Multiplicative growth processes that are subject to random shocks often have a skewed distribution of outcomes. In a number of incentivized laboratory experiments we show that a large majority of participants either strongly underestimate skewness or ignore it completely. Participants misperceive the outcome distribution's spread to be far too narrow-band and they estimate the median to lie too close ...
Abstract: The paper studies the causal effects of graduating from university with an honors degree on subsequent labor market outcomes. While a rich literature has focused on the identification of the returns to human capital, few studies could analyze returns at the very top of the education distribution. We highlight the importance of honors degrees for future labor market success in the context...
This paper is the first to analyze the impact of family background on permanent earnings based on sibling correlations in Germany and to provide a cross-country comparison of Germany, Denmark, and USA. The main findings are that family and community background has a stronger influence on permanent earnings in Germany than in Denmark, and a comparable influence is found in USA. This holds true for both ...
The paper deals with the competitive effects of price guarantees in a spatial duopoly where consumers can search for lower prices but have to incur hassle costs if they want to claim a price guarantee. It is shown that symmetric equilibria with and without price guarantees exist but price guarantees will have no effect on prices if search costs are low, hassle costs are high and the number of uninformed ...
We present work in progress on evaluating the employment and wage effects of social security contributions (SSC). We propose to use an equilibrium job search model allowing for extensive and intensive employment reactions, with firms also changing wages. The model naturally generates adjustment dynamics. Using firm-level data on productivity will allow us to identify to what extent productive...
