TY - JOUR
AB - We study how competition between physicians affects the provision of medical care. In
our theoretical model, physicians are faced with a heterogeneous patient population, in which patients
systematically vary with regard to both their responsiveness to the provided quality of care and their
state of health. We test the behavioral predictions derived from this model in a controlled laboratory
experiment. In line with the model, we observe that competition significantly improves patient benefits
as long as patients are able to respond to the quality provided. For those patients, who are not able
to choose a physician, competition even decreases the patient benefit compared to a situation without
competition. This decrease is in contrast to our theoretical prediction implying no change in benefits for
passive patients. Deviations from patient-optimal treatment are highest for passive patients in need of
a low quantity of medical services. With repetition, both, the positive effects of competition for active
patients as well as the negative effects of competition for passive patients become more pronounced. Our
results imply that competition can not only improve but also worsen patient outcome and that patients’
responsiveness to quality is decisive.
AU - Brosig-Koch, Jeannette
AU - Hehenkamp, Burkhard
AU - Kokot, Johanna
ID - 44092
JF - Health Economics
KW - physician competition
KW - patient characteristics
KW - heterogeneity in quality responses
KW - fee-for-service
KW - laboratory experiment
TI - Who benefits from quality competition in health care? A theory and a laboratory experiment on the relevance of patient characteristics
ER -
TY - GEN
AB - We consider a model where for-profit providers compete in quality in a price-regulated market that has been opened to competition, and where the incumbent is located at the center of the market, facing high costs of relocation. The model is relevant in markets such as public health care, education and schooling, or postal services. We find that, when the regulated price is low or intermediate, the entrant strategically locates towards the corner of the market to keep the incumbent at the low monopoly quality level. For a high price, the entrant locates at the corner of the market and both providers implement higher quality compared to a monopoly. In any case, the entrant implements higher quality than the incumbent provider. Social welfare is always higher in a duopoly if the cost of quality is low. For higher cost levels welfare is non-monotonic in the price and it can be optimal to the regulator not to use its entire budget. Therefore, the welfare effect of entry depends on the price and the size of the entry cost, and the regulator should condition the decision to allow entry on an assessment of the entry cost.
AU - Hehenkamp, Burkhard
AU - Kaarbøe, Oddvar M.
ID - 44093
KW - Quality competition
KW - Price regulation
KW - Location choice
KW - Product differentiation
TI - Price Regulation, Quality Competition and Location Choice with Costly Relocation
ER -
TY - CHAP
AU - Haake, Claus-Jochen
AU - Hehenkamp, Burkhard
AU - Polevoy, Gleb
ED - Haake, Claus-Jochen
ED - Meyer auf der Heide, Friedhelm
ED - Platzner, Marco
ED - Wachsmuth, Henning
ED - Wehrheim, Heike
ID - 45878
T2 - On-The-Fly Computing -- Individualized IT-services in dynamic markets
TI - The Market for Services: Incentives, Algorithms, Implementation
VL - 412
ER -
TY - BOOK
AB - In the proposal for our CRC in 2011, we formulated a vision of markets for
IT services that describes an approach to the provision of such services
that was novel at that time and, to a large extent, remains so today:
„Our vision of on-the-fly computing is that of IT services individually and
automatically configured and brought to execution from flexibly combinable
services traded on markets. At the same time, we aim at organizing
markets whose participants maintain a lively market of services through
appropriate entrepreneurial actions.“
Over the last 12 years, we have developed methods and techniques to
address problems critical to the convenient, efficient, and secure use of
on-the-fly computing. Among other things, we have made the description
of services more convenient by allowing natural language input,
increased the quality of configured services through (natural language)
interaction and more efficient configuration processes and analysis
procedures, made the quality of (the products of) providers in the
marketplace transparent through reputation systems, and increased the
resource efficiency of execution through reconfigurable heterogeneous
computing nodes and an integrated treatment of service description and
configuration. We have also developed network infrastructures that have
a high degree of adaptivity, scalability, efficiency, and reliability, and
provide cryptographic guarantees of anonymity and security for market
participants and their products and services.
To demonstrate the pervasiveness of the OTF computing approach, we
have implemented a proof-of-concept for OTF computing that can run
typical scenarios of an OTF market. We illustrated the approach using
a cutting-edge application scenario – automated machine learning (AutoML).
Finally, we have been pushing our work for the perpetuation of
On-The-Fly Computing beyond the SFB and sharing the expertise gained
in the SFB in events with industry partners as well as transfer projects.
This work required a broad spectrum of expertise. Computer scientists
and economists with research interests such as computer networks and
distributed algorithms, security and cryptography, software engineering
and verification, configuration and machine learning, computer engineering
and HPC, microeconomics and game theory, business informatics
and management have successfully collaborated here.
AU - Haake, Claus-Jochen
AU - Meyer auf der Heide, Friedhelm
AU - Platzner, Marco
AU - Wachsmuth, Henning
AU - Wehrheim, Heike
ID - 45863
TI - On-The-Fly Computing -- Individualized IT-services in dynamic markets
VL - 412
ER -
TY - JOUR
AB - Qualitative comparative analysis (QCA) enables researchers in international management to better understand how the impact of a single explanatory factor depends on the context of other factors. But the analytical toolbox of QCA does not include a parameter for the explanatory power of a single explanatory factor or “condition”. In this paper, we therefore reinterpret the Banzhaf power index, originally developed in cooperative game theory, to establish a goodness-of-fit parameter in QCA. The relative Banzhaf index we suggest measures the explanatory power of one condition averaged across all sufficient combinations of conditions. The paper argues that the index is especially informative in three situations that are all salient in international management and call for a context-sensitive analysis of single conditions, namely substantial limited diversity in the data, the emergence of strong INUS conditions in the analysis, and theorizing with contingency factors. The paper derives the properties of the relative Banzhaf index in QCA, demonstrates how the index can be computed easily from a rudimentary truth table, and explores its insights by revisiting selected papers in international management that apply fuzzy-set QCA. It finally suggests a three-step procedure for utilizing the relative Banzhaf index when the causal structure involves both contingency effects and configurational causation.
AU - Haake, Claus-Jochen
AU - Schneider, Martin
ID - 34114
JF - Journal of International Management
KW - Qualitative comparative analysis
KW - Banzhaf power index
KW - causality
KW - explanatory power
TI - Playing games with QCA: Measuring the explanatory power of single conditions with the Banzhaf index
ER -
TY - JOUR
AU - Hoyer, Britta
AU - van Straaten, Dirk
ID - 30341
JF - Journal of Behavioral and Experimental Economics
KW - General Social Sciences
KW - Economics and Econometrics
KW - Applied Psychology
SN - 2214-8043
TI - Anonymity and Self-Expression in Online Rating Systems - An Experimental Analysis
VL - 98
ER -
TY - GEN
AB - We study the consequences of modeling asymmetric bargaining power in two-person bargaining problems. Comparing application of an asymmetric version of a bargaining solution to an upfront modification of the disagreement point, the resulting distortion crucially depends on the bargaining solution concept. While for the Kalai-Smorodinsky solution weaker players benefit from modifying the disagreement point, the situation is reversed for the Nash bargaining solution. There, weaker players are better off in the asymmetric bargaining solution. When comparing application of the asymmetric versions of the Nash and the Kalai-Smorodinsky solutions, we demonstrate that there is an upper bound for the weight of a player, so that she is better off with the Nash bargaining solution. This threshold is ultimately determined by the relative utilitarian bargaining solution. From a mechanism design perspective, our results provide valuable information for a social planner, when implementing a bargaining solution for unequally powerful players.
AU - Haake, Claus-Jochen
AU - Streck, Thomas
ID - 32106
KW - Asymmetric bargaining power
KW - Nash bargaining solution
KW - Kalai-Smorodinsky bargaining solution
TI - Distortion through modeling asymmetric bargaining power
VL - 148
ER -
TY - JOUR
AU - Hoyer, Britta
AU - De Jaegher, Kris
ID - 31881
JF - International Journal of Game Theory
TI - Network Disruption and the Common-Enemy Effect
ER -
TY - GEN
AB - We study the effects of product differentiation on the bundling incentives of a two-product retailer. Two monopolistic manufacturers each produce a differentiated good. One sells it to both retailers, while the other only supplies a single retailer. Retailers compete in prices. Retail bundling is profitable when the goods are close substitutes. Only then is competition so intense that the retailer uses bundling to relax competition both within and across product markets, despite an aggravation of the double marginalization problem. Our asymmetric market structure arises endogenously for the case of close substitutes. In this case, bundling reduces social welfare.
AU - Endres-Fröhlich, Angelika Elfriede
AU - Hehenkamp, Burkhard
AU - Heinzel, Joachim
ID - 44091
KW - Retail bundling
KW - upstream market power
KW - double marginalization
KW - product differentiation
TI - The Impact of Product Differentiation on Retail Bundling in a Vertical Market
ER -
TY - JOUR
AB - We analyse the two-dimensional Nash bargaining solution (NBS) by deploying
the standard labour market negotiations model of McDonald and Solow (1981).
We show that the two-dimensional bargaining problem can be decomposed into two
one-dimensional problems, such that the two solutions together replicate the solution
of the two-dimensional problem if the NBS is applied. The axiom of
Independence of Irrelevant Alternatives is shown to be crucial for this type
of decomposability. This result has significant implications for actual
negotiations because it allows for the decomposition of a multi-dimensional bargaining
problem into one-dimensional problems---and thus helps to facilitate real-world
negotiations.
AU - Haake, Claus-Jochen
AU - Upmann, Thorsten
AU - Duman, Papatya
ID - 30940
IS - 2
JF - Scandinavian Journal of Economics
KW - Labour market negotiations
KW - efficient bargains
KW - Nash bargaining solution
KW - sequential bargaining
KW - restricted bargaining games
TI - Wage Bargaining and Employment Revisited: Separability and Efficiency in Collective Bargaining
VL - 125
ER -
TY - JOUR
AB - AbstractIn this article we combine Debreu’s (Proc Natl Acad Sci 38(10):886–893, 1952) social system with Hurwicz’s (Econ Design 1(1):1–14, 1994; Am Econ Rev 98(3):577–585, 2008) ideas of embedding a “desired” game form into a “natural” game form that includes all feasible behavior, even if it is “illegal” according to the desired form. For the resulting socio-legal system we extend Debreu’s concepts of a social system and its social equilibria to a socio-legal system with its Debreu–Hurwicz equilibria. We build on a more general version of social equilibrium due to Shafer and Sonnenschein (J Math Econ 2(3):345–348, 1975) that also generalizes the dc-mechanism of Koray and Yildiz (J Econ Theory 176:479–502, 2018) which relates implementation via mechanisms with implementation via rights structures as introduced by Sertel (Designing rights: invisible hand theorems, covering and membership. Tech. rep. Mimeo, Bogazici University, 2001). In the second part we apply and illustrate these new concepts via an application in the narrow welfarist framework of two person cooperative bargaining. There we provide in a socio-legal system based on Nash’s demand game an implementation of the Nash bargaining solution in Debreu–Hurwicz equilibrium.
AU - Haake, Claus-Jochen
AU - Trockel, Walter
ID - 29152
JF - Review of Economic Design
SN - 1434-4742
TI - Socio-legal systems and implementation of the Nash solution in Debreu–Hurwicz equilibrium
ER -
TY - JOUR
AB - I study a dynamic variant of the DixitâStiglitz (Am Econ Rev 67(3), 1977) model of monopolistic competition by introducing price stickiness à la Fershtman and Kamien (Econometrica 55(5), 1987). The analysis is restricted to bounded quantity and price paths that fulfill the necessary conditions for an open-loop Nash equilibrium. I show that there exists a symmetric steady state and that its stability depends on the degree of product differentiation. When moving from complements to perfect substitutes, the steady state is either a locally asymptotically unstable (spiral) source, a stable (spiral) sink or a saddle point. I further apply the Hopf bifurcation theorem and prove the existence of limit cycles, when passing from a stable to an unstable steady state. Lastly, I provide a numerical example and show that there exists a stable limit cycle.
AU - Hoof, Simon
ID - 45640
IS - 2
JF - Journal of Optimization Theory and Applications
SN - 1573-2878
TI - Dynamic Monopolistic Competition
VL - 189
ER -
TY - JOUR
AB - We analyze the actual behavior of agents in a matching mechanism, using data from a clearinghouse at the Faculty of Business Administration and Economics at a German university, where a variant of the Boston mechanism is used. We supplement this data with data generated in a survey among the students who participated in the clearinghouse. We find that under the current mechanism over 74% of students act strategically by misrepresenting at least one of their preferences. Nevertheless, not all students are able to improve their outcome by doing so. We show that this is mainly due to the incomplete information of students and naiveté. Sophisticated students actually reach significantly better outcomes than naive students. Thus, we find evidence that naive students are exploited by sophisticated students in an incomplete information setting.
AU - Hoyer, Britta
AU - Stroh-Maraun, Nadja
ID - 16334
JF - Games and Economic Behavior
TI - Matching Strategies of Heterogeneous Agents under Incomplete Information in a University Clearinghouse
VL - 121
ER -
TY - JOUR
AU - Haake, Claus-Jochen
AU - Trockel, Walter
ID - 34115
IS - 1-2
JF - Homo Oeconomicus
KW - Industrial and Manufacturing Engineering
KW - Environmental Engineering
SN - 0943-0180
TI - Introduction to the Special Issue “Bargaining”
VL - 37
ER -
TY - JOUR
AU - Karl, Holger
AU - Kundisch, Dennis
AU - Meyer auf der Heide, Friedhelm
AU - Wehrheim, Heike
ID - 13770
IS - 6
JF - Business & Information Systems Engineering
TI - A Case for a New IT Ecosystem: On-The-Fly Computing
VL - 62
ER -
TY - JOUR
AB - Many countries have opened their health care markets to private for-profit providers, aiming to promote quality and choice for patients. The prices are regulated and providers compete in location and quality. We show that whereas opening a public hospital market typically raises quality, the private provider strategically locates towards the corner of the market to avoid costly quality competition. Social welfare depends on the size of the regulator's budget and on the altruism of the public provider. If the budget is large, high quality results and welfare is highest in a duopoly whenever entry is optimal. If the budget is small, quality levels in a duopoly mirror the quality level in a monopoly. It can be optimal for the regulator not to use the full budget.
AU - Hehenkamp, Burkhard
AU - Kaarbøe, Odvar M.
ID - 17350
JF - Journal of Economic Behavior & Organization
TI - Location Choice and Quality Competition in Mixed Hospital Markets
VL - 177
ER -
TY - JOUR
AB - We investigate the degree of price competition among telecommunication firms. Underlying a Bertrand model of price competition, we empirically model pricing behaviour in an oligopoly. We analyse panel data of individual pricing information of mobile phone contracts offered between 2011 and 2017. We provide empirical evidence that price differences as well as reputational effects serve as a signal to buyers and significantly affect market demand. Additionally, we find that brands lead to an increase in demand and thus are able to generate spillover effects even after price increase.
AU - Kaimann, Daniel
AU - Hoyer, Britta
ID - 1139
IS - 1
JF - Applied Economics Letters
TI - Price competition and the Bertrand model: The paradox of the German mobile discount market
VL - 26
ER -
TY - JOUR
AB - Social psychology studies the "common enemy effect", the phenomenon
that members of a group work together when they face an opponent, although they otherwise have little in common. An interesting scenario
is the formation of an information network where group members individually sponsor costly links. Suppose that ceteris paribus, an outsider
appears who aims to disrupt the information
flow within the network
by deleting some of the links. The question is how the group responds
to this common enemy. We address this question for the homogeneous
connections model of strategic network formation, with two-way
flow of
information and without information decay. For sufficiently low linkage
costs, the external threat can lead to a more connected network, a positive
common enemy effect. For very high but not prohibitively high linkage
costs, the equilibrium network can be minimally connected and efficient
in the absence of the external threat whereas it is always empty and inefficient in the presence of the external threat, a negative common enemy
effect. For intermediate linkage costs, both connected networks and the
empty network are Nash for certain cost ranges.
AU - Hoyer, Britta
AU - Haller, Hans
ID - 2256
JF - Journal of Economic Behavior & Organization
TI - The Common Enemy Effect under Strategic Network Formation and Disruption
VL - 162
ER -
TY - JOUR
AB - Models on network formation have often been extended to include the potential of network disruption in recent years. Whereas the theoretical research on network formation under the threat of disruption has thus gained prominence, hardly any experimental research exists so far. In this paper, we therefore experimentally study the emergence of networks including the aspect of a known external threat by relating theoretical predictions by Dzuibiński and Goyal (2013) to actual observed behaviour. We deal with the question if subjects in the role of a strategic Designer are able to form safe networks for least costs while facing a strategic Adversary who is going to attack their networks. Varying the costs for protecting nodes, we designed and tested two treatments with different predictions for the equilibrium network and investigated whether one of the least cost equilibrium networks was more likely to be reached. Furthermore, the influence of the subjects’ farsightedness on their decision-making process was elicited and analysed.
We find that while subjects are able to build safe networks in both treatments, equilibrium networks are only built in one of the two treatments. In the other treatment, predominantly safe networks are built but they are not for least costs. Additionally, we find that farsightedness –as measured in our experiment– has no influence on whether subjects are able to build safe or least cost equilibrium networks. Two robustness settings with a reduced external threat or more liberties to modify the initial networks qualitatively confirm our results. Overall, in this experiment observed behaviour is only partially in line with the theoretical predictions by Dzuibiński and Goyal (2013).
AU - Endres, Angelika Elfriede
AU - Recker, Sonja
AU - Mir Djawadi, Behnud
AU - Hoyer, Britta
ID - 80
JF - Journal of Economic Behavior and Organization
TI - Network Formation and Disruption - An Experiment: Are equilibrium networks too complex?
VL - 157
ER -
TY - GEN
AB - In this paper, we analyze a credence goods model adjusted to the health care market with regulated prices and heterogeneous experts. Experts are physicians and are assumed to differ in their cost of treating a small problem. We investigate the effects of this heterogeneity on the physicians’ level of fraud and on the patients’ search for second opinions. We find that introducing a fraction of more efficient low-cost physicians always increases social welfare, but in some cases only because of the raised physicians’ surplus. When the low-cost physicians’ cost advantage is small, imposing a share of low-cost physicians does not change the equilibrium fraud level. When the cost advantage is large, however, different changes in the fraud level occur depending on the share of generated low-cost physicians, the search rate and the initial level of fraud.
AU - Heinzel, Joachim Maria Josef
ID - 7630
KW - credence goods
KW - treatment efficiency
KW - heterogeneous experts
KW - overcharging
TI - Credence Goods Markets with Heterogeneous Experts
VL - 118
ER -