# Lehrstuhl Volkswirtschaftslehre (Mikroökonomie)

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Item The spatial agglomeration of high tech industries: empirical evidence and theoretical explanations from a micro-perspective(2006) Alsleben, Christoph N.; Leininger, Wolfgang; Richter, Wolfram F.Show more Item Incentivizing efficient utilization without reducing access: The case against cost-sharing in insurance(2020-04-22) Fels, MarkusShow more Cost-sharing is regarded as an important tool to reduce moral hazard in health insurance. Contrary to standard prediction, however, such requirements are found to decrease utilization both of efficient and of inefficient care. I employ a simple model that incorporates two possible explanations—consumer mistakes and limited access—to assess the welfare implications of different insurance designs. I find cost-sharing never to be an optimal solution as it produces two novel inefficiencies by limiting access. An alternative design, relying on bonuses, has no such side effects and achieves the same incentivization. I show how the optimal design can be deduced empirically and discuss possible impediments to its implementation.Show more Item Evolutionary models of market structure(2017) M. Moghadam, Hamed; Leininger, Wolfgang; Metzger, LarsShow more The dispute on oligopoly theory was commenced by Vega-Redondo (1997) in which he showed that long run outcome of a symmetric Cournot oligopoly game equals the competitive Walrasian. In this dissertation, first we extend an evolutionary game theoretic model to an asymmetric oligopolistic model where we obtain a form of equilibrium so-called Walrasian in Expectation with market price equal to average marginal costs. Then we analyse firm’s competition under relative payoffs maximizing (RPM) behaviour. RPM behaviour is implied by evolutionary stability. We consider a simple model of symmetric oligopoly where firms select a two dimensional strategy set of price and a non-price variable known as quality simultaneously. The role of cross-elasticities of demand will be shown in determining the evolutionary equilibrium. Finally, a nonparametric revealed preference approach will present an empirical content of the evolutionary oligopoly model. Testable restrictions are derived for an evolutionary model of asymmetric oligopoly in which firms have different cost functions to produce a homogenous good. A case study on the crude oil market with main producers is presented and we compare the rejection rates of both Cournot and evolutionary hypotheses.Show more Item Outside options and centrality in cooperative game theory(2014) Belau, Julia; Leininger, Wolfgang; Trockel, WalterShow more Item On interdependent preferences and sequential structures in rent-seeking contests(2011-05-19) Guse, Tobias; Leininger, Wolfgang; Richter, Wolfram F.Show more The work focuses on two different extensions to the standard rent-seeking model by Gordon Tullock (1980). The first part analyzes the effects of changing the objection function of players in a rent-seeking contest. If players do not only focus on their own payoff, but also on the payoff of their competitors, individual payoff maximization does not yield the highest absolute payoff. Instead, relative payoff maximization yields a higher payoff. The second part focuses on the question of endogenous order of moves. While Leininger (1993) showed for rent-seeking contests with two player that the player with higher valuation will always move later, this work finds for rent-seeking contests with more than two players, that simultaneous moves can occur in a subgame-perfect equilibrium even for heterogenous players, as long as the equilibrium effort of the player with highest valuation does not exceed aggregate equilibrium effort of her opponents (in both the simultaneous and respective sequential subgame). Therefore, the assumption of simultaneous moves can be justified as subgame-perfect for a large set of contests.Show more Item On negatively interdependent preferences in rent-seeking contests(2010-05-31T14:11:13Z) Risse, Sina; Leininger, Wolfgang; Richter, Wolfram F.Show more Item Essays on industrial and societal organization(2010-03-30T12:43:19Z) Gu, Yiquan; Leininger, Wolfgang; Kraft, KorneliusShow more In this dissertation I report three doctoral research projects: the application of imperfect certification in markets with asymmetric information, the impact of elastic demand on market supplied product variety in differentiated product markets and a microeconomic analysis of gift giving when individuals are concerned with social approval (face). It consists of six chapters including a general introduction, four research papers and an outlook for further projects. Chapter 2 proposes a model for a certification market with an imperfect testing technology. Such a technology only assures that whenever two products are tested the higher quality product is more likely to pass than the lower quality one. When only one certifier with such testing technology is present in the market, it is found that this monopoly certifier can be completely ignored in equilibrium, in contrast to the prediction of a model with perfect testing technology. A separating equilibrium is also supported in which only relatively high quality types (products) choose to pay for the certification service. It is true that in such an equilibrium having a certificate is better than not. The exact value of a certificate, however, depends both on the prior distribution of product quality and the nature of the testing technology. Welfare accounting shows that the monopoly certifier's profit maximizing conduct can lead to under or over supply of certification service depending on model specification. Socially optimal certification fee is always positive and such that it makes all positive types choose to test. In the case of two competing certifiers with identical testing technologies, the intuition of Bertrand competition does not necessarily hold. Segmentation equilibrium wherein higher seller types choose the more expensive certification service and not so high types choose the less expensive service can be supported. As an application, we argue that the fee differentiation between major and non-major auditing firms need not be a result of any differences in their auditing technologies. Chapter 3 revisits the excess entry theorem in spatial models a la Vickrey (1964) and Salop (1979) while relaxing the assumption of inelastic demand. Using a demand function with a constant demand elasticity, we show that the number of firms that enter a market decreases with the degree of demand elasticity. We find that the excess entry theorem does only hold when demand is sufficiently inelastic. Otherwise, there is insufficient entry. In the limiting case of unit elastic demand, the market is monopolized. We point out when and how a public policy can be desirable and broaden our results with a more general transportation cost function. Chapter 4 generalizes on Chapter 3. We introduce consumers with a generic quasi-linear utility function in the framework of the Salop (1979) model. In addition to the results found in Chapter 3, we are able to pin down conditions for efficient variety in entry cost and transportation cost. A proof for the existence and uniqueness of symmetric equilibrium when price elasticity of demand is increasing in price is also provided. Chapter 5 studies further into the warm-glow that donors may benefit from their act of giving. Within the framework of concern for social approval, we emphasize an individual's relative position in social network and introduce the concept of face. When individuals are concerned with face, the wealthier will need to contribute more than the poorer in order to gain an equal level of social approval. In aggregate, other things being equal, the more individuals are concerned with face, the more they tend to donate. While this approach is proposed in the context of social acceptance, it is also applicable in morally motivated situations.Show more Item Essays on revealed preference(2010-03-03T07:27:02Z) Heufer, Jan; Leininger, Wolfgang; Hildenbrand, WernerShow more This thesis contributes to the theory of consumer’s behavior. It is devided into three parts:The first part gives a brief history of the theoretical developments relevant to the two consecutive parts and provides a detailed outline.The second part contains theoretical contributions. Specifically, (i) it provides a unifying proof technique to show that preference cycles can be of arbitrary length formore than two but not for two commodities. An immediate corollary is that the Weak Axiom of Revealed Preference only implies the Strong Axiom for two commodities, (ii) it provides a simple graphical way to construct preference cycles, (iii) it shows that for two dimensional commodity spaces any homothetic utility function that rationalizes each pair of observations in a set of consumption data also rationalizes the entire set of observations, (iv) it explorers rationalizability issues for finite sets of observations of stochastic choice and gives two rationalizability theorems.The third part provides three practical contributions. Specfically, (i) it explorers some possible applications of a lemma used in the chapter on homothetic preferences in two dimensions, (ii) it suggests a procedure to decide whether or not to treat a consumer who violates the Generalized Axiom of Revealed Preference as 'close enough' to utility maximization, (iii) it provides a new measure for the severity of a violation of utility maximization based on the extent to which the upper bound of the indifference map intersects the budget set.Show more Item On product differentiation and shopping hours(2008-12-08T08:53:35Z) Wenzel, Tobias; Leininger, Wolfgang; Haucap, JustusShow more This thesis deals with two topics in Industrial Organization: The first one is the issue of product differentiation, whereas the second one analyzes the impact of deregulation of shopping hours in retail industries. These two subjects are treated in two separate parts. Part 1 deals with product differentiation and covers three chapters. The first chapter in this part, extends the Salop model by introducing a general purpose product, that is, a product that is suited for all purposes alike. The second chapter lifts the assumption of inelastic demand which is usually assumed in spatial models of product differentiation. We introduce price- dependent demand and analyze the impact on the excess entry theorem. The third chapter in this part integrates the issue of multi-products firms into a spatial model of product differentiation. We state conditions about variety in the segment of high-quality products in contrast to the variety level in the low-quality segment. Part 2 of the thesis deals with competition over shopping hours in retail industries. In the public and political debate, this topic is controversial. Though there has been a substantial trend towards deregulation in recent years, shopping hours are still regulated in many European countries. In Germany, shopping hours have been liberalized recently. However, the issue whether shopping hours should be further deregulated is still controversial. We treat this issue in two chapters, each chapter focusing on a different aspect of deregulation of shopping hours: The first chapter is concerned with competition over shopping hours when entry into the industry is endogenous. The second chapter of this part analyzes the unequal impact of a deregulation on retailers of different sizes, namely we study competition between a large retail chain and a small corner shop.Show more Item Evaluation frequency in employment relations(2008-12-02T09:51:18Z) Angerhausen, Julia; Leininger, Wolfgang; Witt, PeterShow more This thesis deals with the frequency of evaluations in employment relationships using microeconomic theory. In particular, it analyzes the behavior of a principal with bounded memory who can offer a two-period performance-based contract to one or several agents. After a review of relevant literature, this work contains three detailed models. In the first model, both parties are risk-neutral and the principal can choose whether to evaluate the agent after each period or only at the end of the second period. If the agent is wealth-constrained, the option to evaluate him twice can be profitable. But without the constraint on the part of the agent, the principal will always prefer to evaluate only once in order to reduce evaluation costs. We also consider a modification of the profit function that can be interpreted as depreciation. Again, this leads to a trade-off between more and less frequent evaluations. The second model builds on the first, introducing risk aversion of the agent as additional element. We show that risk aversion on behalf of the agent creates a decision problem concerning the risk-neutral principal's choice on the evaluation frequency. The optimal evaluation frequency will be determined by trading off the efficiency loss induced by the principal's bounded memory against the cost of an additional evaluation. We extend this setup to heterogeneously forgetful principals who compete for an agent. Competition has no impact on the optimal evaluation frequency, but as the agent is risk-averse, the less forgetful principal has a comparative advantage and can make a positive profit when a contract with one evaluation is implemented. The third model investigates whether a differentiation in the frequency of employee evaluations can enhance an employer's ability to offer profitable screening contracts to heterogeneously productive agents. As performance data cannot be perfectly memorized over time, incentives crucially depend on the frequency with which this data is made explicit. The memory-bounded principal offers two-period performance-based contracts to a population of agents who are privately informed about their type. Compared to a situation with symmetric information, optimal screening contracts may include different evaluation frequencies for different types under asymmetric information.Show more Item Four essays on deferred compensation in labor contracts(2007-03-01T14:43:41Z) Gurtoviy, Ruslan; Leininger, Wolfgang; Böckem, SabineShow more Item On the interaction of non-convex investment technologies and financial frictions(Universität Dortmund, 2004-05-27) Bayer, Christian; Leininger, Wolfgang; Hoffmann, M.Show more This thesis analyses the interaction of financial frictions with fixed adjustment costs ofreal capital and other non-convexities in the investment technology. The key result isthat the combination of fixed adjustment cost and financial market imperfectionsaggravate the influence of each factor on investment decisions.The analysis starts off with a model of a monopolistically competitive firm facing bothfrictions. In this model, the interaction of the frictions opens a further channel ofinfluence for financial frictions on investment besides the one most models haveemphasised so far, the effect financial frictions have on the cost-of-capital. The furtherchannel is a separate effect of liquidity on the frequency with which investment projectsare undertaken.This theoretical framework is then empirically assessed by employing two balancesheet data sets, a British (Cambridge DTI-Database) and a German one (BonnDatabase). While the long-run effect of liquidity on the optimal stock-of-capital is at besta very weak one, the frequency-effect appears both statistically and economicallyimportant and explains virtually all correlation of investment and liquidity.The long-run optimal stock of capital is estimated using panel co-integrationtechniques. The investment-function itself is obtained by non-parametrically regressinginvestment on the difference between optimal and actual capital (the co-integrationerror term) and the equity ratio.The non-parametric approach is chosen as the investment-function in its functionalform depends itself on the form of the production function as well as on the forms of thedistribution-functions of all shocks that influence firm-level investment in a complexmanner, so that specifying a precise functional form would be very restrictive and mightbias the results. Yet, estimating the investment-function non-parametrically avoids thispossible mis-specification bias. By estimating average derivatives, still the variousalternative investment models can be tested structurally and the introduced frequencyeffect can be identified.The last part of the thesis extends the introductory model and develops a model inwhich irreversibility of investment, capital market imperfections and imperfect goodsmarketcompetition interact and so bring about patterns of investment behaviour thatare neither present in the irreversible investment, nor in the imperfect competitionframework. Especially, the model gives a rational explanation for the occurrence ofpredatory behaviour in non-collusive industries.Show more Item Essays on economic and econometric modelling of behavioral heterogeneity in demand theory(Universität Dortmund, 2002-10-04) Wilke, Ralf Andreas; Leininger, Wolfgang; Krämer, WalterShow more