Archive

Projects

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.
International Trade, Resource Abundance, Development and Production Structures

Period: 31.07.2011-30.08.2014
Project team: Alejandro Cunat
Amount: Euro 195.284,25

Description:

Dieses Forschungsprojekt analysiert die unterschiedlichen Kanäle durch die internationaler Handel und Ressourcenreichtum Entwicklungs- sowie Industrialisierungspfade von Ländern beeinflussen. Insbesondere planen wir die folgenden Themengebiete zu behandeln: Thema 1: Die relative Wichtigkeit von komparativen Vorteilen und der "proximity to the core of world demand" bei der Festlegung von Industrialisierungspfaden. Wir analysieren die Rolle von internationalem Handel und der geographischen Position bei der Bestimmung von Produktionsstrukturen unterschiedlicher Länder. Zu diesem Zweck entwickeln wir ein "many-country" Modell, welches Nicht-Homothetizität, Transportkosten, komparative Vorteile und Besonderheiten der "New Trade Theory" berücksichtigt. Dieses Modell erlaubt uns, die Effekte von Nachfrage, Spezialisierung und Distanz in ihrer Interaktion bei der Bestimmung der GleichgewichtsProduktionsstrukturen unterschiedlicher Ländern zu analysieren. Thema 2: Die Rolle internationalen Handels bei der Bestimmung von Spezialisierungsmustern sowie Spezialisierungsgraden. Viele verschiedene Maße von sektoraler Konzentration angewandt auf viele unterschiedliche Datenquellen kommen zu dem Ergebnis, dass Länder mit mittlerem Einkommen diversifiziertere Produktionsstrukturen aufweisen, als solche mit geringem oder hohem Einkommen. Wir bieten hierfür eine handelsbasierte Erklärung: Länder, die Kapital im Überfluss besitzen (d.h. Länder mit hohem Einkommen) sowie Länder, die Arbeit im Überfluss besitzen (d.h. Länder mit niedrigem Einkommen) haben, ceteris paribus, sehr wahrscheinlich symmetrische Verteilungen sektoraler Beschäftigungslevels (mit hohen Anteilen im kapital- bzw. arbeitsintensivem Sektor). Sind extrem kapital- oder arbeitsintensive Industrien weniger häufig, werden sich Länder mit mittlerem Einkommen auf ein umfangreicheres Angebot an Gütern spezialisieren als Länder mit hohem oder geringem Einkommen. Thema 3: Die Effekte von Faktorakkumulation auf die Verteilung von Produktionsfaktoren auf unterschiedliche ökonomische Sektoren. Das Ziel dieses Projektes ist es, einen analytischen Rahmen zu entwickeln, der es erlaubt Änderungen der sektoralen Verteilungsstrukturen von Produktionsfaktoren zu messen, und diesen anzuwenden. Zu diesem Zweck teilen wir den Beitrag aggregierter Kapitalakkumulation pro Arbeiter zu der Wachstumsrate des BIP pro Arbeiter in zwei Teile auf. Der erste Teil stellt das Ausmaß dar, in dem Produktionsfaktoren zwischen Sektoren mit unterschiedlichen Kapital-Arbeitsintensitäten verschoben werden. Der zweite Teil misst in welchem Ausmaß sich die Kapital-Arbeitsintensitäten ändern. Wir werden die Vorhersagen verschiedener Wachstumsmodelle mit den Daten vergleichen. Thema 4: Der Einfluss natürlicher Ressourcen auf die institutionelle und damit ökonomische Entwicklung eines Landes. Sowohl Ökonomen als auch Politikwissenschaftler haben in den letzen Jahren viele empirische Belege für den sogenannten "Fluch der natürlichen Ressourcen" bereitgestellt. Diese Hypothese besagt, dass ein Überfluss an natürlichen Ressourcen zu (a) niedrigeren Wachstumsraten, (b) einem erhöhten Bürgerkriegsrisiko und (c) niedrigerer Qualität der Institutionen eines Landes führt. Wir planen die bisherigen empirischen Belege des Ressourcenfluchs neu zu hinterfragen, unter besonderer Berücksichtigung der Messung von Ressourcenreichtum und der Qualität der Institutionen. Außerdem werden wir uns dem Thema und der Lösung von Endogenität in diesem Kontext widmen - einem immer wieder stark kritisierten Problem der einschlägigen Literatur.
The Evolution of Norms and Conventions in Economics

Institution: University of Vienna

Funding agency: WWTF (Vienna Science and Technology Fund)

Amount: 450.000 euro

Project duration: 2009 - 2015

Contact persons Maarten Janssen

Other teamleaders: Simon Weidenholzer and Josef Hofbauer

Short description:
Evolutionary game theory has developed into a major field of research at the interplay of mathematics, economics and biology. One of the main general aims of the analysis of evolutionary game theory is to study the conditions under which a population of players settles over time on a stable behavioural pattern. Economists have been interested in these developments in order to better understand (i) how social norms
and conventions emerge, (ii) how these norms and conventions influence indiviudal economic behaviour and (iii) the conditionsunder which these norms and conventions are stable over time. the present research project aims to contribute to this general field of inquiry by studying four subprojects, namely on (a) Social norms and economic incentives, (b) Work ethics and minimum effort games, (c) Selecting with whom to play and (d) Evolutionary equilibrium selection techniques.
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.
Experimental Markets with Search Frictions and Network Externalities

Institution: VCEE

Funding agency: Norwegian Research Council (no. 212996/F10)

Amount: Eur 70'000

Project duration: Jan. 2012 - Dec. 2015

Austrian Project team: J.-R. Tyran

Other teamleaders: Espen Moen

Short description:

We study two types of market institutions experimentally: Markets with search costs, and markets with network externalities. In markets with search costs the standard model provides fairly clear predictions about behavior. However, questions of bargaining power - and thus small group strategic interaction - are integral to search theories. A large body of experimental research shows large deviations from the equilibria of standard bargaining models. In markets with network externalities, the standard model offers less clear cut predictions. The ambiguity largely results from the absence of an accepted theory of equilibrium selection, and the fact that multiple equilibria are integral to markets with network externalities. In terms of lab behavior, markets with search costs and markets with network externalities fall between the optimism of anonymous, decentralized market behavior, and the pessimism of small group strategic interaction. It makes these markets both demanding and interesting to study.
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.
Understanding Combinatorial Clock Auctions

Funding agency: Oesterreiches Nationalbank Jubiläumfonds

Project number: 15994

Amount: Euro 100'000

Project duration: 2014 - 2017

Project team: Maarten Janssen, Bernhard Kasberger

Short description:
Combinatorial Clock Auctions (CCAs) have recently been used around the world to allocate spectrum for mobile telecom licenses. The optimal bidding behaviour in CCAs has, however, only been (partially) analyzed in a simple context where bidders only care about the package they themselves win and in what they have to pay for it.

Over the last year several papers have emerged that point at several weaknesses of CCAs. In this research project, we want to better understand the weaknesses of the design, the potential damaging outcomes the auction may lead to and how the auction design can be adapted to accommodate these weaknesses. In particular, we would like to consider the implications of incentives to raise rivals' cost, bidding under a budget constraint and valuations depending on auction outcomes. The project will use game theoretic analyses and simulation techniques.
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.
Energy transition, labor mobility and migration

Funding agency: BMBWF (Bundesministerium für Wissenschaft und Forschung) vertreten durch OeAD GmbH

Project amount: € 10.250,00

Project duration: 01.08.2024-30.09.2025

Project team: Alexandra Brausmann
Anti-migration sentiments: Parochial vs. Conditional altruism

Funding agency: Dilligenta Stiftung für empirische Forschung

Project amount: € 21.000,-

Project duration: 10/2023 - 09/2025

Project team: Christian Koch, Geoffrey Castillo

Short desciption:

Large-scale immigration frequently provokes a backlash among native populations. Conventional wisdom attributes this reaction to a near-universal distaste for sharing resources across ethnic lines. Recent studies, however, challenge this claim. It appears that what is often interpreted as parochial altruism may actually be a form of conditional altruism, where group boundaries serve as a means to determine who is likely to cooperate. The activation of these latent group boundaries may also be facilitated by competition for scarce resources. This research project seeks to investigate the extent to which cultural concerns are mediated by economic conditions and associated fairness perceptions. To accomplish this, we propose to conduct a tailored online experiment involving Germans and Turks, where we can manipulate whether economic and cultural concerns align or not.
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.
Essays on Distributional Macroeconomics - three interrelated projects studying the role of inequality and the distributional effects of several macroeconomic channels

Funding agency: ÖAW Doc Stipendium

Project number: 374010

Project amount: € 77.000,00

Project duration: 01.10.2021-30.09.2023

Project team: Philipp Schmidt-Dengler (Project Lead)
Discrimination and Fostering Trust

Funding agency: Diligentia Stiftung für empirische Forschung

Project number: AA3690011

Project amount: € 20.000,00

Project duration: 2019-2022

Project team: Wieland Müller

Short description:
Most of the literature surrounding the economics of discrimination has focused on eliciting preferences for discrimination and low trust through one-shot games. But this is where the existing literature has basically stopped – at highlighting the problem. Our goal is to take the next step by investigating simple yet potentially powerful solutions to the problem of low trust arising from ethnic discrimination with subjects from the general population. Given that discrimination is on the rise due to more ethnically diverse societies, the resulting low trust has become a pressing issue that begs solutions, lest it hampers economic progress. To the best of our knowledge, no other work has focused on engineering trust when there is discrimination. There has been much research into fostering trust, but not particularly in the presence of discrimination. This is the conceptual novelty of our proposed research.
Consulting for "Randomized Control Trial"

Funding agency: FFG

Project number: FA369004

Project amount: € 15.500,00

Project duration: 2019-2021

Project team: Wieland Müller

Short description:

As part of this project we consulted the FFG (Austrian Research Promotion Agency) to set up a randomized control trial (RCT) to ”test if easy scalable support measures (a combination of mentoring and software tools) are able to increase the innovation capacity in SMEs (small and medium-sized enterprises)."
The distribution of tenant benefits in Austrian social housing

Funding agency: OeNB Jubiläumsfondsprojekt

Project number: 18299

Amount: Euro 58'000

Project duration: 31.08.2020-31.05.2024

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.
Information Acquisition, Diffusion and Disclosure in Markets

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.
Supranational climate-policy delegation

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.
Understanding Consumer Search

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.
Temporary Migration, Integration and the Role of Policies

Funding agency: NORFACE (EU)

Amount: Euro 156,000 (University of Vienna Part)

Project duration: Nov 2009 - Jan 2014

Contact persons:
Dr. Karin Mayr, PD
Mag. Nora Prean
Mag. Oliver Reiter

Other teamleaders:
Prof. Giovanni Facchini, University of Nottingham
Prof. Pieter Bevelander, Malmö University
Prof. Herbert Brücker, Institute for Employment Research, Nuremberg
Prof. Stephen Drinkwater, Swansea University
Prof. Michael Landesmann, Vienna Institute for International Economic Studies
Ass.Prof. Gaia Narciso, Trinity College Dublin
Prof. Panu Poutvaara, University of Munich
Prof. Jan Rose Skaksen, Copenhagen Business School
Prof. Thomas Straubhaar, Hamburg Institute of International Economics
Prof. Jan van Ours, Tilberg University

Short description:
As transportation and communication costs decline and the income gap between sending and receiving countries remains large, migration pressure in Europe is likely to increase in the near future, and temporary and return migration will become an even more widespread phenomenon. The TEMPO research project will extend the frontier of knowledge on this important issue along several directions. First of all, using an array of existing and new datasets, it will look at the causes and consequences of temporary migration, considering both the perspective of the source and the destination country. Second, it will study the patterns of integration of economic and non-economic migrants, and how they relate to the time dimension of the migration decision. Particular attention will be paid to the role played by the diffusion of information within immigrant networks. Finally, the project will look at the process through which policies towards temporary and return migration are formed, and analyze their welfare effects both on the destination and the source countries.
Experimental Investigations of Labor Markets

Period: September 2008 - February 2015

Funding agency: Austrian Science Fund (project number FWF S10307)

Amount: Euro 350'000

Institution: VCEE & Department of Economics

Investigators: Rupert Sausgruber (WU Vienna) and Jean-Robert Tyran

Short description:

The project integrates recent findings in behavioral economics into traditional labor economics. We explore questions regarding labor supply and the provision of effort, including the analysis of incentive effects of taxation and redistribution on effort and the cognitive perception of the incentive effects. In addition, we make contributions to study cooperation in self-governed environments, the political acceptance of reform, and aspects of discrimination in the labor market. We have initiated research to explore behavior in markets with asymmetric information, the measurement and determinants of motivation at work, gender sorting, and the effect of solidarity on social mobility. We have conducted conventional lab experiments with student subjects, large-scale internet experiments with participants form the general population, and have conducted natural field experiments.

More information here
International Trade, Resource Abundance, Development and Production Structures

Period: 31.07.2011-30.08.2014
Project team: Alejandro Cunat
Amount: Euro 195.284,25

Description:

Dieses Forschungsprojekt analysiert die unterschiedlichen Kanäle durch die internationaler Handel und Ressourcenreichtum Entwicklungs- sowie Industrialisierungspfade von Ländern beeinflussen. Insbesondere planen wir die folgenden Themengebiete zu behandeln: Thema 1: Die relative Wichtigkeit von komparativen Vorteilen und der "proximity to the core of world demand" bei der Festlegung von Industrialisierungspfaden. Wir analysieren die Rolle von internationalem Handel und der geographischen Position bei der Bestimmung von Produktionsstrukturen unterschiedlicher Länder. Zu diesem Zweck entwickeln wir ein "many-country" Modell, welches Nicht-Homothetizität, Transportkosten, komparative Vorteile und Besonderheiten der "New Trade Theory" berücksichtigt. Dieses Modell erlaubt uns, die Effekte von Nachfrage, Spezialisierung und Distanz in ihrer Interaktion bei der Bestimmung der GleichgewichtsProduktionsstrukturen unterschiedlicher Ländern zu analysieren. Thema 2: Die Rolle internationalen Handels bei der Bestimmung von Spezialisierungsmustern sowie Spezialisierungsgraden. Viele verschiedene Maße von sektoraler Konzentration angewandt auf viele unterschiedliche Datenquellen kommen zu dem Ergebnis, dass Länder mit mittlerem Einkommen diversifiziertere Produktionsstrukturen aufweisen, als solche mit geringem oder hohem Einkommen. Wir bieten hierfür eine handelsbasierte Erklärung: Länder, die Kapital im Überfluss besitzen (d.h. Länder mit hohem Einkommen) sowie Länder, die Arbeit im Überfluss besitzen (d.h. Länder mit niedrigem Einkommen) haben, ceteris paribus, sehr wahrscheinlich symmetrische Verteilungen sektoraler Beschäftigungslevels (mit hohen Anteilen im kapital- bzw. arbeitsintensivem Sektor). Sind extrem kapital- oder arbeitsintensive Industrien weniger häufig, werden sich Länder mit mittlerem Einkommen auf ein umfangreicheres Angebot an Gütern spezialisieren als Länder mit hohem oder geringem Einkommen. Thema 3: Die Effekte von Faktorakkumulation auf die Verteilung von Produktionsfaktoren auf unterschiedliche ökonomische Sektoren. Das Ziel dieses Projektes ist es, einen analytischen Rahmen zu entwickeln, der es erlaubt Änderungen der sektoralen Verteilungsstrukturen von Produktionsfaktoren zu messen, und diesen anzuwenden. Zu diesem Zweck teilen wir den Beitrag aggregierter Kapitalakkumulation pro Arbeiter zu der Wachstumsrate des BIP pro Arbeiter in zwei Teile auf. Der erste Teil stellt das Ausmaß dar, in dem Produktionsfaktoren zwischen Sektoren mit unterschiedlichen Kapital-Arbeitsintensitäten verschoben werden. Der zweite Teil misst in welchem Ausmaß sich die Kapital-Arbeitsintensitäten ändern. Wir werden die Vorhersagen verschiedener Wachstumsmodelle mit den Daten vergleichen. Thema 4: Der Einfluss natürlicher Ressourcen auf die institutionelle und damit ökonomische Entwicklung eines Landes. Sowohl Ökonomen als auch Politikwissenschaftler haben in den letzen Jahren viele empirische Belege für den sogenannten "Fluch der natürlichen Ressourcen" bereitgestellt. Diese Hypothese besagt, dass ein Überfluss an natürlichen Ressourcen zu (a) niedrigeren Wachstumsraten, (b) einem erhöhten Bürgerkriegsrisiko und (c) niedrigerer Qualität der Institutionen eines Landes führt. Wir planen die bisherigen empirischen Belege des Ressourcenfluchs neu zu hinterfragen, unter besonderer Berücksichtigung der Messung von Ressourcenreichtum und der Qualität der Institutionen. Außerdem werden wir uns dem Thema und der Lösung von Endogenität in diesem Kontext widmen - einem immer wieder stark kritisierten Problem der einschlägigen Literatur.
The Evolution of Norms and Conventions in Economics

Institution: University of Vienna

Funding agency: WWTF (Vienna Science and Technology Fund)

Amount: 450.000 euro

Project duration: 2009 - 2015

Contact persons Maarten Janssen

Other teamleaders: Simon Weidenholzer and Josef Hofbauer

Short description:
Evolutionary game theory has developed into a major field of research at the interplay of mathematics, economics and biology. One of the main general aims of the analysis of evolutionary game theory is to study the conditions under which a population of players settles over time on a stable behavioural pattern. Economists have been interested in these developments in order to better understand (i) how social norms
and conventions emerge, (ii) how these norms and conventions influence indiviudal economic behaviour and (iii) the conditionsunder which these norms and conventions are stable over time. the present research project aims to contribute to this general field of inquiry by studying four subprojects, namely on (a) Social norms and economic incentives, (b) Work ethics and minimum effort games, (c) Selecting with whom to play and (d) Evolutionary equilibrium selection techniques.
Experimental Markets with Search Frictions and Network Externalities

Institution: VCEE

Funding agency: Norwegian Research Council (no. 212996/F10)

Amount: Eur 70'000

Project duration: Jan. 2012 - Dec. 2015

Austrian Project team: J.-R. Tyran

Other teamleaders: Espen Moen

Short description:

We study two types of market institutions experimentally: Markets with search costs, and markets with network externalities. In markets with search costs the standard model provides fairly clear predictions about behavior. However, questions of bargaining power - and thus small group strategic interaction - are integral to search theories. A large body of experimental research shows large deviations from the equilibria of standard bargaining models. In markets with network externalities, the standard model offers less clear cut predictions. The ambiguity largely results from the absence of an accepted theory of equilibrium selection, and the fact that multiple equilibria are integral to markets with network externalities. In terms of lab behavior, markets with search costs and markets with network externalities fall between the optimism of anonymous, decentralized market behavior, and the pessimism of small group strategic interaction. It makes these markets both demanding and interesting to study.
Understanding Combinatorial Clock Auctions

Funding agency: Oesterreiches Nationalbank Jubiläumfonds

Project number: 15994

Amount: Euro 100'000

Project duration: 2014 - 2017

Project team: Maarten Janssen, Bernhard Kasberger

Short description:
Combinatorial Clock Auctions (CCAs) have recently been used around the world to allocate spectrum for mobile telecom licenses. The optimal bidding behaviour in CCAs has, however, only been (partially) analyzed in a simple context where bidders only care about the package they themselves win and in what they have to pay for it.

Over the last year several papers have emerged that point at several weaknesses of CCAs. In this research project, we want to better understand the weaknesses of the design, the potential damaging outcomes the auction may lead to and how the auction design can be adapted to accommodate these weaknesses. In particular, we would like to consider the implications of incentives to raise rivals' cost, bidding under a budget constraint and valuations depending on auction outcomes. The project will use game theoretic analyses and simulation techniques.
Representative Democracy: Theory and Experiments

Institution:
VCEE, Wiener Zentrum für Experimentelle Wirtschaftsforschung

Funding Agency:
Deutsche Forschungsgemeinschaft DFG

Project Number: WA3559/1-1

Project duration:
Sep. 2014 - Aug. 2017

Project team:
Univ.-Prof. Dr. Jean-Robert Tyran
Alexander K. Wagner, PhD

Short description:

This proposal incorporates insights from psychology into economic reasoning to better understand political processes and outcomes in representative democracy. In terms of academic disciplines, the proposal is located at the crossroads of economics, psychology and political science, and in terms of method it is grounded in both theory and experiment. Economic reasoning will be used to investigate how rational and self-interested politicians change their behaviour when voters are forgetful, inattentive and have limited foresight. This approach starts from the well-defined benchmark of rational choice theory and adds psychological realism to how voters are modelled. The theoretical investigation is expected to yield clear and testable predictions. These predictions are tested in a controlled laboratory setting. The general aim is to provide an empirically grounded model of the political process and to inform us when we need to be careful in advancing conclusions from rationalistic models.

Zusammenfassung:

Dieses Projekt integriert Erkenntnisse aus der Psychologie in den ökonomischen Erklärungsansatz, um politische Prozesse und deren Auswirkungen auf die repräsentative Demokratie besser zu verstehen. Der Antrag kombiniert Elemente der Ökonomik, der Psychologie und der Politikwissenschaften und ist daher thematisch interdisziplinär. Methodisch basiert er auf einem sowohl theoretischen als auch experimentellen Forschungsansatz. Der theoretische Teil untersucht, wie opportunistische, d.h. rationale und auf ihren eigenen Nutzen bedachte Politiker ihr Verhalten ändern, wenn Wähler vergesslich, unaufmerksam oder nur beschränkt vorausschauend sind. Ausgangspunkt ist dabei die Theorie der rationalen Entscheidungen, und die entsprechenden Modelle werden durch psychologisch realistische Annahmen des Wählerverhaltens erweitert. Diese Analyse soll klare und überprüfbare Verhaltenshypothesen liefern, die unter kontrollierten Laborbedingungen experimentell getestet werden können.Das allgemeine Ziel des Antrags ist es, ein empirisch fundiertes Modell des politischen Prozesses zu entwickeln. Dieses Modell soll erklären, unter welchen Bedingungen opportunistische Entscheidungsträger ineffiziente (z.B. populistische) Politiken implementieren. Die daraus resultierenden Erkenntnisse sind nicht nur unter wissenschaftlichen, sondern auch aus anwendungsorientierten Gesichtspunkten wertvoll. Sie sind wissenschaftlich wichtig, weil sie Aufschlüsse zur Robustheit von Modellen mit strikt rationalen Akteuren liefern und uns warnen, wann aus solchen Modellen abgeleitete Empfehlungen mit Vorbehalten zu versehen sind. Aus einer praktischen Perspektive heraus können Einsichten aus diesem Projekt zum Diskurs über die Gestaltung robuster politischer Institutionen beitragen. Solche Institutionen wollen beschränkt rationale Bürger unterstützen bessere Entscheidungen zu treffen und ineffiziente politische Entscheidungen weniger wahrscheinlich machen.
Essays on Consumer Search

Funding agency: ÖAW

Amount: 70.000 Euro

Project duration: 2016 - 2018

Univ.-Prof. Dr. Maarten Janssen

Short description:

The consumer search literature in economics has made important steps in relaxing the informational assumptions of traditional economics, However, the literature still endows firms and consumers with a perfect understanding of the game they are in. They know all the parameters of the model: the number of _firms in the industry, their costs, the structure of the informational heterogeneity among consumers, etc. Some recent literature developed a more sophisticated approach towards informational frictions in that consumers are unaware of some parameters of the model (for example, _firms' costs) The research we aim to perform In the research project "Information and consumer search" extends consumer search theory by considerably adapting the informational assumptions made.
Information and Consumer Research

Funding agency: FWF

Project number: P 27995

Amount: Euro 90'000

Project duration: 2015 - 2017

Univ.-Prof. Dr. Maarten Janssen

Anton Sobolev (PhD Student)

Short description:

The consumer search literature in economics has made important steps in relaxing the informational assumptions of traditional economics, However, the literature still endows firms and consumers with a perfect understanding of the game they are in. They know all the parameters of the model: the number of _firms in the industry, their costs, the structure of the informational heterogeneity among consumers, etc. Some recent literature developed a more sophisticated approach towards informational frictions in that consumers are unaware of some parameters of the model (for example, _firms' costs) The research we aim to perform In the research project "Information and consumer search" extends consumer search theory by considerably adapting the informational assumptions made.
FIW Cooperation Project

Institution: Forschungsschwerpunkt Internationale Wirtschaft

Funding agency: Bundesministerium für Wirtschaft, Familie und Jugend

Amount: €1,253,694

Project duration: 2013 - 2018

Contact person: Alejandro Cunat

Austrian Project team: Johannes Kepler Universität, Universität Wien, WIIW, WIFO, Wirtschaftsuniversität Wien

Other teamleaders: Prof. Harald Badinger (WU), Prof. Fritz Breuss (FIW), Prof. Michael Landesmann (Linz)

Short description:

Research-related and graduate-teaching activities in the area of International Economics.
Fairness, personal responsibility, and the welfare state

Funding agency: NORFACE (EU)

Project number 462-14-033

Amount: Euro 250'000 (Austrian Part)

Project duration: Jan. 2015 - Dec.2018

Austrian Project team:
Univ.-Prof. Dr. Jean-Robert Tyran
Dr. Axel Sonntag
Dr. Peter Bednarik

Other teamleaders:
Norway: Alexander Cappelen (NHH Bergen), Stein Kuhnle (U Bergen), Sigrid Suetens (U Tilburg)

Short description:

The aim of the research project "Fairness, personal responsibility and the welfare state" is to analyze how fairness considerations, in particular with respect to personal responsibility, affect the support and effectiveness of welfare policies. The European welfare states are faced with important challenges, in particular related to financial strains on the welfare system, changing migration flows and increasing inequality. Partly as a response to these challenges, there is an increasing focus on personal responsibility. The proposed research project provides new knowledge about how the welfare states can meet these challenges and how concerns for personal responsibility can be integrated in the design of welfare schemes in a way that is perceived as fair.

Four research teams from Norway, the Netherlands, and Austria, will take a cross-disciplinary perspective on fairness and use an innovative combination of methods, including administrative register data, surveys, as well as field and laboratory experiments.

This project is part of a major transnational research programme on the topic of Welfare State Futures. This highly topical programme makes use of a variety of approaches, enables and encourages multi-disciplinarity and offers a fruitful basis for developing of a European perspective on the futures of the welfare state.
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.
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.
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.
Information Acquisition, Diffusion and Disclosure in Markets

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.
Supranational climate-policy delegation

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.
On the Theory and Testing of Changing Choice Baviour

Funding agency: Austrian National Bank (OeNB)

Project number: 18719

Amount: Euro 99.000,-

Project duration: 10/2021 - 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.
Pricing in imperfectly competitive markets

Funding agency: FWF

Project number: FG 6-G

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.
Understanding Social Mobility – An experimental approach

Funding agency: Austrian National Bank

Project number: 18633

Amount: Euro 247'000

Project duration: Oct 2021 - Sep 2024

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.
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.
The distribution of tenant benefits in Austrian social housing

Funding agency: OeNB Jubiläumsfondsprojekt

Project number: 18299

Amount: Euro 58'000

Project duration: 1.3.2020-31.12.2021

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.
Understanding Combinatorial Clock Auctions

Funding agency: Oesterreiches Nationalbank Jubiläumfonds

Project number: 15994

Amount: Euro 100'000

Project duration: 2014 - 2017

Project team: Maarten Janssen, Bernhard Kasberger

Short description:
Combinatorial Clock Auctions (CCAs) have recently been used around the world to allocate spectrum for mobile telecom licenses. The optimal bidding behaviour in CCAs has, however, only been (partially) analyzed in a simple context where bidders only care about the package they themselves win and in what they have to pay for it.

Over the last year several papers have emerged that point at several weaknesses of CCAs. In this research project, we want to better understand the weaknesses of the design, the potential damaging outcomes the auction may lead to and how the auction design can be adapted to accommodate these weaknesses. In particular, we would like to consider the implications of incentives to raise rivals' cost, bidding under a budget constraint and valuations depending on auction outcomes. The project will use game theoretic analyses and simulation techniques.