Category: Event

Bea Ahumada (University of Pittsburgh) will present “Excuses and Redistribution” on March 5th, 2025, at 11:00 AM, in room QA323.

Abstract:

This study explores how, when income inequality is perceived to arise from both effort and luck, excuses (self-serving belief distortions) can influence acceptance of inequality. In a controlled laboratory setting involving a real-effort task, participants make redistribution decisions between themselves and a partner. The study varied the degree of uncertainty about the role of effort and luck in determining initial earnings endowments.

Belief elicitations indicate that increased uncertainty caused participants to be more likely to attribute their partner’s success to luck. Furthermore, the use of excuses (attributing others’ outcomes to luck) was found to reduce willingness to redistribute earnings to their partners. These findings highlight how excuses about the role of luck versus effort may contribute to the persistence of inequality even if many individuals have meritocratic principles, and how variation in the degree of uncertainty about the causes of inequality, across individuals or societies, may contribute to different degrees of biased beliefs and inequality.

The paper also provides evidence of excuses in another sense: According to a structural model of fairness views, individuals tend to adopt a fairness view—egalitarian, meritocratic, or libertarian—to justify an allocation that benefits themselves.

Marina Rizzi (University of Turin) will present “Self-Regulation of Social Media and the Evolution of Content: a Cross-Platform Analysis” on February 28th, 2025, at 11:00 AM, in room QA405.

Abstract:   

This paper investigates the effectiveness of Twitter’s policy against racist hate speech, introduced in December 2020, in reducing abusive content. Using a dataset of 8 million tweets from users discussing race-related topics, and machine learning techniques to identify instances of hate speech and racist hate speech, I find a significant reduction in abusive content in Twitter, especially from racist users, after the policy’s implementation. Additionally, using a dataset of users with accounts on both Twitter and Parler, a less regulated social media platform, I examine whether abusive behavior shifted to Parler following the policy change. Findings suggest an overall increase in hate speech on Parler post-policy, in particular for users that were active in Twitter in those months. Text analysis methods indicate a possible shift in topics between the two platforms. These results highlight the complexity of online content regulation and the potential for spillover effects to alternative platforms.

Johannes Gessner (University of Mannheim) will present “Shifting Gears: Environmental Regulation in the Car Industry and Technological Change Among Suppliers” on February 24th, 2025, at 11:00 AM, in room QA405.

Abstract:   

Decarbonizing industries to mitigate climate change requires technological change. Innovation by suppliers can play a crucial role in this transition, particularly when suppliers have expertise in zero-emission technologies.

In this paper, I study the effect of environmental regulation in a downstream industry on the innovation outcomes of suppliers in the context of the European CO2 emission standard for passenger cars. I construct a novel data set that links administrative data on car manufacturer compliance to supplier patent data using information on automotive supply chains. To identify the causal effect of changes in the stringency of the emission standard, I leverage the heterogeneous exposure of automotive suppliers to changes in the composition of the European car market in the aftermath of the 2015 Volkswagen diesel scandal. Exposure to more stringent environmental regulation increases innovation for zero-emission vehicle technologies among existing suppliers. In addition, the likelihood that car manufacturers form new supply chain links to firms with expertise in technologies to reduce vehicle emissions increases in response to more stringent environmental regulation. These results suggest that environmental regulation induces economically significant technology spillovers for regulated firms.

Markus Althanns (ETH Zurich) will present “Strategic Debt in a Monetary Economy” on February 21th, 2025, at 11:00 AM, in room QA406.

Abstract:   

We analyze in a general-equilibrium framework how producers improve their bargaining position vis-à-vis consumers through debt. By indebting themselves, producers compel consumers in bilateral matches to partially bear their debt burden. Consumers who attach little value to producers’ goods are not willing to do so, so that some bilateral matches fail to result in trade. Producers account for this extensive-margin channel, but only to the extent that it affects themselves; they ignore the negative effect on consumers. A Pigouvian tax on debt resolves this externality and, in its absence, monetary policy mitigates the externality by deviating from the Friedman rule. We calibrate the model to U.S. data and quantify optimal nominal interest rates at levels up to 0.5 percent. Although there is ample empirical evidence for the use of debt to leverage bargaining power, we show that there are better contracts to achieve this.

Hector Hermida Rivera (QSMS) will present “Self-Equivalent Voting Rules” on February 7th, 2025, at 10:30 AM, in room QA406.

Abstract:   

In this paper, I introduce a novel stability axiom for stochastic voting rules—called self-equivalence—by which a society considering whether to replace its voting rule using itself will choose not do so. I then show that under the unrestricted strict preference domain, a voting rule satisfying the democratic principles of anonymity, optimality, monotonicity and neutrality is self-equivalent if and only if it is proportional (i.e., uniform random dictatorship). Thus, any society that desires stability and adheres to the aforementioned democratic principles is bound to either employ proportional voting rule or decide whether to change its voting rule using a voting rule other than itself.

Myrto Kasioumi (QSMS) will present “The Environmental Kuznets Curve Projections under the Shared Socioeconomic Pathways: A study of future trajectories” on December 6th, 2024, at 10:30 AM, in room QA406.

Abstract:   

The relationship between economic growth and environmental quality, specifically air pollution, has been extensively studied. However, the future dynamics of this relationship are yet to be explored. Economies can evolve in various ways in the future, due to factors such as technological advancement, population growth, education level, and production priorities. With these factors in mind, societies may focus on environmental sustainability, or on the contrary, continue relying on fossil fuels. In addition, future climate change can differ significantly based on human activities, resulting in different global warming scenarios. These future trajectories are described by the Shared Socioeconomic Pathways (SSPs) and Representative Concentration Pathways (RCPs), which outline scenarios for socioeconomic and climate conditions in the future, respectively. This study examines the Environmental Kuznets Curve (EKC) hypothesis within the framework of SSP and RCP scenarios using data from 193 countries over a 120-year period (1980–2100). The research conducted aims to help policymakers identify how different future socioeconomic scenarios and human activities can influence the relationship between growth and environmental sustainability, guiding strategies to achieve both goals simultaneously.

Luca Sandrini will present “Endogenous Peer Based Discrimination” (with Roberto Rozzi) on November 29th, 2024, at 11:00 AM, in room QA323.

Abstract:   

The paper presented in this ZEW Research Seminar considers a dynamic labor market where employers can either be conformist or rational. There are two types of workers. Employers only observe each worker’s type and each type’s expected productivity. The authors examine how employers’ behavioral rules evolve across steps based on static equilibrium outcomes. Behavioral rules evolve according to a fitness depending on the number of conformists and conformists pay a cognitive cost for considering additional information. They find that the two evolutionary stable states are such that either all employers are rational or all of them are conformist: only the second kind of state produces inequalities. External social pressure, the number of jobs, and the magnitude of the conformity cognitive cost influence the likelihood of a society with only conformist employers. Initially, the authors assume equal remuneration among employers and later demonstrate that their results hold even when worker remuneration differs across employers.

Christopher Stapenhurst (QSMS) will present “Red and Gold (with Andrew Clausen and John Moore)” on November 15th, 2024, at 10:30 AM, in room QA406.

Abstract:   

Clausen and Stapenhurst (2024) obtain a lower bound on the cost of the optimal static, bribe-proof mechanism. But what about dynamic mechanisms? We propose a mechanism called “Red and Gold” that uses a nuisance action to deter bribes at arbitrarily small cost. The agent receives either a red or a gold ticket. If the monitor reports shirking then she is asked to guess the colour of the agent’s ticket. If the monitor’s guess is correct, then she receives an arbitrarily small reward, and the agent receives a large fine. Otherwise, the agent gets no fine. It follows that any equilibrium belief of the monitor leaves exactly one of the agent’s types better off rejecting bribes. But then the monitor can perfectly infer the agent’s type, so the type that rejects bribes would be better off accepting them. Hence there can be no bribes in equilibrium.

Noé Ciet (QSMS) will present “Bailout Policies when Banks Compete with Switching Costs (with Marianne Verdier)” on November 22nd, 2024, at 10:30 AM, in room QA406.

Abstract:   

We analyze the effects of bailout policies on borrower surplus in a two-period Hotelling model of competition with switching costs and poaching. Before the second period of competition, banks may sometimes fail or face capacity constraints because of random shocks and uncertain bailouts. If borrowers are myopic, banks reduce the first-period interest rates according to their bailout expectations. We show that banks may reduce the first-period interest rates even more when borrowers anticipate a bank failure in the second period, whereas they may sometimes add a mark-up to the first-period interest rates if borrowers expect the market to remain stable. Higher bailout expectations have a different impact on the interest rates in markets with high and low switching costs. We derive the bailout policy that maximizes borrower surplus and show that it may sometimes be time-inconsistent.

Daniel Rehsmann (University of Vienna) will present “Choose Your Auction: Mechanism Design for a Bidder” (with Dmitriy Knyazev)” on November 11th, 2024, at 10:30 AM, in room QA406.

Abstract:   

This study discusses the maximization of a bidder’s utility in auctions by leveraging the information about a bidder’s value to formulate the auction’s rules. To make the analysis interesting, the research focuses on auction formats perceived as fair and unbiased, in line with common EU or WTO procurement regulations. In our main setup, we do not allow the auction to pay the bidders and characterize a preferable auction format as a second-price auction with pooling regions. The analysis then extends to include transfers towards bidders and demonstrates how a substantial interim utility can be guaranteed to a bidder without running a deficit in equilibrium. The theory is applied to a model of favoritism, discussing whether forms of preferential treatment in auctions are preventable or detectable.