Publications

We analyze optimal taxation of labor and capital income in a life cycle framework with idiosyncratic income risk and ex-ante heterogeneity. Tax instruments are simple in that they can only condition on current income. We provide a decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is independent of the social welfare function and determined by the degree of income risk and risk aversion. The optimal linear capital tax is non-zero and trades off redistribution and insurance against savings distortions. Our quantitative results reveal that the insurance component contributes significantly to optimal labor income tax rates and provides a lower bound on optimal taxes. Optimal capital taxes are significant.

The investigation of learning processes by assessing students’ experience along with objective characteristics within a classroom context has a long tradition in empirical learning process research (e.g. Sembill, 1984 et passim; Wild & Krapp, 1996). However, most of the existing studies confine themselves to psychological variables that seem to be too narrowly considered, as there is theoretical and empirical evidence proving the involvement of somatic and psychological processes in learning and in stress reactions. Furthermore there is a lack of studies that investigate situation-related experience (states) as an outcome of interactions between relatively stable characteristics (traits) and continuously changing “objective” context conditions. Against this background, we will present an approach for cross-classified multilevel longitudinal modelling of person-situation interactions in naturalistic educational settings. We illustrated our model with the example of students’ stress experience referring to empirical data that we measured within a multidisciplinary research project (pedagogy, psychology, adolescent medicine). 53 students at a public German vocational school were investigated during 9 lessons. There are up to 38 state measurements per person, resulting in 2,014 measurements in total. Taking into account that states are nested within persons and within situations we applied a cross-classified multilevel model to analyse effects on students’ stress experience. The analysis shows significant person-situation interactions between academic self-concept and classroom demands and between baseline cortisol concentration and classroom demands: the relation between classroom demands and stress experience depends on relatively stable person-related characteristics. A deeper knowledge about the complex interrelations between traits, states, and continuously changing context conditions seems to be essential for a more holistic understanding of learning at school and for the identification of crucial aspects for an evidence-based design and implementation of teaching and learning arrangements.

This paper describes a hierarchy with peer hiring to explore the reasons behind the management rule “A’s hire A’s and B’s hire C’s”. Workers are promoted based on talent and therefore like to hire less talented co-workers. This is why B’s hire C’s. The same logic should cause A’s to hire B’s, but there is a trade-off in the model: A’s are more likely to be promoted, and a manager profits from more talented subordinates. If this effect is strong enough, then indeed A’s hire A’s

We conduct a laboratory experiment that tests two fundamental predictions unique to salience theory. If an agent purchases one of two vertically differentiated products, salience theory makes the following two distinct predictions. First, it hypothesizes that a higher expected price level for both products shifts demand toward the more expensive, high-quality product. Second, it predicts that demand for the high-quality product is larger if the price level is expectedly high than if it is unexpectedly high. In our experiment, subjects purchased fast or slow Internet access at different price levels. Our results strongly support both predictions of salience theory. (JEL: D03)

Emotionen beeinflussen im Zusammenspiel mit weiteren Aspekten das Lernen und Lehren, wobei die Interaktion von Person und Umwelt von großer Bedeutung ist. Vor diesem Hintergrund analysiert der Beitrag mittels eines Kohortenvergleichs über fünf Jahre mögliche kurz- und längerfristige Auswirkungen der Implementation des Zentralabiturs auf die Erfolgsunsicherheit im Abitur und die Angst vor Misserfolg von Abiturientinnen und Abiturienten sowie auf den Einfluss unterrichtlicher und schulischer Faktoren auf diese Emotionen - zusätzlich nach Leistungsniveau differenziert. Strukturgleichungsmodelle zeigen längerfristig (2007 - 2011) die Stabilität der Emotionen, eine Abnahme des Effekts des Schulklimas auf die Erfolgsunsicherheit im Abitur sowie differenzielle Wirkungen je nach Leistungsniveau. Die meisten Effekte bleiben jedoch über die Jahre und die Prüfungsform (dezentral-zentral) konstant.

Including disaggregate variables or using information extracted from the disaggregate variables into a forecasting model for an economic aggregate may improve the forecasting accuracy. In this paper we suggest to use the boosting method to select the disaggregate variables which are most helpful in predicting an aggregate of interest. We conduct a simulation study to investigate the variable selection ability of this method. To assess the forecasting performance a recursive pseudo-out-of-sample forecasting experiment for six key Euro area macroeconomic variables is conducted. The results suggest that using boosting to select relevant predictors is a feasible and competitive approach in forecasting an aggregate.

We estimate the causal impact of restructuring aid granted by the European Commission between 2000 and 2012 on the survival and financial viability of aided firms. Using a comprehensive dataset we find that restructuring aid decreases the hazard rate of a market exit by 58–68% and increases firms’ average survival time by 8–15 years, depending on the definition of firm survival. We also find that aid receiving firms have a significantly higher probability to improve their financial viability than the counterfactual group in the longer run.

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dc.contributor.author: Heck, Jasmin

Most social-preference models have been tailored to yield only a full-defection equilibrium in one- shot linear public-good situations. This paper determines the Nash-equilibrium sets that result from experiment participants’ elicited preferences. The data show that multiple equilibria are relatively frequent even in a standard three-player setting. In this perspective, the common finding of close-to- omnilateral defection at the end of repeated public-good games is surprising and raises the question of why the dynamics of play seem to select this equilibrium out of the existing equilibria.

In a field experiment with a retail chain (1,300 employees, 193 shops), randomly selected sales teams received a bonus. The bonus increases both sales and number of customers dealt with by 3 percent. Each dollar spent on the bonus generates $3.80 in sales, and $2.10 in profit. Wages increase by 2.2 percent while inequality rises only moderately. The analysis suggests effort complementarities to be important, and the effectiveness of peer pressure in overcoming free-riding to be limited. After rolling out the bonus treatment, and control shops' performance converge, suggesting long-term stability of the treatment effect.

We study the effect of unannounced recognition on performance with a field experiment involving first-year Dutch university students attending tutorials as part of a compulsory course. Our treatment, given in randomly selected tutorial groups, was to publicly recognize students who scored within the top 30% of their respective group on the first of the two midterm exams. The overall treatment effect on the second midterm grade is 0.03s (s=s= grade standard deviation) for the recipients of recognition, and 0.15s for the non-recipients, both statistically insignificant. The effect for the non-recipients increases with class attendance (itself unaffected by our treatment) and proximity to the cutoff grade for recognition, reaching a significant 0.55s for the 23% of the non-recipients who attended at least 12 out of 13 classes and were within the first quartile of the distance to cutoff. We argue that conformity to performance norm is among the forces shaping the effects we observe.