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"Die Praxis sollte das Ergebnis des Nachdenkens sein, nicht umgekehrt." (Hermann Hesse)

("Practice should be the result of contemplation, not the other way around")

Working Papers and Advanced Work in Progress:

[16.] Generative AI and Selection Efficiency in Promotion Tournaments [preparing draft]

Abstract: Many firms—especially in technology—use tournaments among peers to decide promotions. Generative AI has rapidly entered the workplace. Now simpler, low-level tasks can be completed more efficiently with AI assistance, while high-level tasks still require human judgment and skill. This paper develops a game-theoretic model of promotion tournaments. AI increases overall output but compresses performance differences by leveling low-level work. A key implication is that generative AI may undermine selection efficiency: firms become less likely to promote the truly high-skill employee, even though productivity rises across the board.

Keywords: Tournaments, Generative AI, Selection Efficiency

[15.] The Long-run Impact of the MP Expenses Scandal in the UK,with Luis Martinez, Nicolas Motz, and Carlos Sanz [Preparing draft]

Abstract: We investigate the short-run and long-run consequences of the UK parliament expenses scandal of 2009. Relying on a difference-in-differences approach, we compare outcomes in constituencies where an MP was found to be involved in the scandal with outcomes in the remaining constituencies. We find that electoral punishment was focused on personally involved MPs, while parties that replaced incumbents suffered no loss in votes. We also find evidence of an asymmetric response across parties, with the Conservative party increasing campaign spending and fielding younger and more female candidates in affected constituencies, while no such effects are observable for the Labour party. Finally, we also investigate behavioural responses by MPs in terms of subsequent expenses claims and behaviour in Parliament.

Keywords: Political Accountability, Scandal, Political Behavior

[14.] Backfiring Climate Protests [Preparing draft]

Abstract: An activist group seeks to induce policy change by mobilizing citizens in support of a reform. Activists are both motivated by doing "good" and by changing policies, and they need to decide how costly the campaign will be for citizens without knowing their exact political leanings. If the fraction of citizens supporting the activists' cause is sufficiently high, the government may take action and implement the desired policy. However, if sufficiently many citizens oppose the policy change, the activist group may disappear, and the status quo policy will remain unchanged. When the government is responsive to political pressure from citizens, imposing a higher cost on citizens increases the chances of achieving the intended policy change by the activist group. However, if government responsiveness is low, imposing costs on citizens leads to opposition against the activists' cause, and climate protests backfire. The model helps to explain why activist groups such as Fridays for Future have increased popular support for measures against climate change, while others like Extinction Rebellion or The Last Generation seem to decrease it.

Keywords: Activism, Private Politics, War of Attrition, Climate Change

[13.] Does Ideological Polarization Lead to Policy Polarization? [October 2025, arXiv, SSRN]

Abstract: I study an election between two ideologically polarized parties that are both office-and policy motivated. The parties compete by proposing policies on a single issue. The analysis uncovers a non-monotonic relationship between ideological and policy polarization. When ideological polarization is low, an increase leads to policy moderation; when it is high, the opposite occurs, and policies become more extreme. Moreover, incorporating ideological polarization refines our understanding of the role of valence: both high-and low-valence candidates may adopt more extreme positions, depending on the electorate's degree of ideological polarization.

Keywords: Electoral Competition, Policy Polarization, Ideology, Valence

[12.] Feedback Effects or Small Sample-Size Theater? Regression to the Mean in a Real-Effort Tournament, with Simona Demel, Jonas Radl, and Jan Stuhler [Slides for 25 minute presentation. Status: Preparing draft]

Abstract: Tournaments are a common mechanism for allocating rewards in education, the workplace, and beyond, where individuals compete based on relative performance. We analyze the effects of performance feedback in tournaments using both theoretical modeling and experimental data. The theoretical analysis predicts that feedback increases effort among top-ranked competitors, while inducing lower-ranked participants to reduce their output. However, it also highlights the empirical challenge of disentangling the effect of feedback from regression to the mean. Our experimental results support the theoretical predictions and illustrate the nuanced behavioral responses to feedback in competitive environments.

Keywords: Tournaments, Feedback, Regression to the Mean, Effort

[11.] Troll Farms (with Boris Ginzburg) [November 2024. Draft: arXiv, SSRN. Slides for 60 minutes presentation. ]

Abstract: Political agents often attempt to influence collective choices through troll farms—organizations that flood social media platforms with messages emulating genuine information. We model the behavior of a troll farm that faces a heterogeneous electorate of partially informed voters and aims to achieve a desired political outcome by targeting each type of voter with a specific distribution of messages. We show that such tactics are more effective when voters are otherwise well-informed. Consequently, societies with high-quality media are more vulnerable to electoral manipulation, and counteracting troll farms may require the promotion of informative but nonexpert opinions. At the same time, increased polarization, as well as deviations from Bayesian rationality, can reduce the negative effect of troll farms and restore the efficiency of electoral outcomes.

Keywords: Disinformation, AI, Political Competition, Persuasion, Information Design

[10.] Information Sharing with Social Image Concerns and the Spread of Fake News, with Dana Sisak [April 2025. Draft: arXiv. Slides for 25 minutes presentation]

Abstract: We study how social image concerns influence information sharing between peers. Individuals receive a signal about a binary state of the world, characterized by a direction and a veracity status. While the direction is freely observable, verifying veracity is costly and type-dependent. We examine two types of social image motives: a desire to appear talented---i.e., able to distinguish real from fake news---and a desire to signal one's worldview. For each motive, we characterize equilibrium sharing patterns and derive implications for the quality of shared information. We show that fake news may be shared more frequently than factual news (e.g., Vosoughi et al., 2018). Both veracity- and worldview-driven motives can rationalize this behavior, though they lead to empirically distinct sharing patterns and differing welfare implications.

Keywords: Information Sharing, Fake News, Status Seeking

[9.] Motivated Reasoning and the Political Economy of Climate Change Inaction [February 2025. Draft: arXiv. Slides for 25 minutes presentation.]

Abstract: Two office-motivated politicians compete in an election by proposing policies. There are two possible states of the world: climate change is either mild, causing no lasting effect on welfare if the appropriate policy is implemented, or climate change is severe, leading to decreased welfare even if appropriate measures are taken. Voters receive signals about the state of the world but may choose to hold motivated beliefs, interpreting these signals in a non-Bayesian manner to increase anticipatory utility. If voters a priori believe that severe climate change is unlikely, an equilibrium always exists where they ignore any signal suggesting severe consequences, thereby incentivizing politicians to also disregard their information and offer policies only for mild climate change---even when the politicians are certain of the contrary. If severe climate change results in catastrophic welfare losses, this equilibrium is also unique. However, if severe climate change only leads to moderate welfare losses, an efficient equilibrium exists where politicians choose the optimal policies based on the actual state of the world. In this case, voters' beliefs about the implemented policies become self-fulfilling: if voters trust that politicians will choose optimal policies, this indeed happens in equilibrium. Conversely, if voters expect politicians to ignore information and adhere to a popular policy platform, politicians will follow suit and deliver precisely those policy platforms. I discuss the model's implications for political rhetoric and the importance of trust in government. A first look at the data supports the model's predictions.

Keywords: Climate Change, Political Competition, Motivated Reasoning

Publications:

[8.] Showing off or Laying Low? The Economics of Psych-outs (with John Morgan and Dana Sisak). American Economic Journal: Microeconomics, 2022, Volume 14, pages 529–580. Latest draft here.

[7.] Social Connectivity, Media Bias, and Correlation Neglect (with Martin Dumav and Boris Ginzburg). The Economic Journal, 2021, Volume 131, pages 2033–2057. Latest draft here. Slides here.

[6.] Valence, Complementarities, and Political Polarization. Games and Economic Behavior, 2021, Volume 128, pages 39-57. Latest draft here.

[5.] Campaign Contests (formerly 'A Theory of Communication in Political Campaigns'). European Economic Review, 2020, Volume 127, article 103459. Latest draft here.

[4.] Hide or show? Endogenous Observability of Private Precautions against Crime (with Florian Baumann and Tim Friehe). American Law and Economics Review, 2019, Volume 21, Issue 1, pages 209–245. Latest draft here.

[3.] Head Starts in Dynamic Tournaments? (with Dana Sisak). Economics Letters, 2016, Volume 149, pages 94-97. Latest draft here.

[2.] Do Polls Create Momentum in Political Competition? (with Dana Sisak). Journal of Public Economics, 2015, Volume 130, pages 1-14 (lead article). Latest draft here.

[1.] The Fragility of Deterrence in Conflicts (with Dana Sisak). Journal of Theoretical Politics, 2015, Volume 27 (1), pages 43-57. Latest draft here.

Work in Progress (titles are tentative):

Designing Selection Tournaments: Substitutes or Complements?
Learning on Social Networks with Correlation Neglect and the Efficiency of Collective Choice, with Martin Dumav and Boris Ginzburg
Ambiguity Aversion and the Provision of Global Public Good, with Martin Dumav
Clickbait in Online News Markets, with Boris Ginzburg
Campaign Spending Limits and the Polarization of Policies
Ambiguity in Multiparty Electoral Competition, with Dana Sisak

Dormant Papers/Projects:

"Where Ignorance is Bliss, 'tis Folly to be Wise": Transparency in Contests (with John Morgan and Dana Sisak), University of St. Gallen, School of Economics and Political Science Discussion Paper #1128. Last version: June 2014.
Fundraising and Momentum in Political Competition (with Dana Sisak, inactive)
Social Identities and Voting (with Mario Mechtel , inactive)

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