Leverage Dynamics and the Burden of Debt

In addition to leverage, the debt service burden of households and firms is an important link between financial and real developments at the aggregate level. Using US data from 1985 to 2017, we find that the debt service burden has sizeable negative effects on expenditure. Its interplay with leverage also explains several data puzzles, including the lack of above-trend output growth during credit booms and the severity of ensuing recessions, without appealing to large shocks or nonlinearities. Estimating the model with data up to 2005, it predicts credit and expenditure paths that closely match actual developments before and during the Great Recession.     

Liking what others “Like”: using Facebook to identify determinants of conformity

In this paper we explore the micro-level determinants of conformity. Members of the social networking service Facebook express positive support to content on the website by clicking a Like button. We set up a natural field experiment to test whether users are more prone to support content if someone else has done so before. To find out to what extent conformity depends on group size and social ties we use three different treatment conditions: (1) one stranger has Liked the content, (2) three strangers have Liked the content, and (3) a friend has Liked the content. The results show that one Like from a single stranger had no impact. However, increasing the size of the influencing group doubled the probability that subjects expressed positive support. Friendship ties were also decisive. People were, on average, four times more likely to press the Like button if a friend, rather than a stranger, had done so before them. The existence of threshold effects in our experiment clearly shows that both group size and social proximity matters when opinions are shaped.     

Endogenous Property Rights in a Hold‐up Experiment

In a hold‐up experiment designed to test theoretical predictions following from Hart and deMeza and Lockwood regarding investment behavior, Sonnemans, Oosterbeek and Sloof (SOS) find only a partial confirmation of theory. According to SOS these deviations from standard theory can be explained by positive reciprocal behavior. In this paper, we replicate the experiment by SOS and add another group of treatments in which asset ownership is endogenized by auctioning off the assets. Our experiment shows that the results by SOS crucially depend on the ownership structure being exogenously assigned by the experimenter. We present experimental evidence that, by and large, corroborates the theoretical predictions made by Hart.     

Social networks and small business performance in West African border regions

This paper studies the links between economic performance and social networks in West Africa. Using data collected on 358 small-scale traders in five border markets, we show that social networks can be simultaneously a resource which positively contributes to labour market outcomes and a social burden that has a negative economic impact. Testing the effect of social networks between small traders and three categories of actors, we find that the most well-connected actors are also the most successful in terms of monthly profit. The effects of social networks are, however, dependent on the type of persons with whom traders are connected. We show that support received from state representatives and politicians is converted into economic performance, while the impact of law enforcement officers on the monthly profits of traders is not significant. We also find that interacting with traditional religious leaders has a negative effect on economic performance. Our work has two implications: Firstly, collecting data on social networks remains challenging due to endogeneity. Secondly, network-enhancing policies should aim at improving both the internal connectivity of economic actors at the local level and their external connectivity with the rest of the world.     

Decomposing the Ins and Outs of Cyclical Unemployment

This paper analyses the contribution of the composition of the pool of employed and unemployed individuals to labour market dynamics in different phases of the business cycle. Using individual‐level data from the Current Population Survey (CPS), we decompose differences in employment status transition rates between upswings and downturns into explained and unexplained parts. We find that the duration of unemployment contributes to explaining unemployment outflows to employment and observe that its initially positive contribution turns negative in deep recessions. Composition effects play an important role for unemployment outflows to non‐participation but dampen the cyclicality of unemployment inflows from employment.     

What is progress in transdisciplinary research?

In disciplinary research progress is reached and assessed by referring to the state of research in a specific field. But what is progress in transdisciplinary research, where several disciplines and further societal actors may be involved? Based on the conception of transdisciplinary research as a collaboration of academic as well as non-academic thought-styles, and based on the understanding of transdisciplinary research as research that develops a comprehensive, multi-perspective, common-good oriented and useful approach to a socially relevant issue, the question of progress is discussed for four view-points: (a) the people concerned about the issue are much less interested in the question of progress in transdisciplinary research than in a better handling of the real world problem; (b) members of a disciplinary, business, governmental or civil society's thought-style, who gain a more comprehensive understanding of an issue through the transdisciplinary research process, are more interested in further elaborating the issue within their thought-style, than in general lessons on progress; (c) progress on the level of personal experience mainly means that members of academic or non-academic thought-styles realize that they are a member of a specific thought-style among others. Progress would be made by integrating this experience in general education and special training; (d) finally a lot of general lessons can be learned and elaborated as tools, cases studies and approaches form the perspective of a thought-style interested in how to understand and manage transdisciplinary research.     

Ist die Katharsis-Theorie zu retten?

Catharsis theory is regarded as refuted. This widespread belief can be questioned for two reasons. First, most test films used in experimental studies do not meet the requirements of catharsis theory; second the social consequences of catharsis were not measured. Two films were produced for our experiment, one which meets the requirements of catharsis theory and should reduce aggressiveness and one which, according to alternative theories, should increase aggressiveness. A control group saw a neutral film. As dependent variables (a) level of general aggression, (b) aggressive inclinations in social situations, and (c) willingness to use aggressive stereotypes were measured. The film that was assumed to reduce aggressiveness increased aggressiveness even more than the film that was assumed to increase it. This surprising finding and its consequences are discussed.