Original Research Articles
Monetary Policy under Behavioral Expectations: Theory and Experiment Link to article (open access) Online Appendix Slides (PDF)
Cars Hommes, Domenico Massaro, and Matthias Weber (2019). European Economic Review, 118:193–212.
In the media: Bloomberg.
Expectations play a crucial role in modern macroeconomic models. We consider a New Keynesian framework under a behavioral model of expectation formation and under rational expectations. Contrary to the rational model, the behavioral model predicts that inflation volatility can be lowered if the central bank reacts to the output gap in addition to inflation. We test the opposing theoretical predictions in a learning-to-forecast experiment. In line with the behavioral model, the results support the claim that output stabilization can lead to less volatile inflation.
An Experimental Study of Bond Market Pricing Link to article (read-only for non-subscribers)
Matthias Weber, John Duffy, and Arthur Schram (2018). Journal of Finance, 73(4):1857–1892.
In the media: LSE Business Review.
An important feature of bond markets is the relationship between the IPO price and the probability that the issuer defaults. On the one hand, the default probability affects the IPO price. On the other hand, IPO prices affect the default probability. It is a priori unclear whether agents can competitively price such assets and our paper is the first to explore this question. We do so using laboratory experiments. We develop two flexible bond market models that are easily implemented in the laboratory. We find that subjects learn to price the bonds well after only a few repetitions.
Choosing the Rules: Preferences over Voting Systems for Assemblies of Representatives Link to article Link to WP-version
Matthias Weber (2017). Journal of Economic Behavior and Organization, forthcoming.
There are many situations in which different groups make collective decisions by voting in an assembly or committee where each group is represented by a single person. There is a lot of theoretical, normative literature on the question of what voting system such an assembly should use, but so far there has been no consensus. Instead of studying the choice of voting systems based on theoretical concepts, I ask which voting systems individuals actually prefer. This is important for the legitimacy and acceptance of voting institutions. To answer this question, I design a laboratory experiment in which participants choose voting systems when they do not know which group they will be in (and as a control when they do know it). Behind the veil of ignorance, participants predominantly choose voting systems that allocate more voting power to larger groups than the most prominent theoretical concept suggests.
Note: An earlier version of this paper was called “Choosing Voting Systems behind the Veil of Ignorance: A Two-Tier Voting Experiment”.
The Non-Equivalence of Labor Market Taxes: A Real-Effort Experiment Link to article (read-only for non-subscribers) Slides (PDF)
Matthias Weber and Arthur Schram (2017). Economic Journal, 127(604):2187–2215.
Under full rationality, a labour market tax levied on employers and a corresponding income tax levied on employees are equivalent. With boundedly rational agents, this equivalence is no longer obvious. In a real-effort experiment, we study the effects of these taxes on preferences concerning the size of the public sector, subjective well-being, labour supply and on-the-job performance. Our findings suggest that employer-side taxes induce preferences for a larger public sector. Subjective well-being is higher under employer-side taxes while labour supply is lower, at least at the extensive margin. We discuss three mechanisms that may underlie these results.
The Effects of Listing Authors in Alphabetical Order: A Review of the Empirical Evidence Link to article (free access)
Matthias Weber (2018). Research Evaluation, 27(3):238–245.
Each time researchers jointly write an article, a decision must be made about the order in which the authors are listed. There are two main norms for doing so. The vast majority of scientific disciplines use a contribution-based norm, according to which authors who contributed the most are listed first. Very few disciplines, most notably economics, instead resort primarily to the norm of listing authors in alphabetical order. It has been argued that (1) this alphabetical norm gives an unfair advantage to researchers with last name initials early in the alphabet and that (2) researchers are aware of this ‘alphabetical discrimination’ and react strategically to it, for example by avoiding collaborations with multiple authors. This article reviews the empirical literature and finds convincing evidence that alphabetical discrimination exists and that researchers react to it.
Notes, Perspectives, Comments
Thoughts on Voting Power and the Public Good Index Link to WP-version
Matthias Weber (2019). Munich Social Science Review, New Series. Forthcoming.
Among the wide variety of voting power indices, the public good index (PGI) is one of the less well-known ones. Holler (2019) posits hypotheses about why this is the case. In response to these hypotheses, I share a few thoughts about voting power in general and about the popularity of the PGI.
The question whether the position of a researcher’s last name in the alphabet matters for his or her scientific career is important. This comment reflects on the methodology used in Abramo and D’Angelo (2017, Journal of Informetrics 11(1):121-127) and shows the weaknesses of the chosen approach.
There are many situations in which different groups make collective decisions by committee voting, with each group represented by a single person. This paper is about two closely related problems. The first is that of how to measure the inequality of a voting system in such a setting. The second is the inverse power problem: the problem of finding voting systems that approximate equal indirect voting power as well as possible. I argue that the coefficient of variation is appropriate to measure the inequality of a voting system and to specify the inverse problem. I then show how specifying the inverse problem with the coefficient of variation compares to using existing objective functions.
Mostly Sunny: A Forecast of Tomorrow’s Power Index Research Article (PDF)
Sascha Kurz, Nicola Maaser, Stefan Napel, and Matthias Weber (2015). Homo Oeconomicus, 32(1):133–146.
Power index research has been a very active field in the last decades. Will this continue or are all the important questions solved? We argue that there are still many opportunities to conduct useful research with and on power indices. Positive and normative questions keep calling for theoretical and empirical attention. Technical and technological improvements are likely to boost applicability.