Funding agency: FWF

Project number: I 3487

Amount: Euro 342'349,89

Project duration: 2018 - 2021

Project team: Janssen, Maarten (Project Lead); Mauring, Eeva (Co-Lead); Garcia, Daniel (Co-Lead)

Short description:

Whether or not markets perform well in coordinating demand and supply depends to a large extent on the information agents possess. Often consumers need to acquire information about product characteristics and prices to be able to carefully compare the product offerings of different firms. Market power of firms depends on the information consumers have. If consumers are not informed about alternative prices, market power arises naturally as a consequence of the lack of information. On the other hand, firms may have incentives to reveal some of their private information. Information disclosure by firms may take the form of self-advertising, information provided by third party intermediaries or rating agencies. An important question in this regard is whether the information that firms directly or indirectly provide is verifiable or not. In the latter case, firms may lie about the information they provide and consumers must decide whether to trust the information or not. If information is non-verifiable, firms may not have an incentive to disclose information in the first place as the content may not be trusted by consumers.

Acquisition, disclosure and diffusion of information are clearly related. When few people acquire information, little information can be diffused, while if information is disclosed and disseminated efficiently, people may not have the incentive to incur a cost to acquire more information themselves.

This project brings together researchers at the economics department at the University of Vienna and researchers at the National Research University Higher School of Economics (Moscow). They will work on different subprojects where the relationship between information acquisition, disclosure and diffusion is explored.  The project envisages to organize one workshop in Moscow and an international conference in Vienna.

Funding agency: FWF

Project number: P30852

Amount: Euro 210'010,50

Project duration: 2018 - 2021

Project team: Pichler, Paul (Project Lead)

Short description:

International agreements to fight global warming in the past often had limited success or failed altogether, such as the Copenhagen Summit in 2009. Against this background, there have been recurrent proposals by academic researchers, policy advisors, and political commentators to create a supranational climate protection authority with the explicit mandate to fight global warming, and to delegate decision power over certain climate-relevant policies once and for all to this authority. Their argument is that an independent authority can implement necessary but painful climate-policy reforms much better than elected politicians, who are often driven by myopic re-election concerns. The aim of the proposed project is to better understand whether this argument in favor of a supranational environmental authority is indeed valid. We plan to carefully study if and when it may be economically beneficial for countries to delegate climate-relevant policies, and how such delegation would affect international climate policies. We plan to address these and other related questions within a theoretical economic model of climate policy, designed to capture the key trade-off between the economic benefits of energy consumption, investment into clean technologies for energy production, and environmental pollution costs. The proposed project is the first to develop a theoretical model of supranational climate-policy delegation and ask whether an independent supranational environmental authority could alleviate the pressing problem of global warming. It thereby contributes to an important discussion on the design of socio-economic institutions to guarantee sustainability of economic policies for the years to come.

Funding agency: FWF

Project number: P 30922

Amount: Euro 271'650,24

Project duration: 2017 - 2020

Project team: Schmidt-Dengler, Philipp (Project Leader); Garcia, Daniel (Co-Leader)

Short description:

In most retail markets, consumers have to spend time and other resources in order to gather information about prices and other product characteristics. The process through which this information is gathered, referred to as the search protocol, has important implications for demand estimation and market structure. In this project we aim to introduce a new test that allows us to identify the protocol consumers use in the presence of learning and implement it using real-world web browsing data and online field experiment specifically designed for this question.