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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.] Strategic Pricing and Consumer Welfare under One-Sided Price Regulation (April 2026, arXiv)

Abstract: Motivated by Germany’s April 2026 fuel price regulation, in this note I study a two-period pricing problem with demand uncertainty and a rule that prohibits more than one price increase during the day. Under flexible pricing, the firm chooses the static monopoly price in each period. Under the regulation, by contrast, it may price strategically high in period 1 to preserve flexibility in period 2. I show that the regulation weakly raises expected average prices. The increase is strict when future high demand is sufficiently likely and the gap between high and low demand is large; otherwise, expected average prices are unchanged. Consumer surplus rises only when expected prices do not.

Keywords: gasoline prices; price regulation; asymmetric adjustment; intraday pricing

[15.] Does Transparency Improve Legislator Performance? Evidence from the UK Parliamentary Expenses Scandal, 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.] Generative AI and Selection Efficiency in Organizations [Preparing draft, slides for 30 minutes presentation]

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

[13.] Does Ideological Polarization Lead to Policy Polarization? [January 2026, arXiv, SSRN, slides for 45 minutes presentation]

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 Regression to the Mean? Theory and Evidence from a Real-Effort Tournament, with Simona Demel, Jonas Radl, and Jan Stuhler [Slides for 25 minute presentation. Status: Preparing draft]

Tournaments are a common mechanism for allocating rewards in the workplace and beyond, where individuals compete based on relative performance. We analyze the effects of performance feedback in tournaments using both a theoretical model and experimental data. The theoretical analysis highlights the empirical challenge of disentangling the causal effect of feedback from regression to the mean and predicts that (i) feedback weakly reduces average effort and (ii) increases effort among top-ranked competitors while inducing lower-ranked participants to reduce effort. Contrary to the theoretical prediction, our experimental results show that average effort increases slightly following the provision of feedback. Consistent with the model, however, higher-ranked participants increase their effort in response to feedback.

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

[11.] Troll Farms (with Boris Ginzburg) [April 2026. Draft: arXiv, SSRN. Slides for 75 minutes presentation. ]

Abstract: We study how coordinated disinformation campaigns affect elections. We develop a constrained information design model in which a sender deploys uninformative messages that mimic voters' exogenous informative signals. Voters initially opposed to the sender's preferred outcome receive favourable messages, while those in favour are targeted with unfavourable messages to dilute adverse information. The sender's ability to manipulate political outcomes increases with greater precision of voters' independent signals, but decreases with polarisation. When messaging is costly, the sender may stop targeting marginally opposing voters while moderating message extremism among supporters.

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

[10.] Truths, Lies, and Social Ties: How Social Image Concerns Fuel Fake News, with Dana Sisak [November 2025. Draft: arXiv. Supplementary Appendix. Slides for 30 minutes presentation]

Abstract: We study how social image concerns shape information sharing among peers. Individuals receive a signal about a binary state of the world characterized by both a direction and a veracity status. While the direction is freely observable, verifying veracity is costly and depends on individual type. We consider two distinct social image motives: a desire to appear competent and a desire to signal one's worldview. For each motive, we characterize equilibrium sharing behavior and derive implications for the quality of shared information. We identify conditions under which false news is shared more frequently than factual news (e.g., Vosoughi et al., 2018). Both competence- and worldview-based motives can rationalize such patterns, though they yield empirically distinct sharing behaviors and different welfare implications. Finally, we derive testable predictions for each motive and discuss how these align with existing empirical evidence.

Keywords: Information Sharing, Fake News, Status Seeking

[9.] Motivated Reasoning and the Political Economy of Climate Change Inaction [January 2026. Draft: arXiv. Slides for 25 minutes presentation (older version). Revise & Resubmit at Journal of Economic Behavior & Organization ]

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):

Task Design and Talent Selection in Organizations
Learning on Social Networks with Correlation Neglect and the Efficiency of Collective Choice, with Martin Dumav and Boris Ginzburg
Clickbait: User Engagement Through Selective Emphasis, with Boris Ginzburg
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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