Working papers and article manuscripts

This is a list of recent working papers and article manuscripts, including abstracts and status information. For some, links to PDFs hosted at SSRN are also provided. Do not hesitate to get in touch for requests of up-to-date versions and materials, or for comments and discussions. 

I'm in a hurry, I don't want to know! Strategic ignorance under time pressure

Decision-makers commonly avoid information on uncertain social effects of their privately beneficial choices. The dominant theory holds that such "strategic ignorance" is a means to circumvent inner moral conflict while acting self-servingly. In extension of the theory, we hypothesize that time pressure in decision-making elevates the prevalence of strategic ignorance, because it provides a convenient excuse for not getting informed. We conduct a laboratory experiment with resolvable payoff uncertainty to test the hypothesis. We find that time pressure indeed significantly increases the incidence of information avoidance and self-serving choices relative to a baseline without time pressure. In a control condition in which payoffs are fully transparent by design, time pressure has no measurable effect on behavior. We discuss the findings in the context of the recent literature on the cognitive underpinnings of pro-social behavior and argue that they have significant implications for information-based approaches to public policy.

Should transparency be (in-)transparent? On monitoring aversion and cooperation in teams

Monitoring the behavior of others in a social dilemma can have two opposing effects: On the one hand, it may have beneficial effects due to reduction of uncertainty. On the other hand, it may have detrimental effects due to hidden costs of control. We explore both mechanisms theoretically and report on an experiment designed to discriminate between them. We observe choices in a repeated sequential prisoner's dilemma in a two-by-two between subjects design. The second mover can observe the choices by first movers either by choosing to monitor (endogenous monitoring) or automatically (exogenous monitoring). The key manipulation is whether first movers can or cannot observe second mover's monitoring at the end of a round. We find that the frequency of cooperation differ across treatments, whereas monitoring occurs in approximately 80% of the time independently from its observability. Thus, the differences in cooperation are driven by the observability of monitoring and not by differences in monitoring. Specifically, mutual cooperation occurs significantly more frequently when monitoring is  transparent. This effect can be attributed to the uncertainty reducing effect of monitoring: since conditional cooperators are more likely to monitor than second movers with a dominant action, monitoring actions carry information that first movers can use to better (over and above the cooperate or defect choice) screen the type of their co-player and thereby reduce the risk of being exploited. The results provide strong evidence that the hidden benefits of monitoring dominate the hidden costs of control.

Status: Submission (Management Science)

Climate protest is a strategic game: Theory and evidence

By means of a statistical game theoretic model of climate protest, we derive the hypothesis that individual participation decisions are interdependent ("strategic") and demonstrate that protest dynamics depend critically on whether decisions are strategic complements or substitutes. We derive empirically testable implications and evalulate them in the context of the third "Global Climate Strike" (September 20, 2019) with an array of four pre-registered and randomized online field experiments on broad samples of adults from the largest four German cities. Consistent with the hypothesis, we find evidence of a causal effect of beliefs about turnout on the probability of protest participation. The negative sign of the effects is consistent with strategic substitutability. Feeding back into our theoretical analysis, the results indicate that climate protest in adults suffers from free riding, suggesting that the protest movement will not easily leap out of the youth population into the broader society. We conclude with implications for the broader literature on protest and social moverments and suggest further avenues for research.

Status: Submission (Quarterly Journal of Economics)

Integrated energy needs integrated analysis: Electrification, sector coupling, and carbon pricing in general equilibrium

In a general equilibrium model we clarify conditions for abatement-effective sector coupling. First, if the electricity sector is put under emissions trading any additional electricity consumption will be emission-free, such that relative emissions intensities do not matter for electro-technology support schemes. Second, abatement through fuel-electricity substitution is then mitigated by power price adjustments. Third, subsidizing renewables indirectly subsidizes electro-technology. Finally, renewables support yields a "double green dividend" by inducing emissions reductions through a shift of production factors to the clean electricity sector at the expense of polluting industries, and indirectly through making electric power cheaper relative to fossil fuels. There is thus strong complementary between renewables deployment and support of electro-technology. The results are important for the design and assessment sector coupling frameworks, contribute to the literatures of overlapping instruments in pollution control and renewable energy promotion with a climate policy objective, and extend them in a new direction by explicitly considering support of electro-technology.

Status: Revision (abstract and PDF are NOT up-to-date)

Ongoing research

Initiated, ongoing and (currently) suspendend research projects are listed on a password portected page here. For inquiries use the contact from below.