Discussion Paper No. 404
June 30, 2023
I'll Try That, Too - A Field Experiment in Retailing on the Effect of Variety During Display Promotions
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Abstract:
The effect of variety on consumer choice has been studied extensively, with some stream of literature showing the positive effects on choice and others arguing that too many alternatives may result in negative consequences (i.e., choice deferral or no purchase at all), often referred to as choice overload. In a field experiment with a major chocolate brand conducted at a German retail chain, we test for variety during a price and display promotion. Participating stores either include the full variety of products on the display or a reduced selection (low variety). Contrary to the literature on choice overload, we find a significantly positive effect of the display promotion on unit sales, which is stronger for stores with high variety. Further findings show a stronger promotion uplift for less popular products in stores with high variety on the display. This suggests that more variety may increase consumers’ willingness to try new products, when the financial risk is low. We also test for the effect of product distribution on displays by analysing the number of facings. Additionally, we introduce an approach to determine an optimal space allocation of products on the display. Our findings suggest that an even distribution results in the highest profits for the retailer. We contribute to the literature on variety for consumer choices by offering insights from actual purchases with store-level scanner data of display promotions.
Keywords:
variety; retailing; in-store display; field experiment;
JEL-Classification:
M31 Marketing; C23; C93; D12;
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Discussion Paper No. 403
June 28, 2023
Persecution and Escape
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We study the role of professional networks in facilitating emigration of Jewish academics dismissed from their positions by the Nazi government. We use individual-level exogenous variation in the timing of dismissals to estimate causal eects. Academics with more ties to early émigrés (emigrated 1933-1934) were more likely to emigrate. Early émigrés functioned as “bridging nodes” that facilitated emigration to their own destination. We also provide evidence of decay in social ties over time and show that professional networks transmit information that is not publicly observable. Finally, we study the relative importance of three types (family, community, professional) of social networks.
Keywords:
professional networks; high-skilled emigration; Nazi Germany; Jewish academics; universities;
JEL-Classification:
I20; I23; I28; J15; J24; N30; N34; N40; N44;
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Discussion Paper No. 402
War and Science in Ukraine
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We discuss the impacts of the Russian invasion on Ukrainian science. Using newly collected data, we show that the war has already had significant effects on science in Ukraine: research papers produced by Ukrainian scientists declined by about 10%, approximately 5% of the most prolific scientists are publishing with a foreign affiliation, 22% of top universities have faced destruction of physical capital, and international collaborations with Russian scientists have declined by more than 40%. Drawing upon the economics of science and innovation literature, we highlight three primary channels through which wars impact science: 1) the loss of human capital, 2) the destruction of physical capital, and 3) reductions in international scientific cooperation. The evidence from the literature on the long-run effects of losing human or physical capital indicates that shocks to physical capital can be remedied more easily than shocks to human capital. Our new data also suggests that human capital shocks are the main drivers of the reduction in Ukrainian research output that has occurred since the beginning of the war. Hence, reconstruction efforts should be focused on supporting scientists to continue in the research sector and to return to Ukraine after the war has ended.
Keywords:
war and science; scientific human capital; physical capital destruction; international migration; international scientific cooperation;
JEL-Classification:
H52; I23; I25; J44; J61; J62; O38; O52;
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Discussion Paper No. 401
June 16, 2023
The Lifecycle of Affirmative Action Policies and Its Effect on Effort and Sabotage Behavior
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A main goal of affirmative action (AA) policies is to enable disadvantaged groups to compete with their privileged counterparts. Existing theoretical and empirical research documents that incorporating AA can result in both more egalitarian outcomes and higher exerted efforts. However, the direct behavioral effects of the introduction and removal of such policies are still under-researched. It is also unclear how specific AA policy instruments, for instance, head-start for a disadvantaged group or handicap for the privileged group, affect behavior. We examine these questions in a laboratory experiment in which individuals participate in a real-effort tournament and can sabotage each other. We find that AA does not necessarily result in higher effort. High performers that already experienced an existing AA-free tournament reduce their effort levels after the introduction of the AA policy. Additionally, we observe less sabotage under AA when the tournament started directly with the AA regime. The removal of AA policies, however, significantly intensifies sabotage. Finally, there are no overall systematic differences between handicap and head-start in terms of effort provision or sabotaging behavior.
Keywords:
affirmative action; sabotage; experiment; tournament; handicap; head-start;
JEL-Classification:
C72; C91; D63; D72;
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Discussion Paper No. 400
June 15, 2023
Responsibility-Shifting through Delegation: Evidence from China’s One-Child Policy
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We provide evidence on how responsibility-shifting through delegation occurred in China’s implementation of the one-child policy. We show that trust in local governments was reduced when they were the primary enforcer of the policy (1979–1990), while trust in neighbors was reduced when civilians were incentivized to report neighbors’ violations of the policy to the authorities (1991–2015). This effect was more pronounced among parents of a firstborn daughter, who were more likely to violate the policy due to the deep-rooted son preference. This study provides the first set of field evidence on the responsibility-shifting effect of delegation.
Keywords:
delegation; responsibility-shifting; One-Child policy;
JEL-Classification:
D02; D04; D90; J18;
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Discussion Paper No. 399
May 26, 2023
Productivity Spillovers among Knowledge Workers in Agglomerations: Evidence from GitHub
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Software engineering is a field with strong geographic concentration, with Silicon Valley as the epitome of a tech cluster. Yet, most studies on the productivity effects of agglomerations measure innovation with patent data, thus capturing only a fraction of the industry's activity. With data from the open source platform GitHub, our study contributes an alternative proxy for productivity, complementing the literature by covering a broad range of software engineering. With user activity data covering the years 2015 to 2021, we relate cluster size to an individual's productivity. Our findings suggest that physical proximity to a large number of other knowledge workers in the same field leads to spillovers, increasing productivity considerably. In further analyses, we confirm the causal relationship with an IV approach and study heterogeneities by cluster size, initial productivity and project characteristics.
Keywords:
agglomeration effects; knowledge spillovers; open source; online collaboration;
JEL-Classification:
D62; J24; O33; O36; R32;
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Discussion Paper No. 398
Committee Deliberation and Gender Differences in Influences
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This paper provides empirical evidence on the aggregation of information in committees. We analyze unique data from the decision-making process of hiring committees within a large private company. In the hiring process, committee members first conduct independent one-to-one interviews and give individual recommendations before deliberating on a collective hiring decision. We find that committees’ final hiring decisions are systematically less aligned with the initial recommendations of women than with those of men, even though women and men are equally qualified and experienced. This disparity in influence is strongest when recommendations exhibit high disagreement and when a single woman deliberates with two men. The estimated distribution of influence reveals that almost all men are more influential than the median woman. We offer suggestive evidence that these findings have implications for the effectiveness of gender quotas.
Keywords:
committee decision-making; gender differences; hiring;
JEL-Classification:
D71; J16; M51;
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Discussion Paper No. 397
May 15, 2023
Management and Performance in the Public Sector: Evidence from German Municipalities
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We study management practices and performance in a representative sample of German municipalities, which provide the bulk of direct administrative services for citizens and firms in Germany. Surveyed municipalities differ substantially in their use of structured management practices, and this heterogeneity is also pronounced within all federal states, regional types, and population size brackets. Moreover, we document a systematic positive relationship between the degree of structured management and a diverse set of performance measures capturing municipalities' attractiveness for citizens and firms. Topic modelling (LDA) of survey responses suggests that the predominant management style is to use relatively little structured management.
Keywords:
management practices; public sector organizations; local government; municipal performance; state capacity; World Management Survey (WMS);
JEL-Classification:
D20; D73; H11; H73; R50;
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Discussion Paper No. 396
Antitrust and (Foreign) Innovation: Evidence from the Xerox Case
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How does antitrust enforcement against patent-based monopolies affect innovation? I address this question by empirically studying the US antitrust case against Xerox, the monopolist in the market for plain-paper copiers. In 1975, Xerox was ordered to license all its copier-technology patents in the US and abroad. I show that this promoted innovation by other firms in the copier industry, measured by a disproportionate increase in patenting in technologies where Xerox patents became available for licensing. This positive effect is driven by increased innovation by Japanese competitors. They started developing smaller desktop copiers and their innovation became more diverse.
Keywords:
antitrust; innovation; patents; compulsory licensing; Japan; Xerox;
JEL-Classification:
O30; O34; L41; K21;
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Discussion Paper No. 395
Pay Transparency in Organizations
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I study when a firm prefers to be transparent about pay using a simple multidimensional signaling model. Pay transparency within the firm means that a worker can learn about his own worker-firm match from another worker’s pay. This can either encourage or discourage workers—which affects retention—and so creates a trade-off for the firm when it commits to a level of transparency. The model pre- dicts that when few workers have a high worker-firm match, transparency is always preferred by the firm and becomes more favorable as the value of retaining these ‘star’ workers increases. This prediction is consistent with the firms in the field that choose to be internally transparent about pay. The model also predicts that transparency leads to pay compression, again consistent with evidence from the field.
Keywords:
pay transparency; bonus pay; multidimensional signaling; relative pay;
JEL-Classification:
D82; D86; J30; M52;