A very busy summer for me this year, after last year’s ban on conferences to focus on doing experiments.
For me the summer started at the end of May with a research stay in Rennes, where I was invited by Eric Darmon and gave a talk about my research with Paolo Crosetto on how firms can profit from keeping consumers confused about how their product compares with the competition. A shorter version of my presentation is here. I blogged about it here. Paolo and I are putting the last touches to the paper before releasing it.
Rennes was a very enjoyable stay indeed, as Eric Darmon and I had very fruitful discussion about how far consumers would trust firms that advise them on what product to choose based on private information collected for example via an analysis of their behaviour on the Internet.
Right after returning, I participated in the Jena Science Slam, which I won! (blog post here)
End of June was a trip to Italy. Final destination was Alberobello and I stopped on the way for the marriage of Paolo Crosetto with beautiful Irene in Turin. I also visited Caterina Giannetti in Pisa and saw her supra-cute baby, Ana.
Alberobello was the location for the bi-annual industrial organization conference organized by the University of Salento. I presented my paper with Paolo on whether firms can collude to maintain a confusopoly. Particularly interesting presentations for me were in the field of behavioral IO: Anastasia Shchepetova on confusopolies, Giovani Ursino on deceptive advertising, and Sofronis Clerides on consumer inattention. There was also a plenary talk by Mark Armstrong that provided a summary of some efforts in modelling markets with uninformed consumers.
After two weeks back, it was the start of the Jena Summer School, with two parallel programs, one for the GK-EIC focused on innovation and the other for the IMPRS focused on experimental economics.
I was the happy adviser of the IMPRS team that won the group work contest, which involves running an experiment from idea generation to design, data gathering in the lab, analysis and presentation of findings, over 4 weeks. Their theme was investigating the difference between uncertainty and strategic uncertainty. See p. 13 here for a nice pic of the group.
The conference included a number of sessions of interest for me, notably a session I chaired and which focused on measures of subjective well-being (Hans-Jürgen Engelbrecht), whether governments should focus on increasing happiness (Christian Schubert) and how paternalism could be autonomy enhancing (Martin Binder).
The sessions I enjoyed most were however about history, notably talks by Mark Knell, Heinz Kurz and Harald Hageman with insights about the differences between Schumpeter and Keynes.
A very enlightening presentation was about the future of capitalism by Carlota Perez which predicted a new “Belle Epoque”, and a very dynamic talk was by Mariana Mazzucato on how firms, notably banks, socialize risks and privatise rewards. A bit too black and white for some, but I liked it all the same.
Finally, the summer ended with the ESA European conference in Prague, where I met many present and former members of the soon to be disbanded Max Planck Institute for Economics.
I presented two works of mine. The first was on confusopolies in the lab, which looks at the IO consequences of findings in a paper with Paolo that tests the strength and robustness of the attraction effect in consumer choice.
The second was about social preferences when faced with random wealth assignments mechanisms – also knowns as “catastrophes” in some circles :). I blogged about that work here but the paper I wrote at that time was very misguided and I completely changed my method of analysis, getting rid of the parametric assumptions about utility functions and focusing on non-parametric measures of risk aversion and their relation with lottery characteristics. Preparing this presentation was the occasion for me to make sense of two experiments I ran on that theme, and to plan for a third that will bind those two.
The most interesting presentation was that by Han Bleichrodt on PRINCE, the PRior INCEntive system. I intend to use his suggestions in my future experiment, with an easy adaptation to incentivizing two-person interactions rather than simply individual choice. I also liked a presentation by Claudia Neri on preferences for decision rights, which has some similarities with work by Nadine Chlass on purely procedural preferences.
Overall, a very busy summer indeed, during which co-authors Marian Panganiban and Ayu Okvitawanli also ran the sessions for our job market experiment on gender discrimination. We vary not only the composition of the hiring pool but also the composition of the hiring team and relate discrimination to a number of individual variables, including an Implicit Association Test between competence and masculinity.
Beyond work, I also spent week-ends in Leipzig and Dresden, went kayaking on the Saale, spent many evenings hanging in my hammock in Paradies Park and kept on improving my skills in chess. I reached what is now a pretty decent club player level and intend to take part in my first chess competition next year!
A really good picture of the Science Slam victory celebration with GSBC and MPI colleagues. The photographer managed to do a really good group picture. I will remember his technique to encourage people to do a wide smile: not the usual “Cheese!”, but stretching his own mouth wide with his fingers. It seems to have worked!
The videos of the 4th Jena Science Slam are also now online:
I am slammer number 4. I am not sure I like my presentation so much but at least it got people laughing. I was told I already won with the first picture in the presentation, which features THREE cats. Cats are for the win apparently!
In other remarks, it is surprising how things that appear to last only a second on the video seemed to go so much slower when I was on stage!
My (winning!) Jena Science Slam presentation, with notes in small character added. The title of my slam was “Why is shopping such a baffling ordeal, and what can you do about it?”. I am very thankful to the audience, they had amazing energy in their cheering and applause!
There should soon be videos of this year’s Slam on the Graduate Academy’s website. It will be funny to see how it looked like :)
I felt like giving a little primer on the results of an experiment that Paolo and I did in December, about the incentives for firms to confuse consumers. I was motivated by seeing the following recent article in JEBO:
“Consumer Myopia, Competition and the Incentives to Unshroud Add-on Information” by Tobias Wenzel
As in most (all?) articles on shrouding, this paper considers only the one stage game and finds as usual that firms will want to make their prices transparent… while ignoring the impact of collusion.
Yes, I did the same thing in my paper in Economica with Bob Sugden on spurious complexity and common standards (http://dx.doi.org/10.1111/j.1468-0335.2011.00895.x). But now, from a recent experiment with Paolo Crosetto where we test a similar model in the lab, we found that firms were quite able to collude not to unshroud after experiencing the horrors of an unshrouded equilibrium!
I am excited about writing up the results, as in fact, being able to choose to make prices transparent or not can help collusion compared to a standard setting with no possible shrouding, and this in two ways: by serving as a signal that one wishes to make peace with others, and also by making the punishment phase harder on those who deviate and unshroud. Once said, this looks obvious now, but I guess this has been missed by others than us, so I don’t feel so bad about missing it.
I will be working in the next month or so on writing up the results, but I am now busy finishing writing a paper on the relation between exit costs and incentives to exit in a repeated version of the public good game with imperfect public monitoring and stochastic outcomes. Very interesting, but it has been hell to find the correct perspective in writing about the experimental findings.