Discussion Paper No. 548
October 16, 2025
Management Practices and Firm Performance During the Great Recession
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Abstract:
This paper empirically examines how management practices affect firm productivity over the business cycle. Using plant-level high-dimensional human resource policies survey data collected in Spain in 2006, we employ unsupervised machine learning to describe clusters of management practices (“management styles”). We establish a positive correlation between a management style associated with structured management and performance prior to the 2008 financial crisis. Interestingly, this correlation turns negative during the financial crisis and positive again in the economic recovery post-2013. Our evidence suggests firms with more structured management are more likely to have practices fostering culture and intangible investments such that they focus in long-run profitability, prioritizing innovation over cost reduction, while having higher adjustment costs in the short-run through higher share of fixed assets and lower employee turnover.
Keywords:
management practices; culture; unsupervised machine learning; productivity; great recession;
JEL-Classification:
M12; D22; C38;
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Discussion Paper No. 547
October 9, 2025
Gratitude in Fundraising: Do 'Thank You in Advance' and Handwritten Thank-You Notes Impact Fundraising Success?
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While almost all charities rely on a set of donor appreciation strategies, their effectiveness for the success of fundraising campaigns is underresearched. Through two preregistered field studies conducted in collaboration with a leading German opera house (N=10,000), we explore the significance of expressing gratitude and examine two different approaches to doing so. Our first study investigates the impact of a "thank you in advance" statement in fundraising letters, a common strategy among fundraisers. In the second study, we explore the effectiveness of handwritten thank-you postcards versus printed postcards, shedding light on the roles of personalization and handwriting in donor appeals. Our findings challenge conventional wisdom, revealing that neither “thank you in advance” nor handwritten thank-you notes significantly affect donor contributions.
Keywords:
fundraising; charitable giving; gratitude; field experiment;
JEL-Classification:
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Discussion Paper No. 546
Confidence and Information in Strategy-Proof School Choice
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Abstract:
Contrary to classical theory, we provide experimental evidence that preference reports in a strategy-proof school-choice mechanism systematically depend on beliefs. We employ a "hard-easy gap" to exogenously vary students' beliefs about their priority rank. As predicted, underconfidence induces more manipulation and thus more justified envy than overconfidence. The effect of priority information on justified envy crucially depends on the initial beliefs and the real priority ranks: while top students always gain, non-top students lose from this information. In total, correcting overconfidence/underconfidence increases/decreases justified envy. Finally, we confirm that additionally providing information on school availability through a dynamic implementation of the mechanism reduces justified envy compared to priority information alone.
Keywords:
market design; school choice; overconfidence; strategy-proofness; information;
JEL-Classification:
C92; D47;
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Discussion Paper No. 545
September 27, 2025
Identity and Institutional Change: Evidence from First Names in Germany, 1700–1850
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How does culture respond to institutional change? We study the collapse of the Holy Roman Empire (1789–1815), when half of Central Europe changed rulers. Using 44 million birth records from hundreds of cities between 1700 and 1850, we measure cultural traits in real time. Cities that experienced ruler change saw greater naming turnover, dispersion, and novelty. We construct control groups using diplomatic records to isolate these effects, which emerged immediately and persisted. The collapse of hegemonic authority weakened state-aligned identities while strengthening religiosity and nationalism. These shifts undermined subsequent state building, highlighting challenges of ideological integration after regime change.
Keywords:
institutional change; cultural persistence; identity formation;
JEL-Classification:
N33; P16; Z10;
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Discussion Paper No. 544
September 19, 2025
Measuring the Urban Quality of Life Premium
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We employ a quantitative spatial model that accounts for trade fritions—generated by trade costs and non-tradable services—and mobility frictions—generated by idiosyncratic tastes and local ties—to recover unobserved quality of life (QoL) and estimate the urban QoL premium. For Germany, we find that a city twice as large offers, on average, a 22% higher QoL to the average resident—far exceeding the urban wage premium of 4%. Our model-based Monte Carlo simulations suggest that the lack of strong empirical evidence for an urban QoL premium in earlier literature likely stems from measurement error in the Rosen-Roback framework due to omitted spatial frictions.
Keywords:
housing; spatial frictions; rents; prices; productivity; quality of life; spatial equilibrium; wages;
JEL-Classification:
J2; J3; R2; R3; R5;
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Discussion Paper No. 543
August 7, 2025
Luck Or Effort: Perceptions of the Role of Circumstances in Education and Demand for Targeted Spending
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Perceptions about students’ personal responsibility for their own success might have crucial implications for public approval of targeted financial support. Using a survey experiment among the German adult population, we find that information about the correlation of education outcomes and parental background strongly increases the perception that external circumstances determine educational success. These effects persist in a follow-up survey conducted two weeks later. Information also significantly increases private donations to charities supporting students from disadvantaged socio-economic backgrounds but does not affect demand for redistributive education spending by the government. This pattern of results is consistent with differences in the perceived opportunity costs of funds used in both spending decisions.
Keywords:
circumstances; effort; information; survey experiment; charitable donations; equality of opportunity; policy preferences;
JEL-Classification:
I24; H52; H11; D83; D63; D64;
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Discussion Paper No. 542
Does Remote Work Reinforce Gender Gaps in (Un)Paid Labor?
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I study how the rise in working from home (WFH) affects the gender division of paid and unpaid labor (caregiving, domestic tasks). Identification uses differences in individuals' exposure to the Covid-induced WFH shock, measured by the WFH feasibility of their job in 2019. Using panel data from the German SOEP, I estimate 2SLS models that instrument realized WFH in 2022 with WFH feasibility. Results show that WFH reduces paid hours and increases domestic work and leisure (including sleep) among women. Men's time use remains largely unchanged, partly because WFH induces moves toward larger, more distant homes, offsetting commuting time savings. Within-couple analyses confirm that the Big Shift to WFH intensifies gender gaps in paid and unpaid work, particularly caregiving. I find that gender norms, bargaining power, and childcare demands interact with WFH in ways that reinforce the unequal division of labor.
Keywords:
work from home; time use; unpaid work; division of labor; gender norms; bargaining power;
JEL-Classification:
J16; J22; J13;
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Discussion Paper No. 541
July 31, 2025
Monetizing Digital Content with Network Effects
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We design profit-maximizing mechanisms to sell an excludable and non-rival good with positive and/or negative network effects. Buyers have heterogeneous private values that depend on how many others also consume the good. In optimum, an endogenous number of the highest types consume the good, and we can implement this allocation in dominant strategies. We apply our insights to digital content creation, and we are able to rationalize features seen in monetization schemes in this industry such as voluntary contributions, community subsidies, and exclusivity bids.
Keywords:
mechanism design; non-rival goods; club goods; network effects; digital content; creator economy;
JEL-Classification:
D82;
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Discussion Paper No. 540
July 28, 2025
Mean Field Portfolio Games with Epstein-Zin Preferences
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We study mean field portfolio games under Epstein-Zin preferences, which naturally encompass the classical time-additive power utility as a special case. In a general non-Markovian framework, we establish a uniqueness result by proving a one-to-one correspondence between Nash equilibria and the solutions to a class of BSDEs. A key ingredient in our approach is a necessary stochastic maximum principle tailored to Epstein-Zin utility and a nonlinear transformation. In the deterministic setting, we further derive an explicit closed-form solution for the equilibrium investment and consumption policies.
Keywords:
epstein-zin utility; mean field game; stochastic maximum principle;
JEL-Classification:
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Discussion Paper No. 539
Measuring Long-Run Expectations that Correlate with Investment Decisions
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Abstract:
Different methods of eliciting long-run expectations yield data that predict economic choices differently well. We ask members of a wide population sample to make a 10-year investment decision and to forecast stock market returns in one of two formats: they either predict the average of annual growth rates over the next 10 years, or they predict the total, cumulative growth that occurs over the 10-year period. Results show that total 10-year forecasts are more pessimistic than average annual forecasts, but they better predict experimental portfolio choices and real-world stock market participation.
Keywords:
household finance; long-run predictions; survey experiments;
JEL-Classification:
D01; D14; D84; D9;