Pre-production Papers

In the context of stochastic choice, we introduce an individual decision model which admits a cardinal notion of peer influence. The model presumes that individual choice is not only determined by idiosyncratic evaluations of alternatives but also by the influence from the observed behavior of others. We establish that the equilibrium defined by the model is unique, stable and falsifiable.

We assess how firm expectations about future production impact current production and pricing decisions. Our analysis is based on a large survey of firms in the German manufacturing sector. To identify the causal effect of expectations, we rely on the timing of survey responses and match firms with the same fundamentals but different views about the future. Firms that expect their production to increase (decrease) in the future are 15 percentage points more (less) likely to raise current production and prices, compared to firms that expect no change in production.

This paper develops a theoretical framework to study the interaction between globalization and political structure. We show that political structure adapts in a non-monotonic way to declining transport costs. Borders hamper trade. At an earlier stage, the political response to expanding trade opportunities consists of removing borders by increasing country size. At a later stage, instead, it consists of removing the cost of borders by creating international unions.

We study the tradeoff between fundamental risk and time. A time-constrained agent has to solve a problem. She dynamically allocates effort between implementing a risky initial idea and exploring alternatives. Discovering an alternative implies progress that has to be converted to a solution. As time runs out, the chances of converting it in time shrink.

Can well-defined access rights to publicly owned land be as effective as privatization in increasing productivity and wealth? In this paper, I evaluate the impact of public property rights using the 1934 Taylor Grazing Act, which determined secure access rights for ranchers to newly created, large grazing districts in the Western US. Using satellite-based vegetation data, I exploit spatial discontinuities across grazing district boundaries and find that public lands with well-defined access rights for ranchers are at least 10% more productive than lands without. Immediately after establishing grazing districts, ranchers inside these districts held more cattle, reported higher income and farm values than their counterparts outside.

We study competition for the market in a setting where incumbents (and, to a lesser extent, neighbouring incumbents) benefit from a cost or information advantage. We first compare the outcome of staggered and synchronous tenders, before drawing the implications for market design. We find the timing of tenders interrelates with the likelihood of monopolisation.

We use detailed administrative data to study the adjustment of local labor markets to industrial robots in Germany. Robot exposure, as predicted by a shift-share variable, is associated with displacement effects in manufacturing, but those are fully offset by new jobs in services.

This paper evaluates the effect on crime of creating a fundamental modern-day institution: centralized professional police forces tasked with preventing crime. We study the 1829 formation of the London Metropolitan Police – the first professional force worldwide.