External refereed essays

Do We Follow Others When We Should? A Simple Test of Rational Expectations

The paper presents a meta dataset covering 13 experiments on social learning games. It is found that in situations where it is empirically optimal to follow others and contradict one's own information, the players err in the majority of cases, forgoing substantial parts of earnings. The average player contradicts her own signal only if the empirical odds ratio of the own signal being wrong, conditional ...

The Impact of Governance Structure on Firm Performance: An Application to the German Water Distribution Sector

This paper investigates the impact of governance structure on firm performance (i.e., retail prices) using a database of 765 German water suppliers. Controlling for scale economies as well as technical and structural characteristics, we find that private sector participation is accompanied with higher retail prices. Furthermore, Eastern states on average feature higher prices mirroring significant ...

An Overview of Biofuel Policies across the World

In the last decade biofuel production has been driven by governmental policies. This article reviews the national strategy plans of the world's leading producers. Particular attention is dedicated to blending targets, support schemes and feedstock use. Individual country profiles are grouped by continent and include North America (Canada and the US), South America (Argentina, Brazil, and Colombia), ...

Does the Nominal Exchange Rate Regime Affect the Real Interest Parity Condition?

The real interest parity (RIP) condition combines two cornerstones in international finance, uncovered interest parity (UIP) and ex ante purchasing power parity (PPP). The extent of deviation from RIP is therefore an indicator of the lack of product and financial market integration. This paper investigates whether the nominal exchange rate regime has an impact on RIP. The analysis is based on 15 annual ...

Aid Delivery through Non-governmental Organisations: Does the Aid Channel Matter for the Targeting of Swedish Aid?

This paper analyses whether aid channelled through non-governmental organisations (NGOs) is less affected by selfish donor motivations and better targeted to needy recipient countries than aid distributed by state agencies. We employ Tobit (and Probit) models and make use of an exceptionally detailed database that allows an assessment of the allocation of Swedish aid channelled through NGOs in comparison ...

Access Pricing and Network Expansion in Natural Gas Markets

Wir diskutieren alternative Ansätze zur Bekämpfung lokaler Marktmacht in Erdgasmärkten mit einem besonderen Fokus auf den Ausbau bestehender Pipelinekapazitäten. Cremer und Laffont (Eur. Econ. Rev. 46:928-935, 2002) haben gezeigt, dass Preisdiskriminierungbeim Netzzugang korrigierend bei Marktversagen wirken und auch zur Erhöhung der Produktionsmenge (also Transportvolumina) führen kann. Im Gegensatz ...

The Effect of Direct Democracy on Income Redistribution: Evidence for Switzerland

In political economics, the impact of institutions on income redistribution is mainly studied by comparing different forms of representative democracy. In this article, we analyze the influence of direct democratic institutions on redistribution first focusing on welfare and nonwelfare spending using yearly panel data for Swiss cantons. Then, we estimate a model, which explains the determinants of ...

On the Sensitivity of Firms' Investment to Cash Flow and Uncertainty

We investigate the analytical and empirical linkages between cash flow, uncertainty, and firms' capital investment behavior. Our empirical approach constructs measures of own- and market-specific uncertainty from firms' daily stock returns and S&P 500 index returns along with a CAPM-based risk measure. Our results indicate that even in the presence of important firm-specific variables, uncertainty ...

Determinanten kindlicher Geduld: Ergebnisse einer Experimentalstudie im Haushaltskontext

Patience as a basis for life success is not just a question of biology and heredity: Rather, the early interaction between parent and child and socialization in early childhood appear to be the "cradle of action" in the area of time preferences as well. In this study, we use an experimental dataset collected in the framework of the longitudinal German Socio-Economic Panel (SOEP) study to investigate ...

The Research Data Center (RDC) of the German Socio-Economic Panel (SOEP)

Eastern Germany on the Brink of Closing the Productivity Gap? Firm Level Evidence from Manufacturing

After 20 years of transition, productivity in Eastern Germany is still considerably below the Western level. We study the development of the East-West productivity gap at the firm level and link it to firms' product policy. Redesigning their product range was a major challenge for Eastern enterprises as they sought their place in the international division of labour. Based on data from manufacturing ...

The Problem of Money Illusion in Economics

Money illusion in economic theory has been an assumption rejected by academic economists for quite some time. However, with the gradual diffusion of behavioural economics based on experimental research this has changed. Now, it has become a respected fact to accept money illusion as a stylized fact of human behaviour. However, it still needs a better understanding why monetary phenomena especially ...

"Marginal Employment" and the Demand for Heterogeneous Labour-Elasticity Estimates from a Multi-Factor Labour Demand Model for Germany

We develop a structural multi-factor labour demand model which distinguishes between eight labour categories including marginal employment, i.e. low-paying jobs with only a few working hours and partially exempted from employee's social security contributions. Using a new panel data set for Germany, the model is estimated both for the number of workers and total working hours. For unskilled and skilled ...

Can Minimum Prices Assure the Quality of Professional Services?

This paper studies the effects of a minimum price fixed by a bureaucratic non-monopolistic professional association on service quality and consumer surplus. It shows that the price set by a Niskanen-type professional association will maximize consumer surplus only if consumers demand the highest possible average quality. If consumers demand services of lesser quality, the association's price will be ...

Collecting Genetic Samples in Population Wide (Panel) Surveys: Feasibility, Nonresponse and Selectivity

Collecting biomarkers as part of general purpose surveys offers scientists - and social scientists in particular - the ability to study biosocial phenomena, e.g. the relation between genes and human behavior. We explore the feasibility of collecting buccal cells for genetic analyses with normal interviewers as part of a pretest for the German Socio-economic Panel Study (SOEP) using a probability sample. ...

A Dynamic Incentive Mechanism for Transmission Expansion in Electricity Networks: Theory, Modeling, and Application

We propose a price-cap mechanism for electricity-transmission expansion based on redefining transmission output in terms of financial transmission rights. Our mechanism applies the incentive-regulation logic of rebalancing a two-part tariff. First, we test this mechanism in a three-node network. We show that the mechanism intertemporally promotes an investment pattern that relieves congestion, increases ...

Who Is Who? Die Sozialstruktur der Soziologie-Professorenschaft in Deutschland

Der vorliegende Beitrag beschäftigt sich vor dem Hintergrund spezifischer Rekrutierungsmuster im Berufsfeld Wissenschaft mit der sozialstrukturellen Zusammensetzung der Professorenschaft im Fach Soziologie. Grundlage ist eine Gesamterhebung der Professorinnen und Professoren an universitären soziologischen Fachinstituten und ausgewählten außeruniversitären wissenschaftlichen Einrichtungen. Untersuchte ...

Long-Running German Panel Survey Shows that Personal and Economic Choices, Not Just Genes, Matter for Happiness

Psychologists and economists take contradictory approaches to research on what psychologists call happiness or subjective well-being, and economists call subjective utility. A directtest of the most widely accepted psychological theory, set-point theory, shows it to be flawed. Results are then given, using the economists' newer "choice approach" - an approach also favored by positive psychologists ...

Naming Differences in Divided Germany

This article analyzes differences in naming between East and West Germany. After World War II, Germany was split by the allied forces. Two Germanies emerged: the Federal Republic of Germany (FRG) and the German Democratic Republic (GDR). The country's division lasted about forty years (1949-1989), a time span in which vastlydifferent geo-political frameworks - Eastern bloc versus Western bloc - shaped ...

A Natural Experiment on Sick Pay Cuts, Sickness Absence, and Labor Costs

This study estimates the reform effects of a reduction in statutory sick pay levels on sickness absence behavior and labor costs. German federal law reduced the legal obligation of German employers to provide 100% continued wage pay for up to six weeks per sickness episode. In 1996 statutory sick pay was decreased to 80% of foregone gross wages. Within the reform's target group - private sector employees ...