Research foci

The Department of Economics deals with topics in applied microeconomics. The main research areas are inequality, redistribution, fairness, discrimination, reforms, social preferences as well as social identities, markets, market behaviour, institutions, reputation systems, valuation behaviour, fake valuations, cooperation and efficiency.

The aforementioned research foci are methodologically addressed by applying behavioural economics, microeconomics, game theory, simulations and empirical methods such as experimental economics (online and laboratory experiments).

Interdisciplinarity is intrinsic to the basic understanding of research in the department. Depending on the research question, there is cooperation and joint research with colleagues from the disciplines of economics, business administration, mathematics, physics, psychology, sociology and political science.

In addition, other topics on basic research as well as current issues are dealt with.

Inequality and the resulting need for redistribution is a highly relevant political economy research area that electrifies not only the various research disciplines, but also politics and society. In particular, our research focuses on redistributive preferences, framing, minimum income, transparency of redistribution, fairness, middle class and efficiency. Methodologically, we use behavioural economics, microeconomics, game theory, simulations and experimental econom

Literature:

Tepe, M., Paetzel, F., Lorenz, J. and Lutz, M. (2021): Efficiency Loss and Support for Income Redistribution: Evidence from a Laboratory Experiment. Rationality and Society 33: 313-340.

Paetzel, F., Lorenz, J. and Tepe, M. (2018): Transparency diminishes framing-effects in an experiment on voting and redistribution. European Journal of Political Economy 55: 169-184.

Lorenz, J., Paetzel F. and Tepe M. (2017): Just don't call it a tax! Framing in an experiment on voting and redistribution. Journal of Experimental Political Science 4(3): 183-194.

Kittel, B., Paetzel,F. and Traub, S. (2015): Competition, Income Distribution, and the Middle Class: An Experimental Study. Journal of Applied Mathematics 501. 

Lorenz J., Paetzel F. and Schweitzer F. (2013): Redistribution Spurs Growth by Using a Portfolio Effect on Risky Human Capital. PLoS ONE 8(2): e54904.

Reputation systems are an important and elementary component of many markets and online platforms. In this section, the functioning of reputation systems as well as their susceptibility to fake evaluations and possible solutions are discussed (also see: LINK to project).

Literature:

Krügel, P. and Paetzel, F. (2022): The Impact of Fraud on Reputation Systems. SSRN Working Paper.

Greiff, M. and Paetzel, F. (2020): Information About Average Evaluations Increases Efficiency: An Experiment on Noisy Reputation Systems. Journal of Economic Behavior and Organization 180: 334-356.

Greiff, M. and Paetzel, F. (2016): Second-Order Beliefs in Reputation Systems with Endogenous Evaluations – An Experimental Study. Games and Economic Behavior 97: 32-43.

Greiff, M. and Paetzel, F. (2015): Incomplete Information Strengthens the Effectiveness of Social Approval. Economic Inquiry 53(1): 557-573. 

Social identities have an immense influence on decision-making behaviour. For some time now, social identities have been changing - individuals identify more with new social subgroups and less with, for example, their income class or a particular political party. Some even see an age of changing social identities. Wherever social identities change, there is always a danger that discrimination will emerge or increase.

Literature:

Kraus, J. and Paetzel, F. (2022): In-Group Bias in Natural Groups of Soldiers.

Müller, D. and Paetzel, F. (2021): Markets reduce Discrimination. SSRN Working Paper. 

Paetzel, F. and Sausgruber, R. (2018): Cognitive Ability and In-group Bias - An Experimental Study. Journal of Public Economics 167: 280-292.

(Individual) decision-making behaviour is strongly influenced by questions of fairness and justice. People take the well-being of others into account and (under certain circumstances) act in a socially (more) responsible manner. This involves questions of the fair distribution of resources as well as redistribution preferences in general. In recent years, the question of needs-based justice has become more important.

Literature:

Nicklitsch, A. and Paetzel, F. (2020): Need-based Justice and Distribution Procedures: The Perspective of Economics, erscheint in: B. Kittel und S. Traub (Hrsg.): Need-based Distributive Justice: An Interdisciplinary Perspective, Heidelberg: Springer.

Traub, S., Schwaninger, M., Paetzel, F. and Neuhofer, S. (2022): Evidence on Need-Sensitive Giving Behavior: An Experimental Approach to the Acknowledgment of Needs. SSRN Working Paper.

Paetzel, F. and Traub, S. (2017): Skewness-adjusted Social Preferences: Experimental Evidence on the Relation between Inequality, Elite Behavior and Economic Efficiency. Journal of Behavioral and Experimental Economics 68: 130-139. 

Paetzel F., Sausgruber R. and Traub S. (2014): Social Preferences and Voting on Reform: An Experimental Study. European Economic Review 70: 36-55.

Often in groups, companies or even in politics, decisions are not made by an individual, but by a committee. Until a committee makes a decision, negotiations about different options are conducted and votes are taken. These negotiations can be small-scale and take a long time. Research on this topic uses bargaining experiments with a group size of five participants and takes into account that these members do not necessarily have the same nominal bargaining power.

Literature:

Maaser, N., Paetzel, F. and Traub, S. (2019): Power Illusion in Coalition Bargaining: An Experimental Analysis. Games and Economic Behavior 117: 433-450.

Maaser, N., Paetzel, F. and Traub, S. (2022): Gender and Nominal Power in Multilateral Bargaining. Games 13 (1), 11.

Die obigen Forschungsschwerpunkte stellen lediglich eine grobe und nicht abschließende Auswahl von Forschungsthemen vor. In der Abteilung wird zudem auch an Kombinationen von experimenteller Ökonomik und Simulationen, der Ideengeschichte der Volkswirtschaftslehre, KI, Betrugsverhalten und Themen der Nachhaltigkeit geforscht.