Third-Party Funded Projects

Understanding social mobility – An experimental Approach

Period: Jan 2021 – December 2023
Funded: Austrian National Bank (project number 18633)
Amount: Euro 247’000, with Axel Sonntag

Abstract: Social mobility evokes the meritocratic (“American”) dream of earning a better life through hard work, while lack of social mobility means that those at the bottom of the social ladder are doomed to remain there, no matter how hard they try. This project (i) experimentally investigates the relevance of the following structural determinants of social mobility: the degree to which success is driven by luck rather than effort, discrimination, wage compression, and the degree of social stratification. We then (ii) explore how different policy interventions such as income or inheritance taxes affect social mobility under varying structural conditions. We (iii) also investigate peoples’ acceptance of alternative policy measures by the means of voting. We develop an economic model with competition for status and accumulation effects which result from status-dependent access to production technologies. This model serves to generate benchmark predictions that we put to a test in the economic laboratory.

Self-serving views on redistributive fairness

Period: Feb 2019 -  Jan 2022
Funded by Austrian Science Fund (FWF)
Amount: Euro 234'000, with Linda Desző

Abstract: Experimental research on distributive preferences reports that people prefer compensating low income through redistribution when it is due to factors one cannot control. However, there are situations where partners’ incomes were previously unequal, while in a new, present income allocation they receive equal outcomes. Only one paper examines a similar situation, finding that the person with the unfortunate history self-servingly believes that he is entitled to compensation for his past, while the person with the fortunate history believes that the past is irrelevant to the present. We propose an agenda investigating how history shapes distributive preferences, and the association between distributive fairness violations and unethical behavior. We argue that examining the relationship between history and distributive preferences sheds light, for example, on whether a fair welfare system should consider individual contribution history.
First, we ask if asymmetric contribution history to joint earnings leads to self-serving invocations of history between partners when proposing divisions.
Second, we address whether partners sharing asymmetric initial income levels due to a previous allocation hold divergent views about the fair distribution of new, jointly created proceeds to which they contributed
equally. We study the extent to which preferences for maintaining income hierarchy and inequality aversion (beyond greed) drive distributive preferences.
Relatedly, we examine the association between imposing a distributive scheme on the rich and poor and subsequent unethical behavior. Imposed distributive schemes would systematically vary how much post-distribution rank is maintained/reversed and how income inequality is decreased/increased between them


Evaluation of soft measures to promote student success

Period: 2016 - 2019
Funded by Ministry of Education, University of Vienna
Amount: Euro 300'000, with Axel Sonntag

Abstract: The aim of this research project is to systematically evaluate various "soft" measures implemented by the University of Vienna to promote student success. Measures are called "soft" if they do not entail regulations for students or are based on economic incentives like sanctions or rewards. Therefore, students are not coerced or constrained by soft measures and remain entirely free to choose the pace and sequence of their studies as if the measures were not present. Soft measures are also cheap to implement. Typical examples of such measures are reminders of important deadlines or providing online tools for planning coursework. To evaluate the effectiveness of such measures, the University plans to implement a series of soft measures at different times in different faculties. Not all students will therefore experience the same measures at the same time. The purpose of the evaluation is to determine which measures are particularly effective such that they can be used to the benefit of all students.

Fairness, personal responsibility, and the welfare state

Period: January 2015 - December 2018
Funded by NORFACE (EU), Project number: 462-14-033
Amount: Euro 250’000 (Austrian Part), Austrian team: Axel Sonntag, Peter Bednarik 

Abstract: The aim of the research project ”Fairness, personal responsibility and the welfare state” is to analyze how fairness considerations, in particular with respect to personal responsibility, affect the support and effectiveness of welfare policies. The European welfare states are faced with important challenges, in particular related to financial strains on the welfare system, changing migration flows and increasing inequality. Partly as a response to these challenges, there is an increasing focus on personal responsibility. The proposed research project provides new knowledge about how the welfare states can meet these challenges and how concerns for personal responsibility can be integrated in the design of welfare schemes in a way that is perceived as fair.
Four research teams from Norway, the Netherlands, and Austria, take a cross-disciplinary perspective on fairness and use an innovative combination of methods, including administrative register data, surveys, as well as field and laboratory experiments. Other teamleaders: Norway: Alexander Cappelen (NHH Bergen), Stein Kuhnle (U Bergen), Sigrid Suetens (U Tilburg)


Representative Democracy: Theory and Experiments

Period: September 2014 - August 2017
Funded by Deutsche Forschungsgemeinschaft DFG, Project Number: WA3559/1-1
with Alexander K. Wagner

Abstract: This proposal incorporates insights from psychology into economic reasoning to better understand political processes and outcomes in representative democracy. In terms of academic disciplines, the proposal is located at the crossroads of economics, psychology and political science, and in terms of method it is grounded in both theory and experiment. Economic reasoning will be used to investigate how rational and self-interested politicians change their behaviour when voters are forgetful, inattentive and have limited foresight. This approach starts from the well-defined benchmark of rational choice theory and adds psychological realism to how voters are modelled. The theoretical investigation is expected to yield clear and testable predictions. These predictions are tested in a controlled laboratory setting. The general aim is to provide an empirically grounded model of the political process and to inform us when we need to be careful in advancing conclusions from rationalistic models.

Experimental Markets with Search Frictions and Network Externalities

Project duration:  Jan. 2012 - Dec. 2015Funded by Norwegian Research Council, no. 212996/F10
Amount: Euro 70’000, with Leif Helland, Espen Moen

Abstract: The project integrates recent findings in behavioral economics into traditional labor economics. We explore questions regarding labor supply and the provision of effort, including the analysis of incentive effects of taxation and redistribution on effort and the cognitive perception of the incentive effects. In addition, we make contributions to study cooperation in self-governed environments, the political acceptance of reform, and aspects of discrimination in the labor market. We have initiated research to explore behavior in markets with asymmetric information, the measurement and determinants of motivation at work, gender sorting, and the effect of solidarity on social mobility. We have conducted conventional lab experiments with student subjects, large-scale internet experiments with participants form the general population, and have conducted natural field experiments. 

Experimental Investigations of Labor Markets

Period: September 2008 – February 2015

Funded by Austrian Science Fund (no. S10307)
Amount: Euro 350’000, with Rupert Sausgruber

Abstract: The project integrates recent findings in behavioral economics into traditional labor economics. We explore questions regarding labor supply and the provision of effort, including the analysis of incentive effects of taxation and redistribution on effort and the cognitive perception of the incentive effects. In addition, we make contributions to study cooperation in self-governed environments, the political acceptance of reform, and aspects of discrimination in the labor market. We have initiated research to explore behavior in markets with asymmetric information, the measurement and determinants of motivation at work, gender sorting, and the effect of solidarity on social mobility. We have conducted conventional lab experiments with student subjects, large-scale internet experiments with participants form the general population, and have conducted natural field experiments. 

iLEE: Internet-based platform for research in Economics

Period: 2007 - 2011
Funded by Carlsberg Foundation
Amount: Euro 1'180'000

Abstract: The purpose of the project is to develop a novel platform for research in Economics (which was later called iLEE: internet Laboratory for Experimental Economics). It serves to conduct large-scale experiments with participants from all walks of life from the Danish population over the internet. Controlled laboratory experiments have been used with much success in economics to investigate a wide range of economic choices. They allow to infer causal effects and motives for particular choices which is often fraught with difficulties if not impossible in the field. Such controlled experiments have traditionally been conducted in an experimental laboratory and with undergraduate students. Because iLEE uses a "virtual lab" approach, it enables us to conduct controlled and incentivized experiments over the internet and our collaboration with Statistics Denmark allows us to recruit people from all walks of life about whom we have very detailed statistical information from official registers.