Labor Market Effects of Economic Integration: The Impact of Re-Unification in German Border Regions

Abstract. This paper exploits the significant reduction in impediments to labor mobility in the process of German re-unification in order to identify labor supply shocks in the West German labor market. The focus is on the quasi-experiment of the border removal in the regions situated at the German–German border that faced a massive increase of cross-border labor supply. The results indicate that despite a gain in employment, the border removal was accompanied by a decline in wages and an increase in unemployment relative to other West German regions.     

A Relational Typology of Project Management Offices

This explorative article develops a relational typology of PMOs based on their roles with stakeholders. A multi‐case study was used to identify the roles of PMOs in multiple‐PMO settings. A three‐dimensional role space allows locating the complex relational profiles that PMOs take on with respect to their stakeholders in practice. Superordinate, subordinate, and coequal roles were identified in a framework of servicing, controlling, and partnering in organizations. While servicing (subordinate role profile) and controlling (superordinate role profile) support organizational effectiveness and exploitation of knowledge, partnering (coequal role profile) creates the slack necessary for potential exploration of new knowledge.     

Sabotage in dynamic tournaments

This paper studies sabotage in a dynamic tournament. Three players compete in two rounds. In the final round, a player who is leading in the race, but not yet beyond the reach of his competitors, is sabotaged more heavily. As a consequence, if all players start off at the same position, they do not work productively or sabotage at all in the first round. Thus sabotage is not only directly destructive, but also depresses incentives to work productively. If players are heterogeneous ex ante, sabotage activities in the first round may be concentrated against an underdog, contrary to findings from static tournaments.     

Simultaneous inter- and intra-group conflicts

This paper models the trade-off between production and appropriation in the presence of simultaneous inter- and intra-group conflicts. The model exhibits a ‘group cohesion effect’: if the contest between the groups becomes more decisive, the players devote fewer resources to the intra-group conflict. Moreover, there is also a ‘reversed group cohesion effect’: if the intra-group contests become less decisive, the players devote more resources to the inter-group contest. The model also sheds new light on normative questions. I derive exact conditions for when dividing individuals into more groups leads to more productive and less appropriative activities. Moreover, I show that there is an optimal size of the organization which is determined by a trade-off between increasing returns to scale in production and increasing costs of appropriative activities. I want to thank Paul Heidhues, Kai Konrad, Thomas Kittsteiner, Klaas Staal, an anonymous referee, and in particular Dan Kovenock for very helpful comments and suggestions. Any remaining errors are mine. Financial support from the Deutsche Forschungsgemeinschaft through SFB/TR 15 is gratefully acknowledged.     

Index of Perceived Inflation or EU Consumer Surveys?

After the euro changeover at the beginning of 2002, a marked discrepancy emerged between perceived inflation and inflation as measured by the consumer price index. To what extent are consumers still overestimating price developments even now? How reliably is this phenomenon measured by the “Index of perceived inflation” developed by Professor Brachinger? What are the findings of the consumer surveys conducted on behalf of the European Commission?

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This article represents the personal opinions of the authors and does not necessarily reflect the views of the Deutsche Bundesbank.