Discussion Papers

Discussion Paper No. 492
February 13, 2024

Interpersonal Preferences and Team Performance: The Role of Liking in Complex Problem Solving

Author:

Timm Opitz (MPI-IC)

Abstract:

Organizations increasingly rely on teams to solve complex problems. The ability of teams to work well together is critical to their success. I experimentally test whether team performance is affected by whether team members like each other. I find that teams in which partners like each other do not outperform teams in which partners dislike each other. However, teams in which one partner likes the other more than the other perform best. The performance differences result directly from changes in collaborative behavior when learning the team partner's interpersonal preferences, not indirectly from interacting with different individuals. Participants do not anticipate this pattern and expect to be most successful in a team where partners like each other. This provides insights into how teams should be optimally composed, when self-selection may be detrimental to performance, and what information about others' interpersonal preferences should be revealed.

Keywords:

interpersonal preferences; teamwork; liking; complex problem solving; non-routine tasks;

JEL-Classification:

C92; D23; D83; D91;

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Discussion Paper No. 491
January 30, 2024

The Formation of Subjective House Price Expectations

Author:

Sarah Kiesl-Reiter (ifo Institute)
Melanie Lührmann (Royal Holloway, University of London)
Jonathan Shaw (Institute for Fiscal Studies, London)
Joachim Winter (LMU Munich)

Abstract:

Subjective house price expectations drive individual housing choices and market dynamics. We study the formation of subjective expectations about local house prices using novel survey data from Britain, a country with high homeownership rates and widely varying local housing dynamics. There is a substantial and heterogeneous perception gap and individuals extrapolate strongly from perceived but not from realized past price changes. In addition, expectations are predicted by wider, easily observable measures of local economic conditions, especially among individuals with low financial sophistication. Individuals residing in local housing markets where past prices are less informative or less observable rely more strongly on local economic conditions in their belief formation. Our results emphasize the role of heterogeneity in expectations formation processes, and their underlying information set.

Keywords:

subjective expectations; housing markets; local economic conditions;

JEL-Classification:

D12; D84;

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Discussion Paper No. 490
January 15, 2024

Workplace Connections and Labor Migration: The Role of Information in Shaping Expectations

Author:

Michelle Hansch (HU Berlin)
Jan Nimczik (ESMT, RFBerlin, IAB, IZA)
Alexandra Spitz-Oener (HU Berlin, RFBerlin, IAB, IZA)

Abstract:

In a context where improved employment outcomes entail relocating to a new destination, how does information from former coworkers alter workers’ labor migration decisions? We explore this question using the unique backdrop of German reunification in the early 1990s. For former workers of the German Democratic Republic (GDR), improving employment outcomes typically meant relocating to West Germany, which most were reluctant to do. We show that information from former GDR coworkers in West Germany significantly increased the employment probability of East Germans in West Germany. To identify these network effects, we document and exploit that GDR workers were as-good-as randomly assigned to networks by the GDR system from the perspective of the West German market economy. We then establish that the networks only trigger migration responses among East Germans whose contacts had positive work experiences in the West and were similar in their earnings potential in the market-based economy of reunified Germany. These contacts, in essence, serve as role models for the workers’ prospects in the West, leading workers to trust the advice and assessments provided and ultimately altering the expected benefits from labor migration for the specific worker.

Keywords:

JEL-Classification:

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Discussion Paper No. 489
December 29, 2023

How to Increase Public Support for Carbon Pricing

Author:

Andrej Woerner (LMU Munich)
Taisuke Imai (University of Osaka)
Davide Pace (LMU Munich)
Klaus Schmidt (LMU Munich)

Abstract:

The public acceptability of a carbon price depends on how the revenues from carbon pricing are used. In a fully incentivised experiment with a large representative sample of the German population, we compare five different revenue recycling schemes and show that support for a carbon price is maximised by a “Climate Premium” that pays a fixed, uniform, upfront payment to each person. This recycling scheme receives more support than tax and dividend schemes, than using revenues for the general budget of the government, and than earmarking revenues for environmental projects. Furthermore, we show that participants and experts underestimate the public support for carbon pricing.

Keywords:

carbon pricing; pigovian taxation; political support for carbon taxes; survey experiments;

JEL-Classification:

H23; P18; C9; D9;

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Discussion Paper No. 488
December 20, 2023

Automatability of Occupations, Workers' Labor-market Expectations, and Willingness to Train

Author:

Philipp Lergetporer (TU München)
Katharina Wedel (ifo Institut)
Katharina Werner (ifo Institut)

Abstract:

We study how beliefs about the automatability of workers' occupation affect labor-market expectations and willingness to participate in further training. In our representative online survey, respondents on average underestimate the automation risk of their occupation, especially those in high-automatability occupations. Randomized information about their occupations’ automatability increases respondents’ concerns about their professional future, and expectations about future changes in their work environment. The information also increases willingness to participate in further training, especially among respondents in highly automatable occupation (+five percentage points). This uptick substantially narrows the gap in willingness to train between those in high- and low-automatability occupations.

Keywords:

automation; further training; labor-market expectations; survey experiment; information;

JEL-Classification:

J24; O33; I29; D83;

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Discussion Paper No. 487

More than Joints: Multi-Substance Use, Choice Limitations, and Policy Implications

Author:

Michelle Sovinsky (University of Mannheim)
Liana Jacobi (University of Melbourne)
Alessandra Allocca (LMU Munich)
Tao Sun (University of Melbourne)

Abstract:

As illicit substances move into the legal product space, substitution patterns with legal products become more salient. In particular, marijuana legalization may have implications for the use of other legal “sin” goods. We estimate a structural model of multi-product use of illegal and legal substances considering joint use, limited access to illicit products, and persistence in use. We focus on a young person’s choice to consume marijuana, alcohol or cigarettes (and possible combinations), and we find that sin goods are complements. Furthermore, our findings emphasize the necessity of accounting for joint consumption and access to obtain correct price sensitivity estimates. Post-legalization, youth marijuana use would increase from 25% to 37%. However, counterfactual results show that a combination of (reasonable) tax increases on all goods along with enforcement against illegal use can potentially revert use to pre-legalization levels. The earlier the tax increases are implemented the more effective they are at curbing future use. Our results inform the policy debate regarding the impact of marijuana legalization on the long-term use of sin goods.

Keywords:

complementarity, marijuana legalization, limited choice sets, data restrictions, discrete choice models; marijuana legalization; limited choice sets; data restrictions; discrete choice models;

JEL-Classification:

C11; D12; L15; K42; H02; L66; C35;

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Discussion Paper No. 486

Self-control and Performance while Working from Home

Author:

Julia Baumann (Wirtschaftszentrum Berlin für Sozialforschung)
Anastasia Danilov (HU Berlin)
Olga Stavrova (Universität Lübeck)

Abstract:

This study explores the role of trait self-control in individuals’ changes in performance and well-being when working from home (WFH). In a three-wave longitudinal study with UK workers in the midst of the COVID-19 pandemic, we find that low self-control workers experienced a significant positive adjustment to WFH over time: The number of reported work distractions decreased, and self-assessed performance increased over the period of four months. In contrast, high self-control individuals did not show a similar upward trajectory. Despite the positive adjustment of low self-control individuals over time, on average, self-control was still positively associated with performance and negatively associated with work distractions. However, trait self-control was not consistently associated with changes in well-being. These findings provide a more nuanced view on trait self-control, suggesting that low self-control individuals can improve initial performance over time when working from home.

Keywords:

self-control; working from home; productivity;

JEL-Classification:

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Discussion Paper No. 485

Use of Digital Technologies for HR Management in Germany: Survey Evidence

Author:

Marina Chugunova (Max Planck Institute for Innovation and Competition)
Anastasia Danilov (HU Berlin)

Abstract:

Using a survey with 57 German firms, we evaluate the level of digitalization of the human resource management (HRM) function and document perceived benefits and barriers of technology adoption from organizational and individual users’ perspectives. The results give reason for optimism. Most of the companies report that the core HR processes are digitized. We do not observe adverse effects of the digital HRM tools on users’ job satisfaction and work stress. Still, more than half of companies do not yet use digital tools for strategic HRM decisions. Respondents appreciate the increased speed and cost-efficiency of digital HR processes and associate them with a competitive advantage in talent acquisition. The most prominent barriers to adoption are lack of qualified professionals, high costs, and uncertainty regarding the legal framework. Additionally, we test whether small and medium-sized enterprises differ systematically from larger organizations in how they use digital HRM tools.

Keywords:

digital HRM tools; human resource management; digitalization; Germany;

JEL-Classification:

M12; M15; M50; O33; O52;

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Discussion Paper No. 484

Minority Protection in Voting Mechanisms – Experimental Evidence

Author:

Dirk Engelmann (HU zu Berlin)
Hans Peter Grüner (University of Mannheim)
Timo Hoffmann ()
Alex Possajenikov (University of Nottingham)

Abstract:

Under simple majority voting an absolute majority of voters may choose policies that are harmful to minorities. It is the purpose of sub- and super-majority rules to protect legitimate minority interests. We study how voting rules are chosen under the veil of ignorance and whether there are systematic biases in these choices. In our experiment, individuals choose voting rules for given distributions of gains and losses that can arise from a policy, but before learning their own valuation of the policy. We find that subjects on average adjust the voting rule in line with the skewness of the distribution. As a result, a higher share of the achievable surplus can be extracted with the suggested rules than with exogenously given simple majority voting. While the rule choices are not significantly biased towards under- or overprotection of the minority, towards majority voting or towards status-quo preserving rules, they only imperfectly reflect the distributions of benefits and costs. In expectation this leads to only 63% of the surplus being extracted. The participants are heterogeneous with respect to how well their rule choices adapt to the distribution of valuations, with a large share of the surplus loss caused by a small group of participants.

Keywords:

minority protection; voting; experiments;

JEL-Classification:

D72; C91;

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Discussion Paper No. 483

Are Women in Science Less Ambitious than Men? Experimental Evidence on the Role of Gender and STEM in Promotion Applications

Author:

Müge Süer (HU Berlin)

Abstract:

The gender wage gap is to a significant extent driven by gender-based job segregation. One of the potential culprits can be found in supply-side behavioral differences in promotion applications. In this study, using a controlled lab experiment, we disentangle the roles of gender, field of study, and task difficulty in promotion application decisions. Our study pro- vides three crucial findings. First, gender differences in self-limiting promotion application behavior are only present in STEM field students when exposed to a male task. Specifi- cally, when an easier alternative is available, women are less willing to apply for promotions concerning harder tasks than men. Second, there exists no significant difference between men’s and women’s willingness to apply for promotion concerning female jobs in STEM or non-STEM fields. Third, we find that previously reported gender differences in confidence are present only between STEM field students. The results also suggest that self-sorting into positions does not cause a decrease in overall welfare, however, it causes fewer promotions for women in STEM. We finally propose an easy-to-implement policy intervention to close the gender gap in STEM students when applying for a promotion.

Keywords:

gender differences; promotion application; self-limiting behavior; hierarchical segregation; STEM; male task; experiment;

JEL-Classification:

D91; J16; J62; C91;

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