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Publications @ the Department of Economics

Refereed Journal Articles

Open list in Research Information System


Understanding cognitive decline in older ages: The role of health shocks

V. Schiele, H. Schmitz, European Economic Review (2023), 151

Individual cognitive functioning declines over time. We seek to understand how adverse physical health shocks in older ages contribute to this development. By use of event-study methods and data from the USA, England, and several countries in Continental Europe, we find evidence that health shocks lead to an immediate and persistent decline in cognitive functioning. This robust finding holds in all regions representing different health insurance systems and seems to be independent of underlying individual demographic characteristics such as sex and age. We also ask whether variables that are susceptible to policy action can reduce the negative consequences of a health shock. Our results suggest that neither compulsory education nor retirement regulations moderate the effects, thus emphasizing the importance for cognitive functioning of maintaining good physical health in old age.

Isolating Personal Knowledge Spillovers: Coinventor Deaths and Spatial Citation Differentials

B. Balsmeier, L. Fleming, S. Lück, American Economic Review: Insights (2023), 5(1), pp. 21-33

<jats:p> We propose a new method to estimate and isolate the localization of knowledge spillovers due to the physical presence of a person, using after-application but pre-grant deaths of differently located coinventors of the same patent. The approach estimates the differences in local citations between the deceased and still-living inventors at increasingly distant radii. Patents receive 26 percent fewer citations from within a radius of 20 miles around the deceased, relative to still-living coinventors. Differences attenuate with time and distance, are stronger when still-living coinventors live farther from the deceased, and hold for a subsample of possibly premature deaths. (JEL O31, O33, O34, R32) </jats:p>

Who benefits from quality competition in health care? A theory and a laboratory experiment on the relevance of patient characteristics

J. Brosig-Koch, B. Hehenkamp, J. Kokot, Health Economics (2023)

We study how competition between physicians affects the provision of medical care. In our theoretical model, physicians are faced with a heterogeneous patient population, in which patients systematically vary with regard to both their responsiveness to the provided quality of care and their state of health. We test the behavioral predictions derived from this model in a controlled laboratory experiment. In line with the model, we observe that competition significantly improves patient benefits as long as patients are able to respond to the quality provided. For those patients, who are not able to choose a physician, competition even decreases the patient benefit compared to a situation without competition. This decrease is in contrast to our theoretical prediction implying no change in benefits for passive patients. Deviations from patient-optimal treatment are highest for passive patients in need of a low quantity of medical services. With repetition, both, the positive effects of competition for active patients as well as the negative effects of competition for passive patients become more pronounced. Our results imply that competition can not only improve but also worsen patient outcome and that patients’ responsiveness to quality is decisive.


Anonymity and Self-Expression in Online Rating Systems - An Experimental Analysis

B. Hoyer, D. van Straaten, Journal of Behavioral and Experimental Economics (2022), 98, pp. 101869


Network Disruption and the Common-Enemy Effect

B. Hoyer, K. De Jaegher, International Journal of Game Theory (2022)


Differences in NPI strategies against COVID-19

M. Redlin, Journal of Regulatory Economics (2022)

<jats:title>Abstract</jats:title><jats:p>Non-pharmaceutical interventions are an effective strategy to prevent and control COVID-19 transmission in the community. However, the timing and stringency to which these measures have been implemented varied between countries and regions. The differences in stringency can only to a limited extent be explained by the number of infections and the prevailing vaccination strategies. Our study aims to shed more light on the lockdown strategies and to identify the determinants underlying the differences between countries on regional, economic, institutional, and political level. Based on daily panel data for 173 countries and the period from January 2020 to October 2021 we find significant regional differences in lockdown strategies. Further, more prosperous countries implemented milder restrictions but responded more quickly, while poorer countries introduced more stringent measures but had a longer response time. Finally, democratic regimes and stronger manifested institutions alleviated and slowed down the introduction of lockdown measures.</jats:p>

Modelling artificial intelligence in economics

T. Gries, W. Naudé, Journal for Labour Market Research (2022), 56(1), 12

<jats:title>Abstract</jats:title><jats:p>We provide a partial equilibrium model wherein AI provides abilities combined with human skills to provide an aggregate intermediate service good. We use the model to find that the extent of automation through AI will be greater if (a) the economy is relatively abundant in sophisticated programs and machine abilities compared to human skills; (b) the economy hosts a relatively large number of AI-providing firms and experts; and (c) the task-specific productivity of AI services is relatively high compared to the task-specific productivity of general labor and labor skills. We also illustrate that the contribution of AI to aggregate productive labor service depends not only on the amount of AI services available but on the endogenous number of automated tasks, the relative productivity of standard and IT-related labor, and the substitutability of tasks. These determinants also affect the income distribution between the two kinds of labor. We derive several empirical implications and identify possible future extensions.</jats:p>

The Market for Belief Systems: A Formal Model of Ideological Choice

T. Gries, V. Müller, J.T. Jost, Psychological Inquiry (2022), 33(2), pp. 65-83


Marginal College Wage Premium under Selection into Employment

M. Westphal, D.A. Kamhöfer, H. Schmitz, Economic Journal (2022), 132(646), pp. 2231-2272

Late-Career Unemployment and Cognitive Abilities

D. Freise, H. Schmitz, M. Westphal, Journal of Health Economics (2022), 86

We study the effect of unemployment on cognitive abilities among individuals aged between 50 and 65 in Europe. To this end, we exploit plant closures and use flexible event-study estimations together with an experimentally elicited measure of fluid intelligence, namely word recall. We find that, within a time period of around eight years after the event of unemployment, cognitive abilities only deteriorate marginally — the effects are insignificant both in statistical and economic terms. We do, however, find significant effects of late-career unemployment on the likelihood to leave the labor force, and short-term effects on mental health problems such as depression and sleep problems.

Wage Bargaining and Employment Revisited: Separability and Efficiency in Collective Bargaining

C. Haake, T. Upmann, P. Duman, Scandinavian Journal of Economics (2022)

We analyse the two-dimensional Nash bargaining solution (NBS) by deploying the standard labour market negotiations model of McDonald and Solow (1981). We show that the two-dimensional bargaining problem can be decomposed into two one-dimensional problems, such that the two solutions together replicate the solution of the two-dimensional problem if the NBS is applied. The axiom of Independence of Irrelevant Alternatives is shown to be crucial for this type of decomposability. This result has significant implications for actual negotiations because it allows for the decomposition of a multi-dimensional bargaining problem into one-dimensional problems---and thus helps to facilitate real-world negotiations.


Spring Forward, Don't Fall Back: The Effect of Daylight Saving Time on Road Safety

C. Bünnings, V. Schiele, The Review of Economics and Statistics (2021), 103(1), pp. 165-176

<jats:p> In this paper, we analyze the effect of light conditions on road accidents and estimate the long run consequences of different time regimes for road safety. Identification is based on variation in light conditions induced by differences in sunrise and sunset times across space and time. We estimate that darkness causes annual costs of more than £500 million in Great Britain. By setting daylight saving time year-round 8 percent of these costs could be saved. Thus, focusing solely on the short run costs related to the transition itself underestimates the total costs of the current time regime. </jats:p>

Socio-legal systems and implementation of the Nash solution in Debreu–Hurwicz equilibrium

C. Haake, W. Trockel, Review of Economic Design (2021)

<jats:title>Abstract</jats:title><jats:p>In this article we combine Debreu’s (Proc Natl Acad Sci 38(10):886–893, 1952) social system with Hurwicz’s (Econ Design 1(1):1–14, 1994; Am Econ Rev 98(3):577–585, 2008) ideas of embedding a “desired” game form into a “natural” game form that includes all feasible behavior, even if it is “illegal” according to the desired form. For the resulting socio-legal system we extend Debreu’s concepts of a social system and its social equilibria to a socio-legal system with its Debreu–Hurwicz equilibria. We build on a more general version of social equilibrium due to Shafer and Sonnenschein (J Math Econ 2(3):345–348, 1975) that also generalizes the dc-mechanism of Koray and Yildiz (J Econ Theory 176:479–502, 2018) which relates implementation via mechanisms with implementation via rights structures as introduced by Sertel (Designing rights: invisible hand theorems, covering and membership. Tech. rep. Mimeo, Bogazici University, 2001). In the second part we apply and illustrate these new concepts via an application in the narrow welfarist framework of two person cooperative bargaining. There we provide in a socio-legal system based on Nash’s demand game an implementation of the Nash bargaining solution in Debreu–Hurwicz equilibrium.</jats:p>

Educational Assimilation of First-Generation and Second-Generation Immigrants in Germany

T. Gries, M. Redlin, M. Zehra, Journal of International Migration and Integration (2021)

<jats:title>Abstract</jats:title><jats:p>Using data from the German Socio-Economic Panel for 1984–2018, we analyze the intergenerational education mobility of immigrants in Germany by identifying the determinants of differences in educational stocks for first- and second-generation immigrants in comparison to individuals without a migration background. Our results show that on average, first-generation immigrants have fewer years of schooling than native-born Germans and have a disproportionate share of lower educational qualifications. This gap is strongly driven by age at immigration, with immigration age and education revealing a nonlinear relationship. While the gap is relatively small among individuals who migrate at a young age, integrating in the school system at secondary school age leads to large disadvantages. Examining the educational mobility of immigrants in Germany, we identify an inter-generational catch-up in education. The gap in education between immigrants and natives is reduced for the second generation. Finally, we find that country of origin differences can account for much of the education gap. While immigrants with an ethnic background closer to the German language and culture show the best education outcomes, immigrants from Turkey, Italy, and other southern European countries and especially the group of war refugees from Syria, Afghanistan, Iraq and other MENA countries, have the lowest educational attainment.</jats:p>

Anthropogenic climate change: the impact of the global carbon budget

M. Redlin, T. Gries, Theoretical and Applied Climatology (2021)

<jats:title>Abstract</jats:title><jats:p>Using time series data for the period 1959–2015, our empirical analysis examines the simultaneous effects of the individual components of the global carbon budget on temperature. Specifically, we explore the possible effects of carbon emissions caused by fossil fuel combustion, cement production, land-use change emissions, and carbon sinks (here in terms of land sink and ocean sink) on climate change. The simultaneous inclusion of carbon emissions and carbon sinks allows us to look at the coexistent and opposing effects of the individual components of the carbon budget and thus provides a holistic perspective from which to explore the relationship between the global carbon budget and global warming. The results reveal a significant positive effect of carbon emissions on temperature for both fossil fuels emissions and emissions from land-use change, confirming previous results concerning carbon dioxide and temperature. Further, while ocean sink does not seem to have a significant effect, we identify a temperature-decreasing effect for land sink.</jats:p>


Data-driven local polynomial for the trend and its derivatives in economic time series

Y. Feng, T. Gries, M. Fritz, Journal of Nonparametric Statistics (2020), pp. 510-533


Modern sector development: The role of exports and institutions in developing countries

T. Gries, R. Grundmann, Review of Development Economics (2020), pp. 644-667


Gender, competitiveness, and task difficulty: Evidence from the field

B. Hoyer, T. van Huizen, L.. Keijzer, S.. Rezaei, S. Rosenkranz, B.. Westbrock, Labour Economics (2020)

This study examines the gender gap in competitiveness in an educational setting and tests whether this gap depends on the difficulty of the task at hand. For this purpose, we administered a series of experiments during the final exam of a university course. We confronted three cohorts of undergraduate students with a set of bonus questions and the choice between an absolute and a tournament grading scheme for these questions. To test the moderating impact of task difficulty, we (randomly) varied the difficulty of the questions between treatment groups. We find that, on average, women are significantly less likely to select the tournament scheme. However, the results show that the gender gap in tournament entry is sizable when the questions are relative easy, but much smaller and statistical insignificant when the questions are difficult.

Matching Strategies of Heterogeneous Agents under Incomplete Information in a University Clearinghouse

B. Hoyer, N. Stroh-Maraun, Games and Economic Behavior (2020), 121, pp. 453 - 481

We analyze the actual behavior of agents in a matching mechanism, using data from a clearinghouse at the Faculty of Business Administration and Economics at a German university, where a variant of the Boston mechanism is used. We supplement this data with data generated in a survey among the students who participated in the clearinghouse. We find that under the current mechanism over 74% of students act strategically by misrepresenting at least one of their preferences. Nevertheless, not all students are able to improve their outcome by doing so. We show that this is mainly due to the incomplete information of students and naiveté. Sophisticated students actually reach significantly better outcomes than naive students. Thus, we find evidence that naive students are exploited by sophisticated students in an incomplete information setting.

Determinants of nursing home choice: Does reported quality matter?

H. Schmitz, M.A. Stroka‐Wetsch, Health Economics (2020), 29(7), pp. 766-777


Early Disclosure of Invention and Reduced Duplication: An Empirical Test

S. Lück, B. Balsmeier, F. Seliger, L. Fleming, Management Science (2020), 66(6), pp. 2677-2685

<jats:p> Much work on innovation strategy assumes or theorizes that competition in innovation elicits duplication of research and that disclosure decreases such duplication. We validate this empirically using the American Inventors Protection Act (AIPA), three complementary identification strategies, and a new measure of blocked future patent applications. We show that AIPA—intended to reduce duplication, through default disclosure of patent applications 18 months after filing—reduced duplication in the U.S. and European patent systems. The blocking measure provides a clear and micro measure of technological competition that can be aggregated to facilitate the empirical investigation of innovation, firm strategy, and the positive and negative externalities of patenting. </jats:p><jats:p> This paper was accepted by Joshua Gans, business strategy. </jats:p>

Introduction to the Special Issue “Bargaining”

C. Haake, W. Trockel, Homo Oeconomicus (2020), 37(1-2), pp. 1-6


Location Choice and Quality Competition in Mixed Hospital Markets

B. Hehenkamp, O.M.. Kaarbøe, Journal of Economic Behavior & Organization (2020), 177, pp. 641-660

Many countries have opened their health care markets to private for-profit providers, aiming to promote quality and choice for patients. The prices are regulated and providers compete in location and quality. We show that whereas opening a public hospital market typically raises quality, the private provider strategically locates towards the corner of the market to avoid costly quality competition. Social welfare depends on the size of the regulator's budget and on the altruism of the public provider. If the budget is large, high quality results and welfare is highest in a duopoly whenever entry is optimal. If the budget is small, quality levels in a duopoly mirror the quality level in a monopoly. It can be optimal for the regulator not to use the full budget.

Trade and economic development: global causality and development- and openness-related heterogeneity

T. Gries, M. Redlin, International Economics and Economic Policy (2020), 17, pp. 923-944


Economic Retirement Age and Lifelong Learning - a theoretical model with heterogeneous labor and biased technical change

T. Gries, S. Jungblut, T. Krieger, H. Meyer, German Economic Review (2019), 20(2), pp. 129-170


Price competition and the Bertrand model: The paradox of the German mobile discount market

D. Kaimann, B. Hoyer, Applied Economics Letters (2019), 26(1), pp. 54-57

We investigate the degree of price competition among telecommunication firms. Underlying a Bertrand model of price competition, we empirically model pricing behaviour in an oligopoly. We analyse panel data of individual pricing information of mobile phone contracts offered between 2011 and 2017. We provide empirical evidence that price differences as well as reputational effects serve as a signal to buyers and significantly affect market demand. Additionally, we find that brands lead to an increase in demand and thus are able to generate spillover effects even after price increase.

The Common Enemy Effect under Strategic Network Formation and Disruption

B. Hoyer, H. Haller, Journal of Economic Behavior & Organization (2019), 162, pp. 146-163

Social psychology studies the "common enemy effect", the phenomenon that members of a group work together when they face an opponent, although they otherwise have little in common. An interesting scenario is the formation of an information network where group members individually sponsor costly links. Suppose that ceteris paribus, an outsider appears who aims to disrupt the information flow within the network by deleting some of the links. The question is how the group responds to this common enemy. We address this question for the homogeneous connections model of strategic network formation, with two-way flow of information and without information decay. For sufficiently low linkage costs, the external threat can lead to a more connected network, a positive common enemy effect. For very high but not prohibitively high linkage costs, the equilibrium network can be minimally connected and efficient in the absence of the external threat whereas it is always empty and ineffi cient in the presence of the external threat, a negative common enemy effect. For intermediate linkage costs, both connected networks and the empty network are Nash for certain cost ranges.

Network Formation and Disruption - An Experiment: Are equilibrium networks too complex?

A.E. Endres, S. Recker, B. Mir Djawadi, B. Hoyer, Journal of Economic Behavior and Organization (2019), 157, pp. 708-734

Models on network formation have often been extended to include the potential of network disruption in recent years. Whereas the theoretical research on network formation under the threat of disruption has thus gained prominence, hardly any experimental research exists so far. In this paper, we therefore experimentally study the emergence of networks including the aspect of a known external threat by relating theoretical predictions by Dzuibiński and Goyal (2013) to actual observed behaviour. We deal with the question if subjects in the role of a strategic Designer are able to form safe networks for least costs while facing a strategic Adversary who is going to attack their networks. Varying the costs for protecting nodes, we designed and tested two treatments with different predictions for the equilibrium network and investigated whether one of the least cost equilibrium networks was more likely to be reached. Furthermore, the influence of the subjects’ farsightedness on their decision-making process was elicited and analysed. We find that while subjects are able to build safe networks in both treatments, equilibrium networks are only built in one of the two treatments. In the other treatment, predominantly safe networks are built but they are not for least costs. Additionally, we find that farsightedness –as measured in our experiment– has no influence on whether subjects are able to build safe or least cost equilibrium networks. Two robustness settings with a reduced external threat or more liberties to modify the initial networks qualitatively confirm our results. Overall, in this experiment observed behaviour is only partially in line with the theoretical predictions by Dzuibiński and Goyal (2013).

Secular stagnation? Is there statistical evidence of an unprecedented, systematic decline in growth?

M. Fritz, T. Gries, Y. Feng, Economics Letters (2019), 181, pp. 47-50


Growth Trends and Systematic Patterns of Boom and Busts –Testing 200 Years of Business Cycle Dynamics

T. Gries, M. Fritz, F. Yuanhua, Oxford Bulletin of Economics and Statistics (2019), 81(1), pp. 62-78


A New Theory of Demand-Restricted Growth: The Basic Idea

T. Gries, The American Economist (2019), 056943451984647


The Role of Prices Relative to Supplemental Benefits and Service Quality in Health Plan Choice

C. Bünnings, H. Schmitz, H. Tauchmann, N.R. Ziebarth, Journal of Risk and Insurance (2019), 86(2), pp. 415-449


Heterogeneity in Marginal Non-Monetary Returns to Higher Education

D.A. Kamhöfer, H. Schmitz, M. Westphal, Journal of the European Economic Association (2019), 17(1), pp. 205-244


Pirates – The Young and the Jobless: The Effect of Youth Bulges and Youth Labor Market Integration on Maritime Piracy

T. Gries, M. Redlin, Defence and Peace Economics (2019), 30(3), pp. 309-323



Fertility and Modernization: The Role of Urbanization in Developing Countries

T. Gries, R. Grundmann, Journal of International Development (2018), 30(3), pp. 493-506


The Generalized Nash Bargaining Solution for Transfer Price Negotiations under Incomplete Information

C. Haake, S. Recker, Group Decision and Negotiation (2018), 27(6), pp. 905-932

In our model two divisions negotiate over type-dependent contracts to determine an intrafirm transfer price for an intermediate product. Since the upstream division's (seller's) costs and downstream division's (buyer's) revenues are supposed to be private information, we formally consider cooperative bargaining problems under incomplete information. This means that the two divisions consider allocations of expected utility generated by mechanisms that satisfy (interim) individual rationality, incentive compatibility and/or ex post efficiency. Assuming two possible types for buyer and seller each, we first establish that the bargaining problem is regular, regardless whether or not incentive and/or efficiency constraints are imposed. This allows us to apply the generalized Nash bargaining solution to determine fair transfer payments and transfer quantities. In particular, the generalized Nash bargaining solution tries to balance divisional profits, while incentive constraints are still in place. In that sense a fair profit division is generated. Furthermore, by means of illustrative examples we derive general properties of this solution for the transfer pricing problem and compare the model developed here with the models existing in the literature. We demonstrate that there is a tradeoff between ex post efficiency and fairness.

Determinants of Equilibrium Selection in Network Formation - An Experiment

B. Hoyer, S. Rosenkranz, Games (2018), 9(4), 89

Maintaining vs. Milking Good Reputation when Customer Feedback is Inaccurate

B. Mir Djawadi, R. Fahr, C. Haake, S. Recker, PLoS ONE (2018), 13(11), e0207172

In Internet transactions, customers and service providers often interact once and anonymously. To prevent deceptive behavior a reputation system is particularly important to reduce information asymmetries about the quality of the offered product or service. In this study we examine the effectiveness of a reputation system to reduce information asymmetries when customers may make mistakes in judging the provided service quality. In our model, a service provider makes strategic quality choices and short-lived customers are asked to evaluate the observed quality by providing ratings to a reputation system. The customer is not able to always evaluate the service quality correctly and possibly submits an erroneous rating according to a predefined probability. Considering reputation profiles of the last three sales, within the theoretical model we derive that the service provider’s dichotomous quality decisions are independent of the reputation profile and depend only on the probabilities of receiving positive and negative ratings when providing low or high quality. Thus, a service provider optimally either maintains a good reputation or completely refrains from any reputation building process. However, when mapping our theoretical model to an experimental design we find that a significant share of subjects in the role of the service provider deviates from optimal behavior and chooses actions which are conditional on the current reputation profile. With respect to these individual quality choices we see that subjects use milking strategies which means that they exploit a good reputation. In particular, if the sales price is high, low quality is delivered until the price drops below a certain threshold, and then high quality is chosen until the price increases again.

Preemptive Repression: Deterrence, Backfiring, Iron Fists and Velvet Gloves

K. De Jaegher, B. Hoyer, Journal of Conflict Resolution (2018), 63(2), pp. 502--527

We present a game-theoretic model of the repression–dissent nexus, focusing on preemptive repression. A small group of instigating dissidents triggers a protest if each dissident participates. The dissidents face random checks by security forces, and when an individual dissident is caught while preparing to participate, he or she is prevented from doing so. Each dissident can invest in countermeasures, which make checks ineffective. For large benefits of protest, higher preemptive repression in the form of a higher number of checks has a deterrence effect and makes dissidents less prone to invest in countermeasures, decreasing the probability of protest. For small benefits of protest, higher preemptive repression instead has a backfiring effect. Both myopic and farsighted governments avoid the backfiring effect by setting low levels of preemptive repression (velvet-glove strategy). However, only a farsighted government is able to exploit the deterrence effect by maintaining a high level of preemptive repression (iron-fist strategy).

New Evidence on Employment Effects of Informal Care Provision in Europe

I.W. Kolodziej, A.R. Reichert, H. Schmitz, Health services research (2018), 53(4)


Human-induced climate change: the impact of land-use change

T. Gries, M. Redlin, J.E. Ugarte, Theoretical and Applied Climatology (2018)


Machine learning and natural language processing on the patent corpus: Data, tools, and new measures

B. Balsmeier, M. Assaf, T. Chesebro, G. Fierro, K. Johnson, S. Johnson, G. Li, S. Lück, D. O'Reagan, B. Yeh, G. Zang, L. Fleming, Journal of Economics &amp; Management Strategy (2018), 27(3), pp. 535-553

Drawing upon recent advances in machine learning and natural language processing, we introduce new tools that automatically ingest, parse, disambiguate, and build an updated database using U.S. patent data. The tools identify unique inventor, assignee, and location entities mentioned on each granted U.S. patent from 1976 to 2016. We describe data flow, algorithms, user interfaces, descriptive statistics, and a novelty measure based on the first appearance of a word in the patent corpus. We illustrate an automated coinventor network mapping tool and visualize trends in patenting over the last 40 years.


Slow Booms and Deep Busts: 160 Years of Business Cycles in Spain

T. Gries, M. Fritz, Y. Feng, Review of Economics (2017), 68 (2), pp. 153-166


Sick already? Job loss makes it even worse

H. Schmitz, V. Schiele, Atlas of Science (2017)

The effects of competition on medical service provision

J. Brosig-Koch, B. Hehenkamp, J. Kokot, Health Economics (2017), 26(53), pp. 6-20

We explore how competition between physicians affects medical service provision. Previous research has shown that, without competition, physicians deviate from patient‐optimal treatment under payment systems like capitation and fee‐for‐service. Although competition might reduce these distortions, physicians usually interact with each other repeatedly over time and only a fraction of patients switches providers at all. Both patterns might prevent competition to work in the desired direction. To analyze the behavioral effects of competition, we develop a theoretical benchmark that is then tested in a controlled laboratory experiment. Experimental conditions vary physician payment and patient characteristics. Real patients benefit from provision decisions made in the experiment. Our results reveal that, in line with the theoretical prediction, introducing competition can reduce overprovision and underprovision, respectively. The observed effects depend on patient characteristics and the payment system, though. Tacit collusion is observed and particularly pronounced with fee‐for‐service payment, but it appears to be less frequent than in related experimental research on price competition.

Innovations, growth and participation in advanced economies - a review of major concepts and findings

T. Gries, R. Grundmann, I. Palnau, M. Redlin, International Economics and Economic Policy (2017), 14(2), pp. 293-351


Does Price Framing Affect the Consumer Price Sensitivity of Health Plan Choice?

H. Schmitz, N.R. Ziebarth, Journal of Human Resources (2017), 52(1), pp. 88-127


Informal Care and Long-term Labor Market Outcomes

H. Schmitz, M. Westphal, Journal of Health Economics (2017), 56, pp. 1-18


On the interdependence of ambulatory and hospital care in the German health system

T. Büyükdurmus, T. Kopetsch, H. Schmitz, H. Tauchmann, Health Economics Review (2017), 7(2)


Technology diffusion, international integration and participation in developing economies - a review of major concepts and findings

T. Gries, R. Grundmann, I. Palnau, M. Redlin, International Economics and Economic Policy (2017), 15(1), pp. 215-253



Towards an Economic Theory of Destabilization War

T. Gries, C. Haake, Peace Economics, Peace Science and Public Policy (2016), 22(4), pp. 377 - 384


Sustainability of coalitional equilibria within repeated tax competition

S. Brangewitz, S. Brockhoff, European Journal of Political Economy (2016), 49, pp. 1-23


Explaining inter-provincial migration in China

T. Gries, M.. Kraft, M. Simon, Papers in Regional Science (2016), 4(95), pp. 709-731


Towards an Economic Theory of Destabilization War

T. Gries, C. Haake, Peace Economics and Peace Science (2016), 22(4), pp. 377-384


The Entrepreneurship Beveridge Curve

T. Gries, S. Jungblut, W. Naudé, International Journal of Economic Theory (2016), 12(2), pp. 151-165


Reanalyzing Zero Returns to Education in Germany

D.A. Kamhöfer, H. Schmitz, Journal of Applied Econometrics (2016), 31(5), pp. 912-919


Competition of Intermediaries in a Differentiated Duopoly

S. Brangewitz, J. Manegold, Theoretical Economics Letters (2016), 6(6), pp. 1341-1362

On an intermediate goods market with asymmetric production technologies as well as vertical and horizontal product differentiation we analyze the influence of simultaneous competition for resources and customers. The intermediaries face either price or quantity competition on the output market and a monopolistic, strategically acting supplier on the input market. We find that there exist quality and productivity differences such that for quantity competition only one intermediary is willing to procure inputs from the input supplier, while for price competition both intermediaries are willing to purchase inputs. Moreover, the well-known welfare advantage of price competition can in general be no longer confirmed in our model with an endogenous input market and asymmetric intermediaries.

Strategic Network Disruption and Defense

B. Hoyer, K. De Jaegher, Journal of Public Economic Theory (2016), 18(5), pp. 802-830

We study a game between a network designer, who uses costly links to connect nodes in a network, and a network disruptor who tries to disrupt the resulting network as much as possible by deleting either nodes or links. For low linking costs networks with all nodes in symmetric positions are a best response of the designer under both link deletion and node deletion. For high linking costs the designer builds a star network under link deletion, but for node deletion excludes some nodes from the network to build a smaller but stronger network. For intermediate linking costs the designer again builds a symmetric network under node deletion but a star‐like network with weak spots under link deletion.

By-product mutualism and the ambiguous effects of harsher environments – A game-theoretic model

K. De Jaegher, B. Hoyer, Journal of Theoretical Biology (2016), 393, pp. 82-97

We construct two-player two-strategy game-theoretic models of by-product mutualism, where our focus lies on the way in which the probability of cooperation among players is affected by the degree of adversity facing the players. In our first model, cooperation consists of the production of a public good, and adversity is linked to the degree of complementarity of the players׳ efforts in producing the public good. In our second model, cooperation consists of the defense of a public, and/or a private good with by-product benefits, and adversity is measured by the number of random attacks (e.g., by a predator) facing the players. In both of these models, our analysis confirms the existence of the so-called boomerang effect, which states that in a harsh environment, the individual player has few incentives to unilaterally defect in a situation of joint cooperation. Focusing on such an effect in isolation leads to the "common-enemy" hypothesis that a larger degree of adversity increases the probability of cooperation. Yet, we also find that a sucker effect may simultaneously exist, which says that in a harsh environment, the individual player has few incentives to unilaterally cooperate in a situation of joint defection. Looked at in isolation, the sucker effect leads to the competing hypothesis that a larger degree of adversity decreases the probability of cooperation. Our analysis predicts circumstances in which the "common enemy" hypothesis prevails, and circumstances in which the competing hypothesis prevails.

Quantile treatment effects of job loss on health

V. Schiele, H. Schmitz, Journal of Health Economics (2016), 49, pp. 59-69


Public reporting and the quality of care of German nursing homes

A. Herr, T. Nguyen, H. Schmitz, Health Policy (2016), 120(10), pp. 1162-1170


Determinants of regional variation in health expenditures in Germany

D. Göpffarth, T. Kopetsch, H. Schmitz, Health economics (2016), 25(7), pp. 801-815


Health shocks and risk aversion

S. Decker, H. Schmitz, Journal of Health Economics (2016), 156-170, pp. 156-170



Playing the Lottery or Dressing Up? A Model of Firm-Level Heterogeneity and the Decision to Export

T. Gries, W. Naudé, N. Bilkic, The Quarterly Review of Economics and Finance (2015), 58, pp. 1-17


Changes of China’s agri-food exports to Germany caused by its accession to WTO and the 2008 financial crisis

T. Gries, Y. Feng, Z. Guo, China Agricultural Economic Review (2015), 7(2), pp. 262-279


Sustaining Civil Peace: a configurational comparative analysis

T. Gries, I. Palnau, Peace Economics, Peace Science and Public Policy (2015), 21( 4), pp. 467 -478


Oppressive Governments, Dependence on the United States and Anti-American Terrorism

T. Gries, D. Meierrieks, M. Redlin, Oxford Economic Papers (2015), 67(1), pp. 83 - 103


Robust Equilibria in Location Games

B. Buechel, N. Röhl, European Journal of Operational Research (2015), 240(2), pp. 505-517

In the framework of spatial competition, two or more players strategically choose a locationin order to attract consumers. It is assumed standardly that consumers with the same favorite location fully agree on the ranking of all possible locations. To investigate the necessity of this questionable and restrictive assumption, we model heterogeneity in consumers’ distance perceptions by individual edge lengths of a given graph. A profile of location choices is called a “robust equilibrium” if it is a Nash equilibrium in several games which differ only by the consumers’ perceptions of distances. For a finite number of players and any distribution of consumers, we provide a full characterization of all robust equilibria and derive structural conditions for their existence. Furthermore, we discuss whether the classical observations of minimal differentiation and inefficiency are robust phenomena. Thereby, we find strong support for an old conjecture that in equilibrium firms form local clusters.

Rationalisierung vs. Rationierung Ist die Rationierung unvermeidbar?

H. Schmitz, Patient Gesundheitswesen – Mission 2030 Unsere gemeinsame Verantwortung die Zukunft zu gestalten (2015)

Short-and medium-term effects of informal care provision on female caregivers’ health

H. Schmitz, M. Westphal, Journal of Health Economics (2015), 42, pp. 174-185



Competitive outcomes and the inner core of NTU market games

S. Brangewitz, J. Gamp, Economic Theory (2014), 57(3), pp. 529-554


Trade and fertility in the developing world: the impact of trade and trade structure

T. Gries, R. Grundmann, Journal of Population Economics (2014), 27(4), pp. 1165-1186


Household Savings and Productive Capital Formation in Rural Vietnam: Insurance vs. Social Network

T. Gries, H.V. Dung, Modern Economy (2014), 5, pp. 878-894


Too Much of a Good Thing? Welfare Consequences of Market Transparency

Y. Gu, B. Hehenkamp, Journal of Institutional and Theoretical Economics JITE (2014), 170(2), pp. 225-248

This paper studies welfare consequences of consumer-side market transparency with endogenous entry of firms. Different from most studies, we consider the unique symmetric entry equilibrium, which is in mixed strategies. We identify two effects of market transparency on welfare: a competition effect and a novel market-structure effect. We show, surprisingly, that for almost all demand functions the negative market-structure effect eventually dominates the positive competition effect as the market becomes increasingly transparent. Consumer-side market transparency can therefore be socially excessive even without collusion. The only exception among commonly used demand functions is the set of constant demand functions.

Collective action and the common enemy effect

K. De Jaegher, B. Hoyer, Defence and Peace Economics (2014), 27(5), pp. 644-664

How is collective defence by players affected when they face a threat from an intelligent attacker rather than a natural threat? This paper analyses this question using a game-theoretic model. Facing an intelligent attacker has an effect if players move first and visibly set their defence strategies, thereby exposing any players who do not defend, and if the attacker is, moreover, not able to commit to a random attack. Depending on the parameters of the game, the presence of an intelligent attacker either increases the probability that players jointly defend (where such joint defence either does or does not constitute a utilitarian optimum), or decreases the probability that players jointly defend (even though joint defence is a utilitarian optimum).

Kehrtwende in der Gesundheitspolitik - Unnötige Abkehr von einer erfolgreichen Reform zur Finanzierung der gesetzlichen Krankenversicherung

H. Schmitz, B. Augurzky, U. Roppel, RWI Position (2014), 59

Testing the relationship between income inequality and life expectancy: A simple correction for the aggregation effect when using aggregated data

T. Mayrhofer, H. Schmitz, Journal of Population Economics (2014), 27(3), pp. 841-856


Broke, ill, and obese: is there an effect of household debt on health?

M. Keese, H. Schmitz, Review of Income and Wealth (2014), 60(3), pp. 525-541


Regional variation in the utilisation of ambulatory services in Germany

T. Kopetsch, H. Schmitz, Health Economics (2014), 23(12), pp. 1481-1492


Forschung und Lehre: Freund oder Feind?

S. Lück, Die Betriebswirtschaft (2014), 74(5), pp. 269-282

A Crook is a Crook … But is He Still a Crook Abroad? On the Effect of Immigration on Destination-Country Corruption

E. Dimant, T. Krieger, M. Redlin, German Economic Review (2014), 16(4), pp. 464-489


Oppressive governments, dependence on the USA, and anti-American terrorism

T. Gries, D. Meierrieks, M. Redlin, Oxford Economic Papers (2014), 67(1), pp. 83-103



Asymmetric Nash bargaining solutions and competitive payoffs

S. Brangewitz, J. Gamp, Economics Letters (2013), 121(2), pp. 224-227


Unsustainable Sovereign Debt - Is the Euro Crisis only the Tip of the Iceberg?

T. Gries, N. Bilkic, B. Carerras Painter, International Economics and Economic Policy (2013), 10(1), pp. 1 - 45


Global Asymmetries and their Implications for Climate and Industrial Policies, in: Pathways to Industrialization in the Twenty-First Century - New Challenges and Emerging Paradigms

T. Gries, Oxford University Press (2013), ch. 11, pp. 293-323


Do banking crises cause terrorism?

T. Gries, D. Meierrieks, Economics Letters (2013), 119(3), pp. 321-324


Causality Between Terrorism and Economic Growth

T. Gries, D. Meierrieks, Journal of Peace Research (2013), 50(1), pp. 91 - 104


Practice budgets and the patient mix of physicians-Evaluating the effects of remuneration system reforms on physician behaviour in Germany

H. Schmitz, Journal of Health Economics (2013), 32(6), pp. 1240-1249


What accounts for the regional differences in the utilisation of hospitals in Germany?

B. Augurzky, T. Kopetsch, H. Schmitz, The European Journal of Health Economics (2013), 14(4), pp. 615-627


Health and the double burden of full-time work and informal care provision—Evidence from administrative data

H. Schmitz, M.A. Stroka, Labour Economics (2013), 24, pp. 305-322



Negotiating Transfer Prices

C. Haake, J.T. Martini, Group Decision and Negotiation (2012), 22(4), pp. 657-680


On the institutional design of burden sharing when financing external border enforcement in the EU

C. Haake, T. Krieger, S. Minter, International Economics and Economic Policy (2012), 10(4), pp. 583-612


Stay in school or start working?- The human capital investment decision under uncertainty and irreversibility

T. Gries, N.. Bilkic, M. Pilichowski, Labour Economics (2012), 19(5), pp. 706 - 717


Economic performance and terrorist activity in Latin America

T. Gries, D. Meierrieks, Defence and Peace Economics (2012), 23(5), pp. 447 - 470


A Tax Paradox for Investment Decisions under Uncertainty

T. Gries, U. Prior, C. Sureth, Journal of Public Economics Theory (2012), 14(3), pp. 521 - 545


Regionale Unterschiede in der stationären Versorgung: Das ländliche Krankenhaus im Fokus

H. Schmitz, B. Augurzky, A. Beivers, Krankenhaus-Report 2012 (2012)

More health care utilization with more insurance coverage? Evidence from a latent class model with German data

H. Schmitz, Applied Economics (2012), 44(34), pp. 4455-4468


Zufriedenheit der Studierenden mit den Serviceeinrichtungen einer Universität: Ergebnisse einer explorativen multivariaten Analyse

M. Blum, M. Kraft, S. Lück, Hochschulmanagement (2012), 7(2), pp. 34-41


Proportionality and the power of unequal parties

D. Dimitrov, C. Haake, International Journal of Economic Theory (2011), 7(2), pp. 189-200

In this paper we introduce the concept of an overall power function that is meant to combine two sources of a party’s power in a parliament. The first source is based on the possibilities for the party to be part of a majority coalition and it is typically modeled using a cooperative simple game. The second source takes into account parties’ asymmetries outside the cooperative game and it is displayed by a vector of exogenously given weights. We adopt a normative point of view and provide an axiomatic characterization of a specific overall power function, in which the weights enter in a proportional fashion.

Entrepreneurship and human development - A capability approach

T. Gries, W. Naudé, Journal of Public Economics (2011), 95(3-4), pp. 216 - 224


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Price Regulation, Quality Competition and Location Choice with Costly Relocation

B. Hehenkamp, O.M. Kaarbøe, 2023

We consider a model where for-profit providers compete in quality in a price-regulated market that has been opened to competition, and where the incumbent is located at the center of the market, facing high costs of relocation. The model is relevant in markets such as public health care, education and schooling, or postal services. We find that, when the regulated price is low or intermediate, the entrant strategically locates towards the corner of the market to keep the incumbent at the low monopoly quality level. For a high price, the entrant locates at the corner of the market and both providers implement higher quality compared to a monopoly. In any case, the entrant implements higher quality than the incumbent provider. Social welfare is always higher in a duopoly if the cost of quality is low. For higher cost levels welfare is non-monotonic in the price and it can be optimal to the regulator not to use its entire budget. Therefore, the welfare effect of entry depends on the price and the size of the entry cost, and the regulator should condition the decision to allow entry on an assessment of the entry cost.


Distortion through modeling asymmetric bargaining power

C. Haake, T. Streck, 2022, pp. 17

We study the consequences of modeling asymmetric bargaining power in two-person bargaining problems. Comparing application of an asymmetric version of a bargaining solution to an upfront modification of the disagreement point, the resulting distortion crucially depends on the bargaining solution concept. While for the Kalai-Smorodinsky solution weaker players benefit from modifying the disagreement point, the situation is reversed for the Nash bargaining solution. There, weaker players are better off in the asymmetric bargaining solution. When comparing application of the asymmetric versions of the Nash and the Kalai-Smorodinsky solutions, we demonstrate that there is an upper bound for the weight of a player, so that she is better off with the Nash bargaining solution. This threshold is ultimately determined by the relative utilitarian bargaining solution. From a mechanism design perspective, our results provide valuable information for a social planner, when implementing a bargaining solution for unequally powerful players.

Playing games with QCA: Measuring the explanatory power of single conditions with the Banzhaf index

C. Haake, M. Schneider, 2022

Qualitative comparative analysis (QCA) enables researchers in international management to better understand how the impact of a single explanatory factor depends on the context of other factors. But the analytical tool box of QCA does not include a parameter for the explanatory power of a single explanatory factor or condition . In this paper, we therefore reinterpret the Banzhaf power index, originally developed in cooperative game theory, to establish as a goodness-of-fit parameter in QCA. The relative Banzhaf index we suggest measures the explanatory power of one condition averaged across all sufficient combinations of conditions. The paper argues that the index is especially informative in three situations that are all salient in international management, namely substantial limited diversity in the data, the emergence of strong INUS conditions in the analysis, and theorizing with contingency factors. The paper derives the properties of the relative Banzhaf index in the QCA context, demonstrates how the index can be computed easily from a rudimentary truth table, and explores its insights by revisiting selected papers in international management that apply fuzzy-set QCA. The discussion section offers routes for exploring further how the relative Banzhaf and other power indexes can be applied in QCA.

The Impact of Product Differentiation on Retail Bundling in a Vertical Market

A.E. Endres-Fröhlich, B. Hehenkamp, J. Heinzel, 2022

We study the effects of product differentiation on the bundling incentives of a two-product retailer. Two monopolistic manufacturers each produce a differentiated good. One sells it to both retailers, while the other only supplies a single retailer. Retailers compete in prices. Retail bundling is profitable when the goods are close substitutes. Only then is competition so intense that the retailer uses bundling to relax competition both within and across product markets, despite an aggravation of the double marginalization problem. Our asymmetric market structure arises endogenously for the case of close substitutes. In this case, bundling reduces social welfare.


Credence Goods Markets with Heterogeneous Experts

J.M.J. Heinzel, CIE Working Paper Series, 2019

In this paper, we analyze a credence goods model adjusted to the health care market with regulated prices and heterogeneous experts. Experts are physicians and are assumed to differ in their cost of treating a small problem. We investigate the effects of this heterogeneity on the physicians’ level of fraud and on the patients’ search for second opinions. We find that introducing a fraction of more efficient low-cost physicians always increases social welfare, but in some cases only because of the raised physicians’ surplus. When the low-cost physicians’ cost advantage is small, imposing a share of low-cost physicians does not change the equilibrium fraud level. When the cost advantage is large, however, different changes in the fraud level occur depending on the share of generated low-cost physicians, the search rate and the initial level of fraud.

Credence Goods Markets with Fair and Opportunistic Experts

J.M.J. Heinzel, CIE Working Paper Series, 2019

We analyze a credence goods market adapted to a health care market with regulated prices, where physicians are heterogeneous regarding their fairness concerns. The opportunistic physicians only consider monetary incentives while the fair physicians, in addition to a monetary payoff, gain an non-monetary utility from being honest towards patients. We investigate how this heterogeneity affects the physicians’ equilibrium level of overcharging and the patients’ search for second opinions (which determines overall welfare). The impact of the heterogeneity on the fraud level is ambiguous and depends on several factors such as the size of the fairness utility, the share of fair physicians, the search level and the initial fraud level. Introducing heterogeneity does not affect the fraud or the search level when the share of fair physicians is small. However, when social welfare is not at its maximum, social welfare always increases if we introduce a sufficiently large share of fair physicians.

The Decomposability of the Nash Bargaining Solution in Labor Markets

C. Haake, T. Upmann, P. Duman, CIE Working Paper Series, Paderborn University, 2019

In this paper, we analyze the two-dimensional Nash bargaining solution (NBS) deploying a standard labor market negotiations model (see McDonald and Solow, 1981; Creedy and McDonald, 1991). We show that the two-dimensional bargaining problem can be decomposed into two one-dimensional problems such that the (Cartesian) product of the solutions of these problems replicates the solution of the two-dimensional problem, if the NBS is applied. However, this decomposition fails for any solution concept that does not satisfy the axiom of Independence of Irrelevant Alternatives (IIA axiom). Our decomposition result has significant implications for actual negotiations, as it allows for the decomposition of a multi-issue bargaining problem into a set of simpler problems, in particular a set of single-issue bargaining problems. In this way, the decomposition may help facilitate negotiations in labor markets and also in other environments.

Duality for General TU-games Redefined

F. Aslan, P. Duman, W. Trockel, CIE Working Paper Series, Paderborn University, 2019

We criticize some conceptual weaknesses in the recent literature on coalitional TUgames and propose, based on our critics, a new definition of dual TU-games that coincides with the one in the literature on the class of super-additive games. We justify our new definition in four alternative ways: 1. Via an adequate definition of ecient payo vectors. 2. Via a modification of the Bondareva-Shapley duality. 3. Via an explicit consideration of \coalition building". 4. Via associating general TU-games to coalition-production economies. Rather than imputations, we base our analysis on a modification of aspirations.

Bundling in a Distribution Channel with Retail Competition

J.M.J. Heinzel, CIE Working Paper Series, 2019

We analyze the incentives for retail bundling and the welfare effects of retail bundling in a decentralized distribution channel with two retailers and two monopolistic manufacturers. One manufacturer exclusively sells his good to one retailer, whereas the other manufacturer sells his good to both retailers. Thus, one retailer is a monopolist for one product but competes with the other retailer in the second product market. The two-product retailer has the option to bundle his goods or to sell them separately. We find that bundling aggravates the double marginalization problem for the bundling retailer. Nevertheless, when the retailers compete in prices, bundling can be more profitable than separate selling for the retailer as bundling softens the retail competition. The ultimate outcome depends on the manufacturers’ marginal costs. Given retail quantity competition, however, bundling is in no case the retailer’s best strategy. Furthermore, we show that profitable bundling reduces consumer and producer surplus in the equilibrium.


Feedback Pareto weights in cooperative NTU differential games

S. Hoof, CIE Working Paper Series, Paderborn University, 2018

This note deals with agreeability in nontransferable utility (NTU) differential games. We introduce state feedback Pareto weights to enrich the set of efficient cooperative solutions. The framework is particularly useful if constant weights fail to support agreeability, but cooperation is desired nonetheless. The concept is applied to an adverting differential game.

On unification of solutions to the bargaining problem

C. Haake, C. Qin, CIE Working Paper Series, Paderborn University, 2018

We establish axioms under which a bargaining solution can be found by the maximization of the CES function and is unique up to specification of the distribution and elasticity parameters. This solution is referred to as the CES solution which includes the NASH and egalitarian solutions as special cases. Next, we consider a normalization of the CES function and establish axioms, under which a bargaining solution can be found by the maximization of the normalized CES and is unique up to the specifications of the distribution and its substitution parameters. We refer to this solution as the normalized CES solution, which includes the Nash and Kalai-Smorodinsky solutions as special cases. Our paper contributes to bargaining theory by establishing unified characterizations of existing as well as a great variety of new bargaining solutions.

Thoughts on Social Design

W. Trockel, C. Haake, in: Studies in Economic Design, Springer, 2018

One of the fundamental problems in applications of methods and results from mechanism design and implementation theory is the effective enforcement of theoretically established equilibria by which social choice rules are implemented. Hurwicz (2008) and Myerson (2009) introduce different concepts of formalizing enforcement of institutional rules via the introduction of legal and illegal games. In this note the relation of their concepts with that of a social system defined inDebreu (1952) is analyzed and its potential of being instrumental for modelling institution design is discussed. The existence proof for such a system, also known as generalized game or abstract economy had been the basis for the existence proof of a competitive equilibrium of an economy.

The Influence of Bribery and Relative Reciprocity on a Physician's Prescription Decision - An Experiment

V. Hilleringmann, CIE Working Paper Series, 2018

Focusing on a physician's relationship to a briber and a patient, this experiment analyzes the influence of a bribe on a physician's treatment decision. We conduct a partner treatment, in which briber and physician play together for the whole experiment and a stranger treament, where briber and physician are re-matched every period. With the help of the two treatments, we vary the relative reciprocity between the physician and the two other actors, briber and patient. Additionally we use a follow up questionnaire to measure the behavioral motivation of the participants. We find that reciprocity leads to bribery relationships: In the partner treatment physicians act corruptly more often. Just the variation of the relative reciprocity between the treatments shows differences in the behavior of the subjects. Differences in the participants' preferences deliver no explanation for their behavior in our experiment.

A Note on Manipulability in School Choice with Reciprocal Preferences

C. Haake, N. Stroh-Maraun, CIE Working Paper Series, Paderborn University, 2018

We show that the Boston school choice mechanism (BM), the student proposing deferred acceptance algorithm (DA) and the top trading cycles algorithm (TTC) generate the same outcome when the colleges’ priorities are modified according to students’ preferences in a “first preferences first” manner. This outcome coincides with the BM outcome under original priorities. As a result, the DA and TTC mechanism that are non-manipulable under original priorities become vulnerable to strategic behavior.

Does Informational Equivalence Preserve Strategic Behavior? An Experimental Study on Trockel's Game

P. Duman, CIE Working Paper Series, Paderborn University, 2018

The purpose of the present study is to experimentally test a version of the classical Chain Store Game (CSG) paradox, proposed by Trockel (1986), and determine whether one of the two theories of Induction and Deterrence, which were originally tested competitively by Selten (1978), may better account for the results. With complete and perfect information, the CSG of Selten (1978) was designed to analyze the role of reputation in repeated market interactions. Its results were discussed in two different ways: one is based on backward induction, and the other is intuitively derived from a deterrence argument. As the two explanations are incompatible, alternative models have been proposed to understand them better. The alternative game proposed by Trockel is an imperfect information version of the CSG in which the order of the two players is changed in each round and the ’Out-Aggressive’ equilibrium is used to build reputation. The existence of more than one equilibrium is the basis for the building of reputation. To the best of my knowledge, this study is the first attempt to experimentally test this alternative game with the same purpose.


Preis, Service oder Leistungen: Was beeinflusst besonders die Krankenkassenwahl von gesetzlich Versicherten?

H. Schmitz, in: Krankenversicherung im Rating, Springer Fachmedien Wiesbaden GmbH, 2017

Location Choice and Quality Competition in Mixed Hospital Markets

B. Hehenkamp, O. Kaarboe, Universität Paderborn, 2017

Evolutionary Equilibrium in Stochastic Contests - Entry, Effort, and Overdissipation

Y. Gu, B. Hehenkamp, W. Leininger, Universität Paderborn, 2017

Matching Strategies of Heterogeneous Agents under Incomplete Information in a University Clearinghouse

B. Hoyer, N. Stroh-Maraun, CIE Working Paper Series, Paderborn University, 2017

In actual school choice applications the theoretical underpinnings of the Boston School Choice Mechanism (BM) (complete information and rationality of the agents) are often not given. We analyze the actual behavior of agents in such a matching mechanism, using data from the matching mechanism currently used in a clearinghouse at a faculty of Business Administration and Economics at a German university, where a variant of the BM is used, and supplement this data with data generated in a survey among students who participated in the clearinghouse. We find that under the current mechanism over 70% of students act strategically. Controlling for students' limited information, we find that they do act rationally in their decision to act strategically. While students thus seem to react to the incentives to act strategically under the BM, they do not seem to be able to use this to their own advantage. However, those students acting in line with their beliefs manage a significantly better personal outcome than those who do not. We also run simulations by using a variant of the deferred acceptance algorithm, adapted to our situation, to show that the use of a different algorithm may be to the students' advantage.


Stackelberg Competition among Intermediaries in a Differentiated Duopoly with Product Innovation

J. Manegold, CIE Working Paper Series, Paderborn University, 2016

On an intermediate goods market we consider vertical and horizontal product differentiation and analyze the impact of simultaneous competition for resources and the demand of customers on the market outcome. Asymmetries between intermediaries may arise due to distinct product qualities as well as by reasons of different production technologies. The intermediaries compete on the output market by choosing production quantities sequentially and for the supplies of a monopolistic input supplier on the input market. It turns out that there exist differences in product quality and productivities such that an intermediary being the Stackelberg leader has no incentive to procure inputs, whereas in the role of the Stackelberg follower will participate in the market. Moreover, we find that given an intermediary is more competitive, his equilibrium output quantity is higher when being the leader than when being the follower. Interestingly, if the intermediary is less competitive and goods are complements, there may exist asymmetries such that an intermediary being in the position of the Stackelberg follower offers higher output quantities in equilibrium than when being in the position of the Stackelberg leader.

Do talented women shy away from competition?

B. Hoyer, T. van Huizen, L. Keijzer, T. Rezai Khavas, S. Rosenkranz, 2016

We study the willingness to compete in a cognitive task among an entire cohort of fresh man business and economics students. Combining data from a lab-in-thefield experiment with university admissions data, we trace the gender gap in competitiveness at different levels of high school performance. Our results confirm that, on average, men choose to compete more often. The gender gap disappears, however, among students with above average high school performance. Female high school top performers are equally competitive as their male counterparts. In fact, the overall gender gap is entirely driven by the group of female high school underperformers who shied away from competition, even when they performed well in our task. Overall, our findings suggest that high school grades are more than just a signal of cognitive abilities, because they seem to influence the receivers selfperception of his or her performance in a competitive environment involved in later on in life.

An Economic Theory of 'Destabilization War'

T. Gries, C. Haake, 2016

While Islamic State is the most present example, it is a fact that in many places around the globe, throughout history initially small groups have tried to challenge and destabilize or even overthrow governments by means of terrorist and guerrilla strategies. Therefore, we answer two questions. Why does a small group of insurgents believe it can overthrow the government by turning violent, even if the government is clearly superior? And how does a conflict develop into terrorism, a guerilla war, or a major conventional civil war, or is resolved peacefully? We develop a formal model for rebels and government and derive optimal choices. Further, we focus on three elements as important ingredients of a "destabilization war". All three of these - large random events, time preference (which we relate to ideology), and choice of duration of fight - are rarely considered in formal conflict theory. We can answer the above two questions using game theory analysis. First, insurgents rise up because they hope to destabilize through permanent challenging attacks. In this context, large randomness is an important ally of rebels. While each individual attack may have a low impact, at some point a large random event could lead to success. Hence, the duration of activities is a constitutive element of this kind of armed conflict. Patience (low time preference), which may reflect rebels' degree of ideological motivation, is crucial. Second, the mode of warfare or the conflict resolutions that develop are generally path-dependent and conditioned on the full set of options (including compromise). Various conditions (level of funding, ease of recruitment, access to weapons) influence different modes of warfare or a peaceful compromise in a complex way.


Strategic Formation of Customer Relationship Networks

S. Brangewitz, C. Haake, P. Möhlmeier, Universität Paderborn, 2015

We analyze the stability of networks when two intermediaries strategically form costly links to customers. We interpret these links as customer relationships that enable trade to sell a product. Equilibrium prices and equilibrium quantities on the output as well as on the input market are determined endogenously for a given network of customer relationships. We investigate in how far the substitutability of the intermediaries' products and the costs of link formation influence the intermediaries' equilibrium profits and thus have an impact on the incentives to strategically form relationships to customers. For networks with three customers we characterize locally stable networks, in particular existence is guaranteed for any degree of substitutability. Moreover for the special cases of perfect complements, independent products and perfect substitutes, local stability coincides with the stronger concept of Nash stability. Additionally, for networks with n customers we analyze stability regions for selected networks and determine their limits when n goes to infinity. It turns out that the shape of the stability regions for those networks does not significantly change compared to a setting with a small number of customers.


Low Carbon Economics - Theory and application

T. Gries, in: Low Carbon Economics , 2014, pp. 361 - 382

Maritime Piracy: Socio-Economic, Political, and Institutional Determinants

T. Gries, M. Redlin, Paderborn University, CIE Center for International Economics, 2014


A crook is a crook ... but is he still a crook abroad? On the effect of immigration on destination-country corruption

E. Dimant, T.. Krieger, M. Redlin, Wilfried-Guth-Stiftungsprofessur für Ordnungs- und Wettbewerbspolitik, Universität Freiburg, 2013

Cooperative Transfer Price Negotiations under Incomplete Information

S. Brangewitz, C. Haake, CIE Working Paper Series, Paderborn University, 2013

In this paper, we analyze a model in which two divisions negotiate over an intrafirm transfer price for an intermediate product. Formally, we consider bargaining problems under incomplete information, since the upstream division’s (seller's) costs and downstream division's (buyer's) revenues are supposed to be private information. Assuming two possible types for buyer and seller each, we first establish that the bargaining problem is regular, regardless whether incentive and/or efficiency constraints are imposed. This allows us to apply the generalized Nash bargaining solution to determine transfer payments and transfer probabilities. Furthermore, we derive general properties of this solution for the transfer pricing problem and compare the model developed here with the existing literature for negotiated transfer pricing under incomplete information. In particular, we focus on the models presented in Wagenhofer (1994).


Poverty in Shenzhen

T. Gries, J. Xue, in: Rising China in the Changing World Economy, 2012, pp. 396 - 412

Network Disruption and the Common Enemy Effect

B. Hoyer, K. De Jaegher, 2012

The phenomenon that groups or people work together when they face an opponent, although they have little in common otherwise, has been termed the "common enemy effect". We study a model of network formation, where players can use links to build a network, knowing that they are facing a common enemy who can disrupt the links within the network, and whose goal it is to minimize the sum of the benefits of the network. We find that introducing a common enemy can lead to the formation of stable and efficient networks as well as fragmented networks and the empty network.

Add-On Premiums Increase Price Transparency: More Policy Holders Switch Health Plans

H. Schmitz, P. Eibich, N. Ziebarth, in: DIW Economic Bulletin, 2nd ed., German Institute for Economic Research, 2012, pp. 15-24


Internationale Umweltpolitik bei akkumulierender und asymmetrischer Verschmutzungsdynamik

T. Gries, in: Zukunftsfähige Wirtschaftspolitik für Deutschland und Europa, Springer, 2011, pp. 215 - 246

Trade Openness and Economic Growth: A Panel Causality Analysis

T. Gries, M. Redlin, Paderborn University, CIE Center for International Economics, 2011, pp. 24

Zusatzbeiträge erhöhen die Preistransparenz: mehr Versicherte wechseln die Krankenkasse

H. Schmitz, P. Eibich, N. Ziebarth, in: Wochenbericht, German Institute for Economic Research, 2011, pp. 3-12


Short-run and Long-run Dynamics of Growth,Inequality and Poverty in the Developing World

T. Gries, M. Redlin, Paderborn University, CIE Center for International Economics, 2010, pp. 21

Effizienz Deutscher Krankenhäuser im Zeitablauf

H. Schmitz, B. Augurzky, 2010


Spieltheoretische Anmerkungen zur Förderung universitärer Spitzenforschung im Rahmen der Exzellenzinitiative

M. Kraft, H. Brunn, S. Lück, in: Bildungsökonomie in der Wissensgesellschaft, 2009, pp. 241-259


China’s provincial disparities and the determinants of provincial inequality

T. Gries, M. Redlin, Paderborn University, CIE Center for International Economics, 2008, pp. 45

International integration and regional development in China

T. Gries, M. Redlin, WIDER Research Papers, United Nations University (UNU), 2008, pp. 37


Global Shift – The European Union, the United States, and the Emergence of China

T. Gries, in: 50 Years of EU Economic Dynamics, Springer, 2007, pp. 25-45

Educational Disparity and Income Inequality in Urban China

T. Gries, J. Xue, in: The Economic Science, 2007, pp. 101 -116


Rent a Bureaucrat

T. Gries, G. Sievert, A. Wieneke, in: Finanzwissenschaft im Wandel, Peter Lang Verlagsgruppe, 2005

Employment Effects of Foreign Direct Investments - A Theoretical Analysis with Heterogenous Labour

T. Gries, S. Jungblut, in: Multinational Enterprises, Foreign Direct Investment and Growth in Africa: South-African Perspectives, Physica-Verlag, 2005, pp. 229 - 245

On Global Economic Growth and the Prospects for Africa to Catch Up

T. Gries, W. Naudé, in: Multinational Enterprises, Foreign Direct Investment and Growth in Africa: South African Perspectives, Physica-Verlag, 2005, pp. 7-36


Obstacles Facing German Enterprises in South Africa

B.M. Gilroy, T. Gries, W.A. Naudé, K. Schmidt, in: Multinational Enterprises, Foreign Direct Investment and Growth in Africa: South African Perspectives, 2004, pp. 197-208


Neue Wachstums- und Innovationspolitik in Europa

T. Gries, A. Jungmittag, P.J. Welfens, Physica-Verlag, 2003




Globalization, Economic Growth and Innovation Dynamics

T. Gries, J. Addison, D. Audretsch, H. Grupp, P. Welfens, Springer-Verlag, 1999


Information Technologies, Endogenous Human Capital Depreciation and Unemployment

T. Gries, H. Meyer, in: Economic Aspects of Digital Information Technology, DUV, 1998

The Impacts of Information Technologies on Innovation Dynamics and Labor Demand

T. Gries, S. Jungblut, in: Economic Aspects of Digital Information Technology, DUV, 1998

The Dynamics of Growth and Employment in a Two-Sector Model of Job Matching

T. Gries, S. Jungblut, in: Operations Research Proceedings 1997, Springer, 1998, pp. 241-246


Catching-up of Economies in Transformation

T. Gries, S. Jungblut, in: Banking, International Capital Flows and Growth in Europe, Springer-Verlag, 1997, pp. 297 - 311


Repetitorium Mikroökonomik

T. Gries, G. Sieg, H. Strulik, Springer-Verlag, 1996

A Dynamic Model of a Reconstruction Economy

T. Gries, in: Modelling and Analysing Economies in Transition, 1996


Neue regionale Wachstumstheorie und Humankapital als regionaler charakteristischer Faktor

T. Gries, in: Standort und Region, Neue Ansätze zur Regionalökonomik, Mohr (Siebeck), 1995


Open list in Research Information System


Prof. Dr. Claus-Jochen Haake

Economics, especially Microeconomics

Claus-Jochen Haake
+49 5251 60-3378
+49 5251 60-3365

Office hours:

by appointment

The University for the Information Society