Boris Knapp
I am an Assistant Professor at the Institute of Economics at the Corvinus University of Budapest. I received my PhD from the University of Vienna. My research focuses on how boundedly rational consumers affect market outcomes and welfare. To this end, I employ theoretical models, experiments, and field data.
Here is my CV. You can also visit my student page at VGSE or my linkedin profile.
Research Interests:
Microeconomics
Game Theory
Industrial Organization
Behavioral Economics
E-mail:
Working Papers:
Fake Reviews and Naive Consumers R&R @ JLEO
Online reviews are an important source of information for consumers making it tempting for firms to manipulate them to increase their demand. Not all consumers are aware of this practice. I show that in a model with fake reviews and naive consumers the unique equilibrium is characterised by partial pooling, where fake reviews are persuasive and blend in with real ones. Raising awareness of consumers affects sophisticated consumers negatively but increases aggregate consumer surplus. If real reviews are written strategically, they are not always truthful. Given sufficiently favourable market conditions, the equilibrium where all real reviewers are strategic is outcome equivalent to one where all consumers are sophisticated. In view of online platforms, where the boundary between consumers and reviewers is fluid, this implies that if awareness campaigns cause real reviewers to write reviews strategically, they result in the same outcome irrespective of which side of the market they reach.
The Impact of Misinformation on Consumer Choices (with Dominik Stelzeneder)
Misinformation in consumer markets - like fake reviews or biased endorsements - poses a challenge for consumers that can be conceptualized as a two-step problem. First, they need to form a belief about the probability that the information is biased. Second, they need to update their beliefs conditional on receiving information. Understanding how these two channels contribute to suboptimal decisions has direct implications for consumer protection policies. This paper reports on an experiment that disentangles both channels utilizing a novel approach which relies neither on theoretical predictions nor on belief elicitation. We find that inability to correctly compute posterior probabilities drives suboptimal decisions and that this effect is heterogeneous across gender.Â
Work in Progress:
Lax Rent Control
This project investigates the Viennese rental market, where rent control is in place but enforcement is imperfect. Utilizing data on rental listings and on rent caps we estimate the effect of an imperfectly enforced rent cap. First, we compute apartment-specific rent caps and find that the majority of listings are not compliant. Second, taking advantage of discrete jumps in rent caps between geographical regions, we use a spatial regression discontinuity (RD) design to analyse the effect of an increase in the rent cap. Third, exploiting the fact that the rent cap only applies to apartments of sizes between 30m^2 and 130m^2, we use a RD design and estimate the local average treatment effect (LATE) at the upper threshold. We show that an increase in rent caps translates into rents only to a moderate extent. Furthermore, we find that the LATE around 130m^2 is negative. The results demonstrate that a rent cap that is not enforced not only lacks effectiveness but might have the perverse effect of increasing rents.
