In recent contributions, Weizs cker (2014) and Summers (2014) maintain that mature economies accumulate too much capital. They suggest large and lasting public deficits as a remedy. This paper argues that overaccumulation cannot occur in an economy with land. It presents novel data of aggregate...

Natural gas plays an important role in the future development of electricity markets as it is the least emission intensive fossil generation option while additionally providing the needed flexibility in plant operation to deal with intermittent renewable generation. As both the electricity and...

This paper analyzes innovation races in a moral hazard setting. I develop a model where two competing entrepreneurs, financed by a single venture capitalist, work independently on the same project. The venture capitalist cannot observe the allocation of funds she provides, which creates a moral...

We present a duopoly model of strategic capital accumulation in continuous time with uncertainty, such that investment takes the form of singular control. Spot competition is of Cournot type. For this model there exists a parameterized and Pareto-rankable family of Markov perfect equiblibria in...

This paper considers investments in cost-reducing technology in the context of contributions to climate protection. Contributions to mitigating climate change are analyzed in a two-period model where later contributions can be based on better information, but delaying the contribution to the...

In this paper, we analyse the effects of objective and subjective knowledge about monetary policy, as well as the information search patterns, of German citizens on trust in the ECB. We rely on a unique representative public opinion survey of German households conducted in 2011. We find that...

Search frictions are classified as a main impediment to active competition in many markets. In some markets, such as in financial and retail gasoline markets, governments and consumer protection agencies call for a compulsory price reporting. Consumers should then more easily compare the firms'...

The Stahl model is one of the most applied consumer search models, with many applications and an empirical background. The present paper explores an extension where sellers have asymmetries, which is mostly excluded by the literature. Sellers with heterogeneous numbers of stores are introduced,...

The psychology literature provides ample evidence that people have difficulties taking the perspective of less informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader...

The assumptions that subjects hold beliefs and that the chosen actions are not altered by a proper elicitation of these beliefs are widely used in economics. In this paper I experimentally test whether the second assumption is correct. Especially controlling for different game properties, I nd...