Projects

Parental Leave and Career Trajectories of Men and Women in Austria

Funding agency: Vienna Science and Technology Fund (WWTF)

Project number: 10.47379/ESS22054

Project amount: EUR 434.810,-

Project duration: 01.01.2024 – 31.12.2026

Project team: Principal Investigator: Alice Kügler (CEU GmbH - Central European University Private University)Co-Principal Investigator(s): Lennart Ziegler (University of Vienna), Omar Bamieh (University of Vienna)

Short desciption:

Our project consists of three parts that investigate recent parental leave choices in Austria. We combine a number of relevant administrative datasets at the new Austrian Micro Data Center (AMDC) in a novel way to assess the leave-taking patterns of women and men and their consequences for future labor market outcomes such as employment and wages. Moreover, we examine to what extent financial incentives, career concerns, and social norms can explain parental leave choices.

First, we descriptively analyze recent patterns in parental leave take-up of mothers and fathers in Austria, providing a detailed characterization of parents who are most likely to take shorter and extended leave spells. Moreover, we can quantify the consequences of leave-taking for future labor market outcomes for individuals themselves and their partners.

To learn about the importance of additional leave incentives for fathers, we examine the effects of a recent change in paternity leave policy. In March 2017, Austria introduced a one-month parental leave scheme tailored to fathers right after childbirth, colloquially referred to as ‘daddy month’. We evaluate the overall take-up of this new scheme and analyze its impact on employment and earnings of parents.

In the second part of the project, we assess how financial and career considerations affect parental leave choices of fathers. Financial incentives differ markedly between low- and high-earning parents, and we use income data provided by the AMDC to estimate how these incentives affect take-up rates. Linking fathers to workplaces further enables us to analyze if competition effects among coworkers deter fathers from taking leave.

The third part of our project investigates the role of social norms. The AMDC includes detailed data on several person characteristics that we employ to proxy attitudes towards family and gender issues. This allows us to examine to what extent the effectiveness of parental leave policies depends on the social norms and attitudes of families.
Environmental policy under political pressure

Funding agency: OeNB Jubiläumsfonds

Project number: AB 18890

Project amount: EUR 87.000,-

Project duration: 01.10.2023 – 31.03.2025

Project team: Gerhard Sorger (Lead), Andrei Kalk

Short desciption:

Climate change poses major challenges for governments around the world. A particularly important aspect of the transition from a traditional economy to a carbon neutral one is that it necessarily creates economic winners and losers. Individual companies or entire industries that are dependent on the use of fossil fuels lose part of their business basis, while other industries benefit immensely from the transition. This situation creates a favorable breeding ground for lobbying and other forms of political influence. The proposed project aims at contributing to the understanding of this problem by modeling climate policy as a dynamic hierarchical game between political interest groups on the one side and the government on the other.
Projekt 1 + 2 (Bank of Canada)

Funding agency: FWF

Project duration: 01.07.2023 - 30.09/2023

Project team: Philipp Schmidt-Dengler (Lead)
The Informational Content of Consumer Choice

Funding agency: FWF

Project number: I 6136-G

Project amount: EUR 132.909,00

Project duration: 01.04.2023 - 31.03.2027

Project team: Christine Zulehner (Lead)
Empirics of retail pricing

Funding agency: FWF

Project number: TP6

Project duration: 01.03.2021 - 28.02.2026

Project team: Christine Zulehner (Lead)
Collusive Pricing

Funding agency: FWF

Project number: TP5

Project duration: 01.03.2021 - 28.02.2026

Project team: Philipp Schmidt-Dengler (Lead)
Limited information and commitment

Funding agency: FWF

Project number: TP4

Project duration: 01.03.2021 - 28.02.2026

Project team: Eeva Mauring (Lead)
Pricing under inform. Asymmetries

Funding agency: FWF

Project number: TP3

Project duration: 01.03.2021 - 28.02.2026

Project team: Maarten Janssen (Lead)
Dynamic Pricing

Funding agency: FWF

Project number: TP2

Project duration: 01.03.2021 - 28.02.2026

Project team Daniel Garcia (Lead)
Pricing in imperfectly competitive markets

Funding agency: FWF

Project number: FG 6-G (TP1)

Amount: Euro 1'339'041,91

Project duration: 03/2021 - 02/2026

Project team: Garcia, Daniel (Co-Lead), Janssen, Maarten (Co-Lead); Mauring, Eeva (Co-Lead); Schmidt-Dengler, Philipp (Co-Lead); Zulehner, Christine (Speaker, Co-Lead)

Short description

Economists have formally studied pricing in imperfectly competitive markets since the mid nineteenth century. By analyzing the potential inefficiencies of such markets this research has guided regulatory and competition policy. With more and more transactions being shifted to online markets, research in this area remains highly relevant. The behavior of firms in imperfectly competitive markets is also studied in the management literature, with a stronger focus on strategies available to firms to become more profitable. Applications include bookings for hotel rooms, pricing of online airline tickets, as well as pricing in vertical contracts between firms.

This project brings together the economics and management literatures and studies pricing in imperfectly competitive markets both from an empirical and a theoretical perspective. Our analytical framework uses game-theoretic models to capture strategic behavior in imperfectly competitive markets. To carry out the empirical analysis, we resort to econometric methods. In doing so, we bring new tools to the study of classical questions. We also aim to tackle new issues related to online markets and algorithmic pricing. By interacting with competition authorities, the project also aims to deliver insights that are relevant for competition policy.

The project covers five themes: dynamic pricing, pricing under information asymmetries, consumer search, collusion, and retail pricing.

Dynamic pricing is particularly important in online markets (e.g., related to hospitality management, but also in electricity), where firms can easily and frequently change their prices. The project on information asymmetries is motivated by the fact that especially in global markets firms often lack relevant business information about their competitors or their suppliers. Search frictions constitute the predominant framework to reconcile persistent price dispersion in many markets in the presence of continuous advances in ICT, that have made information about prices widely available and easily accessible for market participants. The focus on collusive pricing is motivated the difficulty competition authorities face in detecting this illegal practice from competitive behavior, especially when firms' costs are unknown. The project on retail pricing develops and estimates empirical models for gasoline and telecommunication markets that allow to quantify the effects of different policies, like taxation or regulation. There is substantial overlap among the five themes and we strive to exploit these synergies.
Consumer Inertia and Switch Behaviour

Funding agency: FWF

Project number: I 6135-G

Project amount: EUR 195.909,00

Project duration: 11/2022 - 11/2026

Project team: Christine Zulehner (Lead)
The Gravity of Mobility and International Trade

Funding agency: Austrian National Bank (OeNB)

Project duration: 01.10.2021 - 30.09.2025

Project team: Alejandro Cunat (Lead), Ashim Dubey
Central Bank Digital Currency: Design, Adoption and Macroeconomic Implications

Funding agency: Austrian National Bank (OeNB)

Project number: 18693

Amount: Euro 249.000,00

Project duration: 1.3.2022 - 28.2.2025

Project team: Paul Pichler (Lead), Philipp Ulbing

Short description:

The proposed project seeks to facilitate improve the scientific assessment of the desirability of a Central Bank Digital Currency (CBDC) by developing a formal framework to better quantify its potential benefits and costs. It will focus on the systematic comparison of different potential designs of CBDC and the intensive versus extensive margin of adoption, i.e., who is likely to adopt CBDC and for what transactions will CBDC likely be used. The first part of the project will develop a payment instrument choice model of CBDC, the second part will incorporate CBDC into a macroeconomic model and study the effects of its introduction on financial and macroeconomic aggregates such as credit creation and output.
Financial Mistakes and Credit Market Regulation

Funding agency: Austrian National Bank (OeNB)

Project number: 18741

Amount: Euro 150.000,00

Project duration: 1.1.2022 - 31.12.2023

Project team: Florian Exler (Lead), Gyöngyi Lóránth

Short description:

Since financial contracts can be complicated, consumers might not fully understand them and make financial mistakes. How do these mistakes affect welfare and efficiency? Could a regulator improve outcomes? To answer these questions, Florian Exler in collaboration with Gyöngyi Lóránth (link: https://homepage.univie.ac.at/gyoengyi.loranth/) and Alexander Hansak (link: https://homepage.univie.ac.at/alexander.hansak/) will develop a novel structural framework of financial mistakes in consumer credit markets. After estimating their framework, they will use it to evaluate recent and potential new credit market reforms.
On the Theory and Testing of Changing Choice Baviour

Funding agency: Austrian National Bank (OeNB)

Project number: 18719

Amount: Euro 99.000,-

Project duration: 01.10.2021 - 30.09.2023

Project team: Karl Schlag (Lead), Philipp Peitler

Short description:

Experimental economists assume that choice behaviour is constant over the course of the experiment, when interpreting their results. This assumption is problematic, since ignoring the possibility of changing choice behaviour might lead to false rejections of descriptively accurate theories and might misguide efforts to develop alternative theories. On the other hand, to allow too much freedom in how choice behaviour can change over time will easily reconcile many different observed behaviours and hence isn't useful either. Even though there is neither theoretical justification nor empirical evidence for the constancy of choice, there is surprisingly little research on how to model choice behaviour without this assumption. We close a gap in the literature, by dropping this assumption and developing a model of changing choice behaviour that is falsifiable.

This project consists of two sub-projects. In the first part we will develop a general theoretical model of choice behaviour, where choice behaviour can change over time. The novelty of our approach is that we explicitly model the experimental environment, e.g. the incentive scheme, and the limitations on observability of the choice correspondence. Once we have developed the general model, we will look into specific popular theories of choice behaviour, like expected utility and MinMax regret, and how they can be extended by allowing choice behaviour to change. Furthermore, we will do a thorough reanalysis of prominent experimental studies and see whether we will be able to detect changing choice behaviour. The second part is an experiment to test whether subjects actually exhibit changing choice behaviour in an controlled environment. The design allows us to distinguish changing choice behaviour from random choice behaviour and violations of the Independence axiom.
Paternity Leave: Monetary Incentives or Flexibility?

Funding agency: Austrian National Bank (OeNB)

Project number: 18648

Amount: Euro 159.000,-

Project duration: 10/2021 - 09/2023

Project team: Lennart Ziegler (Lead), Omar Bamieh (Co-Lead)

Short description:

Although many countries reserve a large share of paid parental leave provision for fathers, there is still a significant lack of fathers' involvement in childcare. This project aims to provide new evidence on the determinants and consequences of paternity leave. Specifically, we analyze whether financial incentives and flexibility considerations can contribute to higher take-up rates of parental leave. Our empirical analysis exploits exogenous variation caused by reforms of parental leave benefit schemes in Austria. This allows us to estimate effects of more flexible leave schemes as well as higher income replacement rates on take up and duration of paternity leave. Moreover, we analyze how induced changes in parental leave affect future labor market outcomes of fathers and mothers.
Understanding Social Mobility – An experimental approach

Funding agency: Austrian National Bank

Project number: 18633

Amount: Euro 247'000

Project duration: Oct 2021 - Nov 2025

Project team: Tyran, Jean-Robert (Project Lead); Sonntag, Axel (Co-Lead)

Short description:

Social mobility evokes the meritocratic ("American") dream of earning a better life through hard work, while lack of social mobility means that those at the bottom of the social ladder are doomed to remain there, no matter how hard they try. This project (i) experimentally investigates the relevance of the following structural determinants of social mobility: the degree to which success is driven by luck rather than effort, discrimination, wage compression, and the degree of social stratification. We then (ii) explore how different policy interventions such as income or inheritance taxes affect social mobility under varying structural conditions. We (iii) also investigate peoples' acceptance of alternative policy measures by the means of voting. We develop an economic model with competition for status and accumulation effects which result from status-dependent access to production technologies. This model serves to generate benchmark predictions that we put to a test in the economic laboratory.
The distribution of tenant benefits in Austrian social housing

Funding agency: OeNB Jubiläumsfondsprojekt

Project number: 18299

Amount: Euro 58'000

Project duration: 1.8.2020-30.09.2023

Project team: Ana-Begona Ania-Martinez

Short description:
The project contributes to the evaluation of current social housing programs in Austria. Using SILC data, we provide monetary measures of the impact of social housing on the living standards of tenants and estimate the associated dead weight loss of provision. To estimate the benefits, different specifications of utility as an explicit function of the bundle of housing attributes consumed is considered, two different approaches to estimate the market values of the subsidized units is contrasted - the use of a subjective estimate provided by the tenants in the survey and a hedonic regression on the basis of housing attributes. We are interested in the distribution of the benefits across families with different characteristics.
Self-serving Views on Redistributive Fairness

Funding agency: Hertha Firnberg Programme of the Austrian Science Fund (FWF)

Amount: Euro 234'000

Project duration: Feb 2019 - Jan 2022

Project team: Deszö, Linda; Tyran, Jean-Robert

Short description:

Experimental research on distributive preferences reports that people prefer compensating low income through redistribution when it is due to factors one cannot control. However, there are situations where partners' incomes were previously unequal, while in a new, present income allocation they receive equal outcomes. Only one paper examines a similar situation, finding that the person with the unfortunate history self-servingly believes that he is entitled to compensation for his past, while the person with the fortunate history believes that the past is irrelevant to the present. We propose an agenda investigating how history shapes distributive preferences, and the association between distributive fairness violations and unethical behavior. We argue that examining the relationship between history and distributive preferences sheds light, for example, on whether a fair welfare system should consider individual contribution history.
First, we ask if asymmetric contribution history to joint earnings leads to self-serving invocations of history between partners when proposing divisions.
Second, we address whether partners sharing asymmetric initial income levels due to a previous allocation hold divergent views about the fair distribution of new, jointly created proceeds to which they contributed
equally. We study the extent to which preferences for maintaining income hierarchy and inequality aversion (beyond greed) drive distributive preferences.
Relatedly, we examine the association between imposing a distributive scheme on the rich and poor and subsequent unethical behavior. Imposed distributive schemes would systematically vary how much post-distribution rank is maintained/reversed and how income inequality is decreased/increased between them.