender of the owner, however, fades. In large firms, it seems that others – firm managers – determine wages and no differences in the pay gap are observed between male- and female-owned firms.
To achieve the Paris climate target, deep emissions reductions have to be complemented with carbon dioxide removal (CDR). However, a portfolio of CDR options is necessary to reduce risks and potential negative side effects. Despite a large theoretical potential, ocean-based CDR such as ocean alkalinity enhancement (OAE) has been omitted in climate change mitigation scenarios so far. In this study, we provide a techno-economic assessment of large-scale OAE using hydrated lime ('ocean liming'). We address key uncertainties that determine the overall cost of ocean liming (OL) such as the CO2 uptake efficiency per unit of material, distribution strategies avoiding carbonate precipitation which would compromise efficiency, and technology availability (e.g., solar calciners). We find that at economic costs of 130–295 $/tCO2 net-removed, ocean liming could be a competitive CDR option which could make a significant contribution towards the Paris climate target. As the techno-economic assessment identified no showstoppers, we argue for more research on ecosystem impacts, governance, monitoring, reporting, and verification, and technology development and assessment to determine whether ocean liming and other OAE should be considered as part of a broader CDR portfolio.
Systematic review and meta-analysis of ex-post evaluations on the effectiveness of carbon pricing
(2024)
Today, more than 70 carbon pricing schemes have been implemented around the globe, but their contributions to emissions reductions remains a subject of heated debate in science and policy. Here we assess the effectiveness of carbon pricing in reducing emissions using a rigorous, machine-learning assisted systematic review and meta-analysis. Based on 483 effect sizes extracted from 80 causal ex-post evaluations across 21 carbon pricing schemes, we find that introducing a carbon price has yielded immediate and substantial emission reductions for at least 17 of these policies, despite the low level of prices in most instances. Statistically significant emissions reductions range between –5% to –21% across the schemes (–4% to –15% after correcting for publication bias). Our study highlights critical evidence gaps with regard to dozens of unevaluated carbon pricing schemes and the price elasticity of emissions reductions. More rigorous synthesis of carbon pricing and other climate policies is required across a range of outcomes to advance our understanding of “what works” and accelerate learning on climate solutions in science and policy.
We analyze how conventional emissions trading schemes (ETS) can be modified by introducing “clean-up certificates” to allow for a phase of net-negative emissions. Clean-up certificates bundle the permission to emit CO2 with the obligation for its removal. We show that demand for such certificates is determined by cost-saving technological progress, the discount rate and the length of the compliance period. Introducing extra clean-up certificates into an existing ETS reduces near-term carbon prices and mitigation efforts. In contrast, substituting ETS allowances with clean-up certificates reduces cumulative emissions without depressing carbon prices or mitigation in the near term. We calibrate our model to the EU ETS and identify reforms where simultaneously (i) ambition levels rise, (ii) climate damages fall, (iii) revenues from carbon prices rise and (iv) carbon prices and aggregate mitigation cost fall. For reducing climate damages, roughly half of the issued clean-up certificates should replace conventional ETS allowances. In the context of the EU ETS, a European Carbon Central Bank could manage the implementation of cleanup certificates and could serve as an enforcement mechanism.
We examine how the gender of business owners is related to the wages paid to female relative to male employees working in their firms. Using Finnish register data and employing firm fixed effects, we find that the gender pay gap is—starting from a gender pay gap of 11 to 12%—two to three percentage points lower for hourly wages in female-owned firms than in male-owned firms. Results are robust to how the wage is measured, as well as to various further robustness checks. More importantly, we find substantial differences between industries. While, for instance, in the manufacturing sector, the gender of the owner plays no role in the gender pay gap, in several service sector industries, like ICT or business services, no or a negligible gender pay gap can be found, but only when firms are led by female business owners. Businesses with male ownership maintain a gender pay gap of around 10% also in the latter industries. With increasing firm size, the influence of the gender of the owner, however, fades. In large firms, it seems that others—firm managers—determine wages and no differences in the pay gap are observed between male- and female-owned firms.
The dark side of metaverse: a multi-perspective of deviant behaviors from PLS-SEM and fsQCA findings
(2024)
The metaverse has created a huge buzz of interest because such a phenomenon is emerging. The behavioral aspect of the metaverse includes user engagement and deviant behaviors in the metaverse. Such technology has brought various dangers to individuals and society. There are growing cases reported of sexual abuse, racism, harassment, hate speech, and bullying because of online disinhibition make us feel more relaxed. This study responded to the literature call by investigating the effect of technical and social features through mediating roles of security and privacy on deviant behaviors in the metaverse. The data collected from virtual network users reached 1121 respondents. Partial Least Squares based structural equation modeling (PLS-SEM) and fuzzy set Qualitative Comparative Analysis (fsQCA) were used. PLS-SEM results revealed that social features such as user-to-user interaction, homophily, social ties, and social identity, and technical design such as immersive experience and invisibility significantly affect users’ deviant behavior in the metaverse. The fsQCA results provided insights into the multiple causal solutions and configurations. This study is exceptional because it provided decisive results by understanding the deviant behavior of users based on the symmetrical and asymmetrical approach to virtual networks.
We use worldwide gridded satellite data to analyse how population size and density affect urban PM 2.5 pollution. We find that more populated and denser grid cells are more exposed to pollution. However, across urban areas, exposure increases with cities’ population size but decreases with density. Moreover, the population effect is driven mostly by population commuting to core cities rather than the core city population itself. We analyse heterogeneity by geography and income levels. A counterfactual simulation shows that exposure could fall by up to 40% if population size were equalized across all cities within countries, but the relocation of population from large to small cities that maximizes welfare would be small.
Existing curricula for entrepreneurship education do not necessarily represent the best way of teaching. How could entrepreneurship curricula be improved? To answer this question, we aim to identify and rank desirable teaching objectives, teaching contents, teaching methods, and assessment methods for higher entrepreneurship education. To this end, we employ an international real-time Delphi study with an expert panel consisting of entrepreneurship education instructors and researchers. The study reveals 17 favorable objectives, 17 items of content, 25 teaching methods, and 15 assessment methods, which are ranked according to their desirability and the group consensus. We contribute to entrepreneurship curriculum research by adding a normative perspective.
High-growth firms (HGFs) are important for job creation and productivity growth. We investigate the relationship between product and labour market regulations, as well as the quality of regional governments that implement these regulations, and the development of HGFs across European regions. Using data from Eurostat, the Organisation for Economic Co-operation and Development (OECD), World Economic Forum (WEF), and Gothenburg University, we show that both regulatory stringency and the quality of the regional government relate to the regional shares of HGFs. In particular, we find that the effect of labour and product market regulations is moderated by the quality of regional government. Depending on the quality of regional governments, regulations may have a ‘good, bad or ugly’ influence on the development of HGFs. Our findings contribute to the debate on the effects of regulations and offer important building blocks to develop tailored policy measures that may influence the development of HGFs in a region.
This study pushes our understanding of research reliability by reproducing and replicating claims from 110 papers in leading economic and political science journals. The analysis involves computational reproducibility checks and robustness assessments. It reveals several patterns. First, we uncover a high rate of fully computationally reproducible results (over 85%). Second, excluding minor issues like missing packages or broken pathways, we uncover coding errors for about 25% of studies, with some studies containing multiple errors. Third, we test the robustness of the results to 5,511 re-analyses. We find a robustness reproducibility of about 70%. Robustness reproducibility rates are relatively higher for re-analyses that introduce new data and lower for re-analyses that change the sample or the definition of the dependent variable. Fourth, 52% of re-analysis effect size estimates are smaller than the original published estimates and the average statistical significance of a re-analysis is 77% of the original. Lastly, we rely on six teams of researchers working independently to answer eight additional research questions on the determinants of robustness reproducibility. Most teams find a negative relationship between replicators' experience and reproducibility, while finding no relationship between reproducibility and the provision of intermediate or even raw data combined with the necessary cleaning codes.
We study the effect of energy and transport policies on pollution in two developing country cities. We use a quantitative equilibrium model with choice of housing, energy use, residential location, transport mode, and energy technology. Pollution comes from commuting and residential energy use. The model parameters are calibrated to replicate key variables for two developing country cities, Maputo, Mozambique, and Yogyakarta, Indonesia. In the counterfactual simulations, we study how various transport and energy policies affect equilibrium pollution. Policies may induce rebound effects from increasing residential energy use or switching to high emission modes or locations. In general, these rebound effects tend to be largest for subsidies to public transport or modern residential energy technology.
Using novel longitudinal data, this paper studies the short- and medium-term effects of Russia's invasion of Ukraine on February 24, 2022 on social trust of adolescents in Germany. Comparing adolescents who responded to our survey shortly before the start of the war with those who responded shortly after the conflict began and applying difference-in-differences (DiD) models over time, we find a significant decline in the outcome after the war started. These findings provide new evidence on how armed conflicts influence social trust and well-being among young people in a country not directly involved in the war.