Research Projects

Repeated games with transfers

When firms want to collude with other firms or ensure the performance of their suppliers and employees, they find it difficult to write a (complete) externally enforced contract and instead have to rely on self-enforcing agreements. Observing that in many of these relationships monetary transfers are possible, my coauthor Sebastian Kranz and I systematically analyze repeated games with transfers.

"Discounted Stochastic Games with Voluntary Transfers", 2017, Economic Theory, with Sebastian Kranz (working paper version)

"Infinitely Repeated Games with Public Monitoring and Monetary Transfers'', with Sebastian Kranz, 2012, Journal of Economic Theory

Agency problems and limited liability

Agency problems arise when ownership and control are separated. They occur for example when an investor funds a project of an entrepreneur with limited wealth or when shareholders delegate decision making to the managers of the firm. Contracts and legal regulation can be used to align the incentives of the agent with those of the principal. My research in this area is concerned with the following questions: Should manager liability be limited by a business judgment rule? What are optimal compensation agreements between facilities that create negative externalities and host communities, if communities have not enough funds to breach the contract in light of changed circumstances? Generally, what is the effect of limited liability in models with hidden information and with hidden action?

"Pollution Claim Settlements Reconsidered: Hidden Information and Bounded Payments", with Patrick Schmitz, European Economic Review, 2018

working paper version

"Why Agents need Discretion - the Business Judgment Rule as Optimal Standard of Care'', with Andreas Engert, 2016, Review of Law and Economics


"Repeated Moral Hazard and Contracts with Memory: The case of Risk-Neutrality'', with Patrick Schmitz, 2012, International Economic Review

Incomplete contracts and renegotiation

Starting from the observation that contracts are often incomplete and will be renegotiated, how can the resulting hold-up problem be mitigated? My research considers the role of contract law, asymmetric information about outside options and repeated interactions as possible solutions.

"Reconciliating Relational Contracting and Hold-up: A Model of Repeated Negotiations", with Sebastian Kranz, 2017

"Investments as Signals of Outside Options'', with Patrick Schmitz, Journal of Economic Theory, 2014

"Renegotiation-proof Relational Contracts'', with Sebastian Kranz, Games and Economic Behavior, 2013

"Expectation Damages, Divisible Contracts, and Bilateral Investment'', American Economic Review, 2009

Incentives in organizations

Processes within the firm are also often governed by incentive contracts and repeated interactions. My research addresses the following questions: For efficient relational incentive contracts, should production be organized in teams or in hierarchies? Is it possible to make sense of the management wisdom "A's hire A's and B's hire C's" in a simple game-theoretic model? How does an optimal mechanism to assign an unpleasant task look like when payments cannot be used?

"Assigning an unpleasant task without payment", 2018, with Thomas Tröger

"Strategic recruiting in ongoing hierarchies" Economics Letters, 2017

"Delegation, Monitoring, and Relational Contracts'', with Sebastian Kranz, Economics Letters, 2012

Strategic reasoning and eye-tracking

This research is concerned with the question "How informative are gaze patterns about choices and to what extent are subjects able to exploit this information, and how does this depend on the strategic situation?".

"Strategic Gaze: An Interactive Eye-Tracking Study", with Jan Hausfeld and Konstantin Hesler, 2018