Current Research
Working Papers
Pricing in Response to New Information: The Case of Betting Markets
Winner of the ESEA Best Young Research Paper Award 2022 - joint with Kai Fischer
Conditionally Accepted at Economic Inquiry
The acknowledgment of markets as information aggregators is a cornerstone of economics. But it remains an important question how markets incorporate new information into existing pricing schemes. We study this using the example of prediction markets. In a quasi-natural experiment, we investigate how the announcement of absent elite soccer players influences the betting odds on the outcomes of the affected matches. We analyze the first three statistical moments of 117,174 odds from 32 bookmakers in Europe. In doing that, we identify initial inertia in response to absence announcements followed by a lagged reaction that cannot be justified with learning. This is new evidence of market inefficiency that has implications for financial markets.
Presented at the 10th Football & Finance Conference (Mercator School of Management), Leipzig Colloquium on the Foundations of the Market Order, IX. MathSports International Conference (U Reading), and the 101st ROSES Seminar (U Reading).
Former Title: Rabbits Caught in the Headlights: Mispricing New Information in a High Stakes Environment
Polycentric Governance in Collusive Agreements
Revise & Resubmit at the Journal of Institutional Economics - preliminary version here
Collusive agreements in the form of cartels among firms are complex structures. The involved firms need to agree on prices and sales quotas that are legally not enforceable. Market characteristics that foster cartels' failure or success are widely examined. However, the interplay between the involved firms in a collusive agreement, i.e., the governance dimension within a cartel, has received surprisingly low attention. Using a comprehensive dataset of 191 cartels from 2012 - 2018, this paper econometrically reveals that polycentric structures within the cartel governance may contribute to longer duration and lower sanctions imposed by competition authorities, especially for large cartels. By that, the paper sheds new light on two aspects: The entangled governance structures of collusive undertakings as well as the relevance of polycentricity in the firm environment. The insights may be helpful for cartel authorities and new research combining institutional and industrial economics.
This work received support from the Institute for Humane Studies at George Mason University under grant no. IHS016790. Presented at NOUS Spotlight 03/24, the 51st Annual Meetings of the European Public Choice Society, WU Vienna; 2nd Markets & Society Conference, Mercatus Center at George Mason University, Falls Church (VA, USA).
Upcoming presentations: 28th Annual SIOE Conference 2024, U Chicago
Replication files are available on GitHub.
The X Factor: Open Access, New Journals, and Incumbent Competitors
Current Version available here. Earlier version published as MSI Working Paper 2307 here (outdated)
The academic publishing market is considerable in its size, its highly oligopolistic structure, and the profits it extracts from researchers and their universities. In this paper, I evaluate whether there exists a citation advantage for open access publications and whether new market entrants suffer from less recognition. To do so, I exploit a quasi-causal setting created by Elsevier. In 2019, the publisher launched its 'X journals:' Relying on the editorial process of their `parent journals,' X journals were the full open access derivatives of established outlets. In parallel, Elsevier continued to offer authors an open access option for their publications within the established outlets. Exploiting this threefold variation, I cannot detect any impact of open access on citations within the incumbent journals. However, a large and adverse effect exists for the novel journals. This `X factor' represents a nonnegligible entry barrier for potential competitors in the publishing market. My findings do not only question how far researchers will follow the call for more open access but raise doubts about to which extent competition can be enhanced in this market, which would benefit researchers, universities, and ultimately the public.
Presented at the Workshop: “The Organisation, Economics and Policy of Scientific Research," Collegio Carlo Alberto, Turin (IT); RISE 6 Workshop, Max Planck Institute for Competition & Innovation (DE); CWTS Research Seminar at Leiden University (NL); Lunchtime Seminar at Leipzig University (DE); the REGIS Summer School at the Sant'Anna School of Advanced Studies Pisa (IT); DICE PhD Workshop (DE, internal), Eucken Institute Internal Seminar
Upcoming presentations: Munich Summer Institute 2024 (Bavarian Academy of Sciences, Munich, DE); TU Ilmenau Brownbag Seminar (DE); EARIE Annual Conference (U van Amsterdam, NL); EEA Annual Conference (Erasmus U Rotterdam, NL); VfS Jahrestagung [Annual Conference of the German Economic Association] (TU Berlin, DE)
The ‘Must Stock' Challenge in Academic Publishing: Pricing Implications of Transformative Agreements
Working Paper available on arXiv
The high relevance of top-notch academic journals turns them into 'must stock' products that assign its often commercial owners with extraordinary market power. Intended to tackle this, university consortia around the globe negotiate so-called 'transformative agreements' with many publishing houses. It shall pave the way towards standard open-access publishing. While several contract designs exist, the 'publish-and-read' (PAR) scheme is the one that comes closest to the ideal of an entirely open access environment: Publishers are paid a fixed case-by-case rate for each publication, which includes a fee for their extensive libraries. In turn, all subscription payments are waived. I theoretically derive that this contract design benefits the included publishers regardless of whether the number of publications in these publishers' journals grows or declines. Consequently, widespread PAR contracts are likely to raise entry barriers for new (open-access) competitors even further. Intending to lower costs for the universities, their libraries, and, ultimately, the taxpayers, this PAR fee contract design of transformative agreements might cause the opposite.
Presented at the 11th OLIGO Workshop at the University of Padova (IT); 57th Hohenheim Colloquium at Bauhaus University Weimar (DE)
On Corporate Cartels as Common Pool Resources
Working Paper available at SSRN (outdated, update coming soon)
Usually, economic research on collusion looks at the firms and how they optimally behave. The complex situation in which involved agents of the firms find themselves tends to be overly simplified or overlooked. This exploratory paper looks through the lens of the `governance of the commons' to study the internal organization of cartels. It highlights the high entanglement of the agents' norms, habits, and individual incentives within collusive agreements and suggests a novel interpretation of a cartel's excess profit as a common pool resource. Last, it uses a simple theoretical toy model to demonstrate how complex governance decisions may become for the involved agents once one loosens the modeling restrictions on their behavior. I suggest the 'Institutional Analysis and Development' (IAD) framework to better understand the governance of collusive agreements. By doing this, the paper sheds new light on the economic analysis of collusion and provides many starting points for future research at the intersection of institutional economics, public choice, and industrial organization.
Presented at the Annual Meetings of the Public Choice Society 2023 (Seattle, WA), and the European Public Choice Society Annual Conference 2023 (Leibniz University Hannover, DE); at the 59th Hohenheim Colloquium 2023, University of Hohenheim (DE); at the 1st Markets & Society Conference 2022, Mercatus Center at George Mason University (VA)
Working Paper available at SSRN (outdated, update coming soon)
Usually, economic research on collusion looks at the firms and how they optimally behave. The complex situation in which involved agents of the firms find themselves tends to be overly simplified or overlooked. This exploratory paper looks through the lens of the `governance of the commons' to study the internal organization of cartels. It highlights the high entanglement of the agents' norms, habits, and individual incentives within collusive agreements and suggests a novel interpretation of a cartel's excess profit as a common pool resource. Last, it uses a simple theoretical toy model to demonstrate how complex governance decisions may become for the involved agents once one loosens the modeling restrictions on their behavior. I suggest the 'Institutional Analysis and Development' (IAD) framework to better understand the governance of collusive agreements. By doing this, the paper sheds new light on the economic analysis of collusion and provides many starting points for future research at the intersection of institutional economics, public choice, and industrial organization.
Presented at the Annual Meetings of the Public Choice Society 2023 (Seattle, WA), and the European Public Choice Society Annual Conference 2023 (Leibniz University Hannover, DE); at the 59th Hohenheim Colloquium 2023, University of Hohenheim (DE); at the 1st Markets & Society Conference 2022, Mercatus Center at George Mason University (VA)
Collusive Compensation Schemes Aided by Algorithms
Joint with Simon Martin - current version available here
Recent advances in demand forecasting algorithms enable firms to predict future market conditions more precisely. As firms engaging in anti-competitive conduct frequently employ sophisticated collusive compensation schemes (e.g., assigning future market shares or direct transfers), predictive ability affects both the overall stability of collusion and also the choice of the optimal compensation scheme. We find that across compensation schemes, prices, and profits are inverse U-shaped in prediction ability. Assigning future market shares is optimal when prediction ability is intermediate, and otherwise, direct transfers are optimal, which has novel and important implications for competition policy.
Joint with Simon Martin - current version available here
Recent advances in demand forecasting algorithms enable firms to predict future market conditions more precisely. As firms engaging in anti-competitive conduct frequently employ sophisticated collusive compensation schemes (e.g., assigning future market shares or direct transfers), predictive ability affects both the overall stability of collusion and also the choice of the optimal compensation scheme. We find that across compensation schemes, prices, and profits are inverse U-shaped in prediction ability. Assigning future market shares is optimal when prediction ability is intermediate, and otherwise, direct transfers are optimal, which has novel and important implications for competition policy.
Presented at the 10th OLIGO Workshop at the University of Cyprus, the 5th CESifo Area Conference on the Economics of Digitization, the 92nd IAES Conference, the SasCa PhD Conference 2021, and the DICE PhD Research Workshop. Earlier versions: CESifo Working Paper No. 9481, Conference draft for the CESifo Area Conference on the Economics of Digitization 2021. Further materials: Extended Abstract, Slides of my presentation at the CESifo Area Conference on the Economics of Digitization 2021
Quantitative Tools for Time Series Analysis in Natural Language Processing
Preliminary Working Paper available on arXiv
Natural language processing tools have become frequently used in social sciences such as economics, political science, and sociology. Many publications apply topic modeling to elicit latent topics in text corpora and their development over time. Here, most publications rely on visual inspections and draw inference on changes, structural breaks, and developments over time. We suggest using univariate time series econometrics to introduce more quantitative rigor that can strengthen the analyses. In particular, we discuss the econometric topics of non-stationarity as well as structural breaks. This paper serves as a comprehensive practitioners guide to provide researchers in the social and life sciences as well as the humanities with concise advice on how to implement econometric time series methods to thoroughly investigate topic prevalences over time. We provide coding advice for the statistical software R throughout the paper. The application of the discussed tools to a sample dataset completes the analysis.
Early Stage Projects
Joint Projects:
Policing Mass Events: Who Should Pay? - joint with James Reade (U Reading, UK) and Dilara Wiemann (U Siegen, DE)
Work in progress
The role of red tape for innovation and growth: Firm-level evidence - joint with Dirk Czarnitzki (MSI at KU Leuven, BE)
Work in progress
The impact of "Plan S" on scholarly publishing - joint with Pablo de Castro (U Strathclyde, UK), Ulrich Herb (ULB at U Saarland, DE), Laura Rothfritz (HU Berlin, DE), and Joachim Schöpfel (U Lille, FR)
Work in progress, provisional abstract coming soon. Replication code is available publicly on GitHub.
Presentations: OASPA Panel Session - here are my slides
The Evolution of Public Choice in 'Public Choice' - joint with Mark McAdam and Theo Simon (both U Siegen, DE)
Work in progress