Discussion Paper No. 455
November 21, 2023
Measuring Science: Performance Metrics and the Allocation of Talent
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We study how performance metrics affect the allocation of talent. We exploit the introduction of a new measure of scientific performance: citation metrics. For technical reasons, the first citation database only covered citations from certain journals and years. Thus, only a subset of citations became visible, while others remained invisible. We identify the effects of citation metrics by comparing the predictiveness of visible to invisible citations. Citation metrics increased assortative matching between scientists and departments. We also find that highly-cited scientists in lower-ranked departments (“hidden stars”) benefited from citation metrics, while minorities did not. Citation metrics also affected promotion decisions.
Keywords:
performance metrics; allocation of talent; citations; scientists;
JEL-Classification:
J62, O31, J45; O31; J45;
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Discussion Paper No. 454
November 18, 2023
Decomposing Trust
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Trust is an important condition for economic growth and other economic outcomes. Previous studies suggest that the decision to trust is driven by a combination of risk attitudes, distributional preferences, betrayal aversion, and beliefs about the probability of being reciprocated. We compare the results of a binary trust game to the results of a series of control treatments that by design remove the effect of one or more of these components of trust. This allows us to decompose variation in trust behavior into its underlying factors. Our results imply that beliefs are a key driver of trust, and that the additional components only play a role when beliefs about reciprocity are sufficiently optimistic. Our decomposition approach can be applied to other settings where multiple factors that are not mutually independent affect behavior. We discuss its advantages over the more traditional approach of controlling for measures of relevant factors derived from separate tasks in regressions, in particular with respect to measurement error and omitted variable bias.
Keywords:
trust; omitted-variable bias; measurement error;
JEL-Classification:
C90; D90;
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Discussion Paper No. 453
Career Concerns As Public Good: The Role of Signaling for Open Source Software Development
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Much of today’s software relies on programming code shared openly online. Yet, it is unclear why volunteer developers contribute to open-source software (OSS), a public good. We study OSS contributions of some 22,900 developers worldwide on the largest online code repository platform, GitHub, and find evidence in favor of career concerns as a motivating factor to contribute. Our difference-in-differences model leverages time differences in incentives for labor market signaling across users to causally identify OSS activity driven by career concerns. We observe OSS activity of users who move for a job to be elevated by about 16% in the job search period compared to users who relocate for other reasons. This increase is mainly driven by contributions to projects that increase external visibility of existing works, are written in programming languages that are highly valued in the labor market, but have a lower direct use-value for the community. A sizable extensive margin shows signaling incentives motivate first-time OSS contributions. Our findings suggest that signaling incentives on private labor markets have sizable positive externalities through public good creation in open-source communities, but these contributions are targeted less to community needs and more to their signal value.
Keywords:
software; knowledge work; digital platforms; signaling; open source; job search;
JEL-Classification:
L17; L86; H40; J24; J30;
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Discussion Paper No. 452
November 13, 2023
In-utero Exposure to Violence and Child Health in Iraq
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This paper examines the impact of exposure to violence during pregnancy on anthropometric and cognitive outcomes of children in the medium-run. I combine detailed household-level data on more than 36,000 children with geo-coded information on civilian casualties in the aftermath of the US invasion of Iraq between 2003 and 2009 and exploit within mother differences in prenatal exposure to violence. I find that one violent incident during pregnancy decreases height and weight for age scores by 0.13 standard deviations and lowers cognitive and behavioral skills of children. Leveraging information on the severity, type and perpetrator of violence, I isolate the effect of stress from access to prenatal care. I show that the results hold when restricting attention to incidents with little impact on the local infrastructure and are largest for more stressful events; primarily those that target the civilian population and involve execution and torture.
Keywords:
stress; child health; Iraq;
JEL-Classification:
I12; J13; O15;
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Discussion Paper No. 451
Chinese Aid in Africa: Attitudes and Conflict
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This study examines Chinese aid projects’ impact on conflict and perceptions of China in 820 African districts from 2000 to 2012. We show that a 10% increase in Chinese aid projects results in a 6% increase in conflict incidents. This rise is mainly due to confrontations involving non-state actors, such as militias and rebel groups, and clashes between these groups and government forces. Civilian attitudes toward China’s presence do not drive this increase, as evidenced by both revealed and stated preferences. We find that Chinese aid does not provoke protests, riots, or strikes, nor does it amplify critical views among Africans regarding Chinese culture, resource extraction, or land acquisitions. Our evidence suggests that Africans attribute the rise in conflict to the interaction of resource influx and local politics, rather than to China itself, reflecting a discerning perspective on China’s influence on the continent.
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JEL-Classification:
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Discussion Paper No. 450
Asymmetric Models of Sales
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We broaden and develop the classic captive-and-shopper model of sales. Firstly, we allow for asymmetric marginal costs as well as asymmetric captive audiences. These asymmetries jointly determine the identities of the two or more firms we find compete (via randomized sales) to serve shoppers. In a leading case, the prices paid by shoppers fall following a cost rise for the firm that serves most of them. Secondly, we study asymmetric price adjustment opportunities via a two-stage game in which firms may cut but not raise their initial prices. In this setting (and in scenarios with risk aversion or endogenous move order) we predict the play of pure strategies and that a unique firm serves the shoppers. Despite the different pricing predictions across games, firms’ profits are equivalent. Welfare properties depend on whether firm asymmetry is predominantly on the supply side (costs) or on the demand side (captive audiences). Thirdly, we allow firms to choose production technologies via process innovations. One firm innovates distinctly more than others, attains a lower marginal cost, and ultimately serves the shoppers. We connect the distinctive asymmetric pattern of innovations to demand-side asymmetries and the shape of technology opportunity.
Keywords:
model of sales; captives; shoppers; price dispersion; clearinghouse models;
JEL-Classification:
D43; L11; M3;
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Discussion Paper No. 449
The Persistent Effect of Competition on Prosociality
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We present the first causal evidence on the persistent impact of enduring competition on prosociality. Inspired by the literature on tournaments within firms, which shows that competitive compensation schemes reduce cooperation in the short-run, we explore if enduring exposure to a competitive environment persistently attenuates prosociality. Based on a large-scale randomized intervention in the education context, we find lower levels of prosociality for students who just experienced a 2-year competition period. 4-year follow-up data indicate that the effect persists and generalizes, suggesting a change in traits and not only in behavior.
Keywords:
prosociality; competition; cooperation; social skills; socio-emotional skills; tournaments; comparative pay; incentive schemes;
JEL-Classification:
D64; C90;
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Discussion Paper No. 448
November 9, 2023
Mimicking the Opposition: Bismarck's Welfare State and the Rise of the Socialists
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This paper examines the consequences of a government mimicking the policy of its competitor by studying the introduction of the welfare state in 19th century Germany. The reform conducted by the conservative government targeted blue-collar workers and aimed to reduce the success of the socialist party. The result based on a difference-in-differences design shows that the socialist party benefited in elections due to the reform. The analysis of the mechanism points to the socialist's issue ownership by strengthening its reform orientation, which voters followed. The results are not driven by other political and economic channels related to the reform.
Keywords:
welfare state; socialism; government; opposition; issue ownership; voting behavior; Germany;
JEL-Classification:
D74; H53; I38; N44; P16;
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Discussion Paper No. 447
Reputational Concerns and Advice-Seeking at Work
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We examine the impact of reputational concerns on seeking advice. While seeking can improve performance, it may affect how others perceive the seeker's competence. In an online experiment with white-collar professionals (N=2,521), we test how individuals navigate this tradeoff and if others' beliefs about competence change it. We manipulate visibility of the decision to seek and stereotypes about competence. Results show a sizable and inefficient decline in advice-seeking when visible to a manager. Higher-order beliefs about competence cannot mediate this inefficiency. We find no evidence that managers interpret advice-seeking negatively, documenting a misconception that may hinder knowledge flows in organizations.
Keywords:
advice-seeking; reputational concerns; stereotypes; higher-order beliefs; knowledge flows; experiment;
JEL-Classification:
D16; D21; D83; D91; M51;
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Discussion Paper No. 446
Round-Number Effects in Real Estate Prices: Evidence from Germany
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Round numbers affect behavior in various domains, e.g., as prominent thresholds or focal points in bargaining. In line with earlier findings, residential real estate transactions in Germany cluster at round-number prices, but there are also interesting (presumably cultural) differences. We extend our analysis to the commercial real estate market, where stakes are even higher and market participants arguably more experienced. For the same type of object, professionals cluster significantly less on round-number prices compared to non-professionals. We employ machine learning and show that transactions of family homes and condominiums at round-number prices are 2–7% above their hedonic values.
Keywords:
round-number effects; focal points; residential real estate; commercial real estate; housing prices; machine learning;
JEL-Classification:
D01; D91; C78; R31;