HEIKO KARLE August 2016

Transcription

1 HEIKO KARLE August 2016 Personal Data Name: Affiliations: Office: Dr Heiko Karle Postdoctoral Researcher, ETH Zurich, Center for Law and Economics ETH Zurich IFW E 45.2 Haldeneggsteig Zurich Switzerland Phone: Fax: hkarle@ethz.ch Website: Personal information: Citizenship German Education 09/ present ETH Zurich, Center for Law and Economics 09/ /2012 ECARES, Université Libre de Bruxelles (ULB) 08/2009 University of Mannheim, Doctoral degree in Economics 09/ /2009 Toulouse School of Economics (TSE), University of Toulouse 1, Ph.D. studies in Economics (visiting), Local Advisor: Jacques Crémer 10/ /2009 Center for Doctoral Studies in Economics (CDSE), University of Mannheim, Ph.D. studies in Economics, Advisors: Konrad Stahl and Ernst-Ludwig von Thadden 09/2005 University of Mannheim, Diploma degree in Economics (with distinction) 08/ /2004 University of California, Berkeley (UCB) Ph.D. courses in Economics (visiting) 04/ /2005 University of Mannheim, Undergraduate studies in Economics Honors and Scholarships 02/2010 Research Grant, The Impact of Contextual Reference Dependence on Purchase Decisions: An Experimental Study (9775 ), National Bank of Belgium (BNB) 10/ /2009 Doctoral Studies Fellowship, German Research Foundation (DFG) 08/ /2004 Fellowship from German Academic Exchange Association (DAAD) and McKinsey & Co. for studies at the University of California, Berkeley Fields Industrial Organization, Contract Theory, Behavioral Economic Theory Publications (details on page 6) A. Competition under Consumer Loss Aversion with Martin Peitz RAND Journal of Economics 45(1), 1-31 (2014).

2 HEIKO KARLE, page 2 of 8 B. Loss Aversion and Consumption Choice: Theory and Experimental Evidence with Georg Kirchsteiger and Martin Peitz American Economic Journal: Microeconomics 7(2), (2015). C. Signaling Quality with Increased Incentives with Heiner Schumacher and Christian Staat European Economic Review 85, 8-21 (2016). Working Papers 1. Ownership and Control in Differentiated Product Markets, 2011, CEPR Discussion Paper, 8277 with Tobias Klein and Konrad Stahl 2. Advertising and Attachment: Exploiting Loss Aversion through Pre-Purchase Information, 2014, CER-ETH Zurich Working Paper, with Heiner Schumacher (former title: Advertising Content when Consumers are Loss Averse) 3. Incomplete Contracting, Renegotiation, and Loss Aversion, 2014, CEPR Discussion Paper, 9874 with Fabian Herweg and Daniel Müller 4. The Structure of Negotiations: Incomplete Agreements and the Focusing Effect, 2015 SSRN Discussion Paper, with Andrea Canidio 5. De-Targeting: Advertising an Assortment of Products to Loss-Averse Consumers, 2016 CEPR Discussion Paper, R&R at the European Economic Review with Martin Peitz 6. Selling in Advance to Loss-Averse Buyers with Marc Möller Work in Progress 7. Selling Information: Newspaper Competition and Media Slant with Johannes Dittrich and Heiner Schumacher 8. Student Performance and Loss Aversion: Evidence from a Class Room Experiment with Dirk Engelmann and Martin Peitz 9. Segmentation or Agglomeration: Platform Markets with Competing Sellers with Martin Peitz and Markus Reisinger 10. Settlement Offers with Heiner Schumacher and Rune Volund Refereeing Activities Review of Economic Studies (REStud), RAND Journal of Economics (RJE), Journal of Economic Theory (JET), Journal of the European Economic Association (JEEA), Games and Economic Behavior (GEB), International Economic Review (IER), European Economic Review (EER), Journal of Industrial Economics (JINDEC), International Journal of Industrial Organization (IJIO), Journal of Economic Behavior & Organization (JEBO), Journal of Law, Economics & Organization (JLEO), Scandinavian Journal of Economics (SJE), Journal of Risk and Insurance (JRI), Journal of Economic Psychology (JOEP) Presentations 2016 Econometric Society, African Meeting, Mpumalanga, South Africa; Paper 9. Swiss Theory Day, Zurich, Switzerland; Paper 9. Seminar, University of Bayreuth, Germany; Paper 9. Swiss IO Day, Bern, Switzerland; Paper 9.

3 HEIKO KARLE, page 3 of 8 Seminar, Frankfurt School of Finance & Management, Germany; Paper 2. Internal Micro Seminar, University of Zurich, Switzerland; Paper 9. Seminar, UCL, Louvain-la-Neuve, Belgium; Paper UECE Lisbon Meetings on Game Theory, Lisbon, Portugal; Paper 4. DICE, Heinrich Heine University of Düsseldorf, Germany; Paper C. EARIE Conference, Munich, Germany; Paper 4. World Congress of the Econometric Society, Montreal, Canada; Paper 4. ISNIE Conference, Harvard Law School, Cambrigde, USA; Paper 4. LEMO Seminar, NHH Bergen, Norway; Paper 4. Internal Seminar Center for Law and Economics, ETH Zurich, Switzerland; Paper 5. Social Norms and Institutions, Ascona, Switzerland; Paper 4. Zurich-Basel Workshop Micro Theory, University of Zurich, Switzerland; Paper 5. SFB/Tr 15 Seminar, WZB, Berlin, Germany; Paper C. CES Seminar, KU Leuven, Belgium; Paper C. Economics Workshop, MPI for Collective Goods, Bonn, Germany; Paper Research Seminar, Econ Department, University of Bern; Paper 4. UECE Lisbon Meetings on Game Theory, Lisbon, Portugal; Paper C. Internal Seminar Center for Law and Economics, ETH Zurich, Switzerland; Paper 4. NCBEE, Aarhus, Denmark; Paper 4. EARIE Conference, Milan, Italy; Paper C. International Conference on Game Theory, Stony Brook, USA; Paper 3. Workshop of Intellectual Property, Castle Ringberg, Germany; Paper 4. IIOC Annual Conference, Chicago, USA; Paper C. Royal Economic Society, Annual Meeting, Manchester, UK; Paper 3. Research Seminar in Economics, WHU, Vallendar, Germany; Paper B. Micro Workshop, LMU Munich, Germany; Paper 4. Zurich-Basel Workshop in Micro Theory, University of Zurich, Switzerland; Paper Christmas Meeting, German Economists Abroad, Konstanz, Germany; Paper B. Internal Seminar Center for Law and Economics, ETH Zurich, Switzerland ; Paper 4. Internal Micro Seminar, University of Zurich, Switzerland; Paper C. Workshop on Reference Dependent Preferences & Self Control, Aarhus, Denmark; Paper B. Annual Meeting Verein für Socialpolitik, DICE, Düsseldorf, Germany; Paper B. EARIE Conference, Evora, Portugal; Paper B. ESA World Meetings, University of Zurich, Switzerland; Paper B. European Summer Symposium in Economic Theory, Study Center Gerzensee, Switzerland (attendance, second week, Behavioral Mechanism Design) Research Seminar in Applied Microeconomics, University of Cologne, Germany; Paper 3. Workshop of Intellectual Property, Castle Ringberg, Germany; Paper 7. Internal Micro Seminar, University of Zurich, Switzerland; Paper Internal Seminar Center for Law and Economics, ETH Zurich, Switzerland; Paper B. Experimental and Behavioral Econ Seminar, University of Zurich, Switzerland; Paper B. Annual Meeting Verein für Socialpolitik, University of Göttingen, Germany; Paper 2. EARIE Conference, Rome, Italy; Paper 2. ICT Conference, ZEW, Mannheim, Germany; Paper 2. Economics Workshop, DICE, Heinrich Heine University of Düsseldorf, Germany; Paper 2. Theory Workshop, Thema, Université de Cergy-Pontoise, Paris, France; Paper 2. Experimental Economics Seminar, Mannheim, Germany; Paper B. Economic Seminar, CORE, UCL, Louvain-la-Neuve, Belgium; Paper Christmas Meeting, German Economists Abroad, ESMT, Berlin, Germany; Paper 2. Internal Seminar Center for Law and Economics, ETH Zurich, Switzerland; Paper 2. Brown Bag Lunch Seminar, Innsbruck, Austria; Paper B. Economics Workshop, MPI for Collective Goods, Bonn, Germany; Paper 2. ASSET Annual Conference, Evora, Portugal; Paper B. Internal Seminar, ECARES, ULB, Brussels, Belgium; Paper 2. SFB/Tr 15 Seminar, Mannheim, Germany; Paper 2. Workshop on Behavioral Economics, Mainz, Germany; Paper 2.

4 HEIKO KARLE, page 4 of 8 EARIE, Annual Conference, Stockholm, Sweden; Paper A. Maastricht Behavioral and Experimental Economics Symposium - Theory and Experiments, Maastricht University, Netherlands; Paper B. CEPR Applied IO School, Tel Aviv University, Israel; Paper A Economics Workshop, University of Edinburgh, United Kingdom; Paper A. World Congress of the Econometric Society, Shanghai, China; Paper A. European Summer Symposium in Economic Theory, Study Center Gerzensee, Switzerland (mere attendance, first week) Conference to Honor of Jacques Thisse, CORE, UCL, Louvain-la-Neuve, Belgium; Paper 1. Economics Seminar, FUNDP, Namur, Belgium; Paper A Brown Bag Seminar, TSE, Toulouse, France; Paper A. EEA-ESEM Annual Conference, Barcelona, Spain; Paper A. European Summer Symposium in Economic Theory, Study Center Gerzensee, Switzerland (mere attendance, first week) ECORE Summer School, ECARES, ULB, Brussels, Belgium; Paper A. SFB/Tr 15 Spring Conference, Berlin/Caputh, Germany; Paper A. CDSE Seminar, Mannheim, Germany; Paper C. SMYE Annual Conference, Istanbul, Turkey; Paper A. IIOC Annual Conference, Boston, USA; Paper A. Economics Seminar, ECARES, ULB, Brussels, Belgium; Paper A. ENTER Jamboree, UCL, London, United Kingdom; Paper A SFB/Tr 15 Fall Conference, Corporate Governance, Munich, Germany; Paper 1. SFB/Tr 15 Seminar, Mannheim, Germany; Paper 1. EARIE Annual Conference, Toulouse, France; Paper 1. Workshop on Economics of Advertising and Marketing, Bad Homburg, Germany; Paper A GESY Summer School, Contract Theory, with Patrick Bolton and Mathias Dewatripont, Bronnbach, Germany; Paper 1. CDSE Seminar, Mannheim, Germany; Paper 1. Teaching Experience Winter Term 2014: Behavioral Economics, Bachelor level, University of Bern Summer Term 2012: Topics in Contract Theory, Ph.D. level, Lecture (partial replacement for Prof. Mathias Dewatripont), ECARES (ULB) Summer Term 2011: Topics in Contract Theory, Ph.D. level, Lecture (partial replacement for Prof. Mathias Dewatripont), ECARES (ULB) Summer Term 2010: Topics in Contract Theory, Ph.D. level, Lecture (partial replacement for Prof. Mathias Dewatripont), ECARES (ULB) Winter Term 2009: Advanced Industrial Organization, Ph.D. level, Invited lecture for Prof. Estelle Cantillon and Prof. Patrick Legros, ECARES (ULB) Summer Term 2009: Microeconomics 1, Bachelor level, T.A. to Prof. Ernst-Ludwig von Thadden, University of Mannheim Winter Term 2007: Industrial Organization, Ph.D. and Master level, T.A. to Prof. Martin Peitz and Prof. Konrad Stahl, University of Mannheim Principles of Economics, Bachelor level, T.A. to Prof. Klaus Conrad, University of Mannheim Summer Term 2007: Microeconomics 1, Bachelor level, T.A. to Prof. Ernst-Ludwig von Thadden, University of Mannheim Winter Term 2002: Microeconomics 2, Bachelor level, Student T.A. to Prof. Oliver Kirchkamp, University of Mannheim Work Experience 03/ /2005 KfW Bankengruppe, Frankfurt a.m., Germany Internship in the Economic Research Department, Private Equity

5 HEIKO KARLE, page 5 of 8 07/ /2004 Deutsche Bundesbank, Frankfurt a.m., Germany Internship in the Department of Statistics, Deposit and Credit Interest Rates Language Skills German (native), English (fluent), French (moderate spoken; good written) References Prof. Patrick Legros, Ph.D. ECARES, Université Libre de Bruxelles (ULB) 1050 Brussels, Belgium plegros@ulb.ac.be +32(0) Prof. Dr. Martin Peitz University of Mannheim Mannheim, Germany martin.peitz@googl .com +49(0) Prof. Georg Kirchsteiger, Ph.D. ECARES, Université Libre de Bruxelles (ULB) 1050 Brussels, Belgium gkirchst@ulb.ac.be +32(0) Prof. Dr. Armin Schmutzler University of Zurich 8006 Zurich, Switzerland armin.schmutzler@econ.uzh.ch +41(0) Prof. Dr. Stefan Bechtold ETH Zurich 8092 Zurich, Switzerland sbechtold@ethz.ch +41(0)

6 HEIKO KARLE, page 6 of 8 HEIKO KARLE A. Competition under Consumer Loss Aversion with Martin Peitz RAND Journal of Economics 45(1) (2014). We address the effect of expectation-based consumer loss aversion on firm strategy in imperfect competition. Consumers are fully informed about match value and price at the moment of purchase. However, some consumers are initially uninformed about their tastes and form a reference point consisting of an expected match-value and price distribution, whereas others are perfectly informed all the time. We show that if firms have symmetric costs, a larger share of informed consumers leads to a more competitive outcome. The reverse holds if cost asymmetry in duopoly is sufficiently large. B. Loss Aversion and Consumption Choice: Theory and Experimental Evidence with Georg Kirchsteiger and Martin Peitz American Economic Journal: Microeconomics 7(2), (2015). In this paper, we analyze a consumer choice model with price uncertainty, loss aversion, and expectation based reference points. The implications of this model are tested in an experiment in which participants have to make a consumption choice between two sandwiches. We make use of the fact that participants differ in their reported taste for the two sandwiches and the degree of loss aversion, which we measure separately. We find that more loss averse participants are more likely to opt for the cheaper sandwich, in line with theoretical predictions. The estimates in the model with rational expectations are slightly more significant than those in the model with naive expectations. C. Signaling Quality with Increased Incentives with Heiner Schumacher and Christian E. Staat European Economic Review 85, 8-21 (2016). Previous work on informed-principal problems with moral hazard suggested that the principal should signal project quality by retaining a larger share of the project and hence lowering incentives for the agent. We show that this view is incomplete. If project quality and effort are complements and effort is more valuable for high-quality projects, a principal with a high-quality project may separate from a principal with a low-quality project by increasing incentives for the agent. This holds with a risk-neutral agent who is protected by limited liability as well as with a risk-averse agent and unlimited liability. A dynamic version of our model in which the agent learns project quality in later periods provides an explanation for the use of initially reduced royalty rates in business-format franchising contracts. 1. Ownership and Control in Differentiated Product Markets, 2011, CEPR Discussion Paper, 8277 with Tobias Klein and Konrad Stahl We study a differentiated product market in which an investor initially owns a controlling stake in one of two competing firms and may acquire a non-controlling or a controlling stake in a competitor, either directly using her own assets, or indirectly via the controlled firm. While industry profits are maximized

7 HEIKO KARLE, page 7 of 8 within a symmetric two product monopoly, the investor attains this only in exceptional cases. Instead, she sometimes acquires a non-controlling stake. Or she invests asymmetrically rather than pursuing a full takeover if she acquires a controlling one. Generally, she invests indirectly if she only wants to affect the product market outcome, and directly if acquiring shares is profitable per se. 2. Advertising and Attachment: Exploiting Loss Aversion through Pre-Purchase Information, 2014, CER-ETH Zurich Working Paper, with Heiner Schumacher (former title: Advertising Content when Consumers are Loss Averse) We analyze a monopolist s optimal advertising strategy when consumers are expectation-based loss averse and uncertain about their individual match value with the product. Advertising provides verifiable match value information. It modifies the consumers reference point and hence their willingness to pay for the product. We show that the optimal advertising strategy pools different consumer types so that some consumers engage into ex-ante unfavorable trade. Incomplete informative advertising thus has a persuasive effect. Transparency policies that force the monopolist to provide full match information in advertisements increase consumer surplus. 3. Incomplete Contracting, Renegotiation, and Loss Aversion, 2014, CEPR Discussion Paper, 9874 with Fabian Herweg and Daniel Müller We consider a simple trading relationship between an expectation-based loss-averse buyer and a profitmaximizing seller. When writing a long-term contract the parties have to rely on renegotiation in order to ensure materially efficient trade ex post. If the buyer expects renegotiation always to take place, the parties are always able to implement the materially efficient good ex post. Expecting materially efficient trade, however, is often not in the buyer s interest, because ex post the seller can opportunistically exploit the buyer s attachment to the expected outcome of renegotiation. In other words, incomplete contracts create a new type of hold-up problem if the buyer is expectation-based loss averse. If credible, the buyer prefers to expect not to renegotiate, which gives rise to ex post inefficiencies. The optimal contract trades off maximizing standard efficiency and minimizing variations in the default outcome and thereby also minimizing the ex ante expected losses. 4. The Structure of Negotiations: Incomplete Agreements and the Focusing Effect, 2015 SSRN Discussion Paper, with Andrea Canidio We study negotiations between players having context-dependent preferences. We show that the players may negotiate in stages, by first signing an incomplete agreement and then finalizing the outcome of the negotiation, which never happens when players are fully rational. Furthermore, if preferences are context dependent because of the focusing effect, incomplete agreements are used to eliminate extreme, offequilibrium outcomes from the possible bargaining solutions. This remains true when previous incomplete agreements can be renegotiated or ignored. 5. De-Targeting: Advertising an Assortment of Products to Loss-Averse Consumers CEPR Discussion Paper, R&R at the European Economic Review with Martin Peitz We consider product markets in which consumers are interested only in a specific product category and initially do not know which product category matches their tastes. Using sophisticated tracking

8 HEIKO KARLE, page 8 of 8 technologies, an intermediary can make inferences about a consumer's preferred product category and offer advertising firms the possibility to target their ads to match the consumer's taste. Such targeting reduces overall advertising costs and, as a direct effect, increases industry profits. However, as we show in this paper, when consumers form reference prices and are loss averse, more precise targeting may intensify competition between firms. As a result, firms may earn higher profits from de-targeted advertising; i.e., when the intermediary deliberately informs about some products and their price quotes from outside a consumer's preferred product category. 6. Selling in Advance to Loss-Averse Buyers with Marc Möller This paper considers the influence of consumer loss aversion on firm conduct and market structure in settings with an advance purchase option. Examples include transportation or entertainment tickets as well as seasonal or new products. We show that loss aversion has an anti-competitive effect on prices and a pro-competitive effect on advance purchase discounts. Accounting for loss aversion delivers the novel insight that advance selling can be especially prevalent in those markets where its welfare consequences are most detrimental. In addition, predictions about the market's tendency to monopolize must be adjusted upwards for markets with high uncertainty and downwards for markets with low uncertainty. 7. Selling Information: Newspaper Competition and Media Slant with Johannes Dittrich and Heiner Schumacher We develop a model of a two-sided media market, in which profit-maximizing media outlets first commit to the degree of horizontal and vertical differentiation of their news reports and then compete in prices and fees for users and advertisers. We find that media outlets maximally differentiate only in one dimension in case they are financed by advertising revenues and direct charges to consumers (Pay-TV broadcasting). In case media outlets revenues consist solely of advertising revenues (Free-to-air broadcasting), differentiation will still be only in one dimension but less than maximum. Furthermore, horizontal differentiation is more likely to arise than vertical differentiation in this case. Interpreting horizontal differentiation of news reports as ideological bias (Mullainathan and Shleifer, 2005) and vertical differentiation as facts bias (Gentzkow and Shapiro, 2011), we predict that the transition from Pay-TV to Free-to-air broadcasting reduces the magnitude of both sorts of media bias and renders the regime of facts (ideological) bias less (more) likely to arise. 9. Segmentation or Agglomeration: Platform Markets with Competing Sellers with Martin Peitz and Markus Reisinger Two competing non-differentiated platforms bring together sellers and buyers who face the discrete choice problem which platform to visit. Platforms charge listing fees to sellers for their service. If competition between sellers is soft, only agglomeration equilibria exist, i.e. all sellers and buyers locate on one platform. By contrast, if competition between sellers is fierce, in the unique equilibrium, buyers and sellers segment, and sellers enjoy a monopoly position vis-a-vis buyers. This allows platforms to obtain strictly positive profits in equilibrium. If competition between sellers is moderate, in the unique equilibrium, buyers and sellers segment with positive probability. This equilibrium features dispersion of listing fees. We characterize the equilibrium and extend the analysis to allow for multi-homing sellers and buyers.