Research
My research lies in the field of Environmental Economics, using insight from Behavioral Economics and the tools offered by Game Theory and Experimental Economics. Below you can browse through my work published in peer-reviewed journals.
Social Choice and Welfare, 57(2), 229-256 (2021)
The experimental literature suggests that contributions to a public good made dynamically, over multiple stages are higher than contributions made in a static setting, even when players do not receive feedback about co-players' previous contributions between stages. Because the dynamic setting without feedback is strategically equivalent to the static one, this finding is puzzling. One important difference between the two settings, however, is that the dynamic setting gives the opportunity to sink contributions while in the static one this opportunity does not exist. I test whether the sunk character of the dynamic contributions explains the higher contributions in the dynamic setting. Symmetric players contribute in two stages to a threshold public good and receive feedback after each stage. The experimental conditions differ in whether the first-stage contributions are sunk or not when deciding on the second-stage contributions. The results show that the sunk condition increases the second-stage individual contributions, and this is more so the case at higher levels of the first-stage contributions. This suggests that the sunk contributions do, at least partially, explain the better performance of the dynamic setting.
with Astrid Dannenberg and Sonja Zitzelsberger
Experimental Economics, 23: 84–109 (2020)
Ostracism is practiced by virtually all societies around the world as a means of enforcing cooperation. In this paper, we use a public goods experiment to study whether groups choose to implement an institution that allows for the exclusion of members. We distinguish between a costless exclusion institution and a costly exclusion institution that, if chosen, reduces the endowment of all players. We also provide a comparison with an exclusion institution that is exogenously imposed upon groups. A significant share of the experimental groups choose the exclusion institution, even when it comes at a cost, and the support for the institution increases over time. Average contributions to the public good are significantly higher when the exclusion option is available, not only because low contributors are excluded but also because high contributors sustain a higher cooperation level under the exclusion institution. Subjects who vote in favor of the exclusion institution contribute more than those who vote against it, but only when the institution is implemented. These results are largely inconsistent with standard economic theory but can be better explained by assuming heterogeneous groups in which some players have selfish and others have social preferences.
with Anke Gerber and Andreas Lange
Economic Inquiry, 56(3): 1543-1561 (2018)
We study a principal‐agent relationship between a politician and a researcher that captures stylized facts regarding the involvement of politics into scientific research. The politician has some ideal policy that he would like to implement, but needs to contract with a researcher to choose a policy that is supported by scientific advice. We study the implemented contracts under symmetric and under asymmetric information about the researcher's ability and concern for reputation, and discuss with which types of researchers the politician will contract. We identify several conflicts between the interests of voters and those of the politician.
Journal of Economic Psychology, 58: 44-59 (2017)
This paper reports on a laboratory experiment aiming at documenting the sunk-cost fallacy in individual decision-making and at identifying the role of the cognitive ability in its manifestation. For this purpose, the design rules out loss aversion and cognitive dissonance, identified by the literature as being the main psychological drivers of the bias. The sunk-cost fallacy is identified by comparing a low and a high sunk-cost treatment, respectively, against a control group that does not incur a sunk cost. There is evidence of a weak manifestation of the sunk-cost fallacy, which is statistically significant only for the high sunk-cost treatment. However, strong evidence of the fallacy was found among the high-cognitive-ability subjects. Finally, although cognitive ability is predictive of status-quo bias, it was not found to reduce the sunk-cost bias.
Journal of Regulatory Economics, 49(3): 315-343 (2016)
Auctions have become popular as means of allocating emissions permits in the emissions trading schemes developed around the world. Mostly, only a subset of the regulated polluters participate in these auctions along with speculators, creating a market with relatively few participants and, thus, incentive for strategic bidding. I characterize the bidding behavior of the polluters and the speculators, examining the effect of the latter on the profits of the former and on the auction outcome. It turns out that in addition to bidding for compliance, polluters also bid for speculation in the aftermarket. While the presence of the speculators forces the polluters to bid closer to their true valuations, it also creates a trade-off between increasing the revenue accrued to the regulator and reducing the profits of the auction-participating polluters. Nevertheless, the profits of the latter increase in the speculators’ risk aversion.
Resource and Energy Economics, 37: 253-278 (2014)
This paper contributes to the literature on market power in emissions permits markets, modeling an emissions trading scheme in which polluters differ with respect to their marginal abatement costs at the business-as-usual emissions. The polluters play a two-stage static complete information game in which their market power arises endogenously from their characteristics. In the first stage all polluters bid in an auction for the distribution of the fixed supply of permits issued by the regulator, and in the second stage they trade these permits in a secondary market. For compliance, they can also engage in abatement activity at a quadratic cost. Under the assumptions of the model, in equilibrium all polluters are successful in the auction. In the secondary market the low-cost emitters are net sellers and the high-cost emitters are net buyers. Moreover, the high-cost emitters are worse off as a result of the strategic behavior. In addition, the secondary market price is unambiguously above the auction clearing price. I find that the aggregate compliance cost when polluters act strategically increases in the heterogeneity of their marginal abatement costs at the business-as-usual emissions, but there exists a threshold of the fixed supply of permits above which strategic behavior is compliance cost-saving for the polluters. Finally, for a low enough variance of the marginal abatement cost at the business-as-usual emissions, strategic behavior is compliance cost-saving for the polluters, regardless of the level of the available supply of permits.