How eco-friendly markets can accidentally increase pollution: Our research shows that without enough environmentally-conscious buyers, creating separate "green" markets can backfire by pushing regular consumers toward more harmful products.

When Green Markets Backfire

Herweg, Köszegi & Schmidt "Some Simple Economics of Green Markets" CRC Discussion Paper No. 572

190researchblog.substack.com

Why are new homes being built in danger zones? Cheap insurance and strict building rules in safe neighbourhoods are forcing development toward the wildfire fringe, but allowing more housing in safe areas can help lower the financial burden on workers.

Building in Harm’s Way: How Institutional Distortions Shape Wildfire Risk in San Diego

Ospital: "Housing Supply, Property Insurance, and Exposure to Wildfire Risk" CRC Discussion Paper No. 571

190researchblog.substack.com

How transport subsidies fall short as climate policy: Germany’s 9-Euro Ticket boosted rail travel by 35% but cost €6,140/tCO2 due to minimal car-to-rail substitution. Though an efficient cost-of-living transfer, the passenger surge triggered a 30% surge in train delays.

Welfare vs. Climate: Lessons from Germany’s 9-Euro Ticket

Wichert et al.: "Almost fare free: Impact of a cheap public transport ticket on mobility patterns and train delays" Journal of Public Economics 258 (2026)

190researchblog.substack.com

How private interest drives the public good: Our study shows that the 1866 cholera epidemic induced a 35% increase in waterworks investments by industrial elites fearing labor scarcity, proving that economic incentives can catalyze transformative public health reforms.

Private Interest in the Public Good: Cholera and the Origins of Sanitary Reform

Gallardo-Albarrán & Kappner: "Private Interest in the Public Good: Cholera and the Origins of Sanitary Reform" CRC Discussion Paper No. 573

190researchblog.substack.com

How media content shapes democracy: Our study of early Canadian TV shows that nationalised news erodes voter turnout and local accountability, while local programming preserves the vital link between citizens and their representatives.

National Content, Local Consequences: How the Geographic Orientation of Media Shapes Political Accountability

Bühler & Dickens: "National content and local political consequences: Evidence from public and private television" Journal of Public Economics, Volume 259 (2026)

190researchblog.substack.com

This is not just another summer workshop in Berlin, but actually TWO conferences! The 2nd Berlin PhD Conference consists of an Applied Micro part and a part on micro theory and behavioral economics: sites.google.com/vie... Keynotes by Esmée Zwiers, Simon Jäger, Jeanne Hagenbach, and Botond Köszegi.

How a country can survive its currency value doubling overnight: Our study of the 1985 Plaza Accord shows that Japan avoided a jobs crisis by leaning on its "jobs-for-life" culture and moving production to Asia, even as it began a shift from manufacturing to services.

How Rigid Labor Markets Shaped Japan’s Response to the Plaza Accord

Kumanomido: "Exchange Rate Appreciation and Structural Adjustment: Evidence from the Plaza Accord" CRC Discussion Paper No. 567

190researchblog.substack.com

Great stuff happening in Berlin! Look at our market design workshop at @wzb.bsky.social ! @rationalitycrc.bsky.social

Why newly enfranchised women voted against the parties that secured their rights: We reveal that religious "identity payoffs" outweighed material self-interest, proving that cultural identities can decouple political choice from economic incentives even when stakes are high.

Female Enfranchisement and the Conservative Voting Gap

Bühler & Sabet "Female enfranchisement and the conservative voting gap: Evidence from gender-separated precinct returns" European Journal of Political Economy (2026)

190researchblog.substack.com

Why searching for a "better deal" yields diminishing returns: David Ronayne and David P. Myatt prove that sampling without replacement exhibits decreasing returns, where the expected benefit of each additional search systematically declines regardless of the population.

New Insights into Sampling Without Replacement

Myatt & Ronayne: "Decreasing returns to sampling without replacement" Economics Letters, Volume 264 (2026)

190researchblog.substack.com

Why specialists give proprietary data to big-tech rivals for free: David Ronayne and colleague's model shows that sharing data strategically induces "coopetition," softening competition but potentially harming consumers through lower innovation.

Why Specialist Firms Willingly Give Their Data to Big-Tech Rivals

Bhargava, Dubus, Ronayne & Shekhar: "The Strategic Value of Data Sharing in Interdependent Markets" Management Science, Volume 72 (2025)

190researchblog.substack.com

Why identical products maintain persistent price differences: David Ronayne and David P. Myatt demonstrate how the threat of rapid "special deals" stabilizes price dispersion, with the most captive firms setting the highest prices.

Stable Price Dispersion: A New Framework for Persistent Price Heterogeneity

Myatt & Ronayne: "Stable Price Dispersion under Heterogeneous Buyer Consideration" RAND Journal of Economics, Volume 57 (2026)

190researchblog.substack.com

How the "law of one price" fails in asymmetric competition: David Ronayne and David P. Myatt show that vanishing customer loyalty induces a "law of monopoly pricing" where most firms charge the maximum price while one leader anchors the market at the second-lowest cost.

Revisiting Bertrand Competition with Captive Customers

Myatt & Ronayne: "Bertrand competition and captive customers" Economics Letters, Volume 257 (December 2025)

190researchblog.substack.com

When price competition is more than a simple "tango": David Ronayne and David P. Myatt show how cost differences create a "thrango" of multiple firms using randomized sales. Innovation drives even similar companies toward unique, unpredictable pricing strategies.

Ronayne Week Day #1: How Cost Asymmetry Reshapes Competitive Sales

Myatt & Ronayne: "Asymmetric Models of Sales" American Economic Journal: Microeconomics, Volume 18 (2026)

190researchblog.substack.com

CRC Coffee Break Special Issue: To celebrate the recent publication of five papers by CRC member David Ronayne, we are announcing the "David Ronayne Week" on our blog! Next week, we will publish one blogpost a day, each exploring one of the new papers.

How ancient history shapes economic decision-making: Our 116-country study reveals that ancestral distance systematically drives preference heterogeneity, showing that modern risk and time preferences are rooted in cultural patterns transmitted over thousands of years.

The Cultural Geography of Choice: Global Variation in Risk and Time Preferences

Becker et. al: "The Global Variation in Risk and Time Preferences" CRC Discussion Paper No. 568

190researchblog.substack.com

Why cash makes us more selfish: Our new experiment shows that knowing the real-world dollar value of earnings triggers more self-serving judgements than abstract points or tokens, even when the actual split remains exactly the same.

How Monetary Stakes Reframe Fairness Perceptions

Chugunova & Luhan: "A matter of principle or a matter of money? How fairness evaluations change with experimental currencies" PLoS One 21(2) (2026)

190researchblog.substack.com

How students leverage self-delusion to beat procrastination: Our new field study shows that university students strategically inflate their believed returns to effort by 20% as exams approach, proving that biased beliefs function as an instrumental tool for self-control.

Strategic Self-Delusion: How Students Manage Beliefs to Overcome Present Bias

Bönisch, König, Schweighofer-Kodritsch & Weizsäcker "Beliefs as a means of self-control? Evidence from a dynamic student survey" Journal of Economic Dynamics & Control 184 (2026)

190researchblog.substack.com

Yesterday, we concluded our 18th CRC Retreat in Schwanenwerder. Three wonderful days of reseach collaboration and scientific exchange.

Why labor markets underprovide benefits despite high worker demand: Our model shows that treating benefits as hidden "experience goods" systematically induces inefficiently low coverage and compressed wage gaps, masking the true extent of compensation inequality.

Why Labor Markets May Underprovide Benefits

Sulka: "Providing Benefits to Uninformed Workers" CRC Discussion Paper No. 566

190researchblog.substack.com

How competitive neutrality falls short: Our causal analysis reveals that state ownership systematically induces preferential treatment for public hospitals over private ones, a bias that becomes significantly more acute under the pressure of upcoming elections.

How state ownership biases government support

Schmidt, Tafti & Mang: "State ownership biases government support—evidence from the financial crisis" The Journal of Law, Economics, and Organization, 2026, Vol. 00

190researchblog.substack.com

How "Amazon’s Choice" badges steer choice: We show that they drive engagement despite competing signals, yet disproportionately favors platform-sold products. Crucially, this boost persists after the badge is removed, potentially reinforcing long-term market advantages.

The Power of the Badge: Platform Endorsement in Online Retail

Lill, Gallitz, Stich & Spann: "How Platform Endorsement Shapes Consumer Search and Choice in Online Retail" CRC Discussion Paper No. 569

190researchblog.substack.com

Why incentive-compatibility isn't enough for data quality: Our new online experiment shows that popular belief elicitation methods like BSR and BDM fail to outperform simple, unincentivized introspection.

Do We Need Complex Incentives for Belief Elicitation Online?

Banko-Ferran, Burdea & Woon: "A Horserace of Methods for Eliciting Induced Beliefs Online" CRC Discussion Paper No. 562

190researchblog.substack.com

How does ambiguity affect trade between a price-setting seller and an ambiguity-sensitive buyer? We find that the right kind of ambiguous information makes both the buyer and seller better off than any possible unambiguous information.

Benefits and Challenges of Ambiguous Product Information

Lang & Wasser "Benefits and Challenges of Ambiguous Product Information" CRC Discussion Paper No. 564

190researchblog.substack.com

How structured management falls short in a crisis: Our study of Spanish firms shows that formal practices, while driving long-run productivity, paradoxically lead to lower performance during downturns because of higher short-run adjustment costs.

Why Intangibles Matter for the Effectiveness of Structured Management

Englmaier et. al: "Management Practices and Firm Performance During the Great Recession" CRC Discussion Paper No. 548

190researchblog.substack.com

Why we’ve been underestimating the economic engine of big cities: Our new analysis of office rents reveals that productivity gains are hidden in high property prices, meaning the true economic advantage of large cities is actually 33% to 50% higher than previously measured.

Why Urban Productivity Premiums Are Up to 50% Larger Than Previously Estimated

Ahlfeldt, Heblich, Seidel & Yin: "The Price of Productivity" CRC Discussion Paper No. 563

190researchblog.substack.com

How mystery products fail to captivate consumers despite the thrill of the unknown: We show that the mix of potential items is the main driver of value, with hidden odds inducing a steeper price discount when the outcomes vary significantly in quality or brand prestige.

How to Design Mystery Products That Work

Elgayar, Guhl, Stich & Spann: "Designed Uncertainty in Mystery Products" CRC Discussion Paper No. 565

190researchblog.substack.com

How selection bias masks the true size of the gender pay gap: Our new approach reveals that positive selection into employment systematically widens the gap for less educated workers at lower quantiles while narrowing it among top earners.

Why the Gender Pay Gap Is Wider Than It Looks for Low-Earners

Batbayar et. al: "Quantile Selection in the Gender Pay Gap" CRC Discussion Paper No. 560

190researchblog.substack.com

Why is there less beautiful architecture than we'd like? Our research shows that because neighbours get the benefits for free while builders pay extra, the market systematically undersupplies the architecture we prefer, making a construction subsidy the most efficient fix.

Why Market Forces Alone Undersupply Distinctive Architecture

Ahlfeldt, Pietrostefani & Zhang: "The Economics of Architecture" CRC Discussion Paper No. 561

190researchblog.substack.com

How AI restrictions can backfire in higher education: Our new experiment shows that unrestricted access to AI tutors fosters significantly better learning outcomes than restricted sessions by enabling gradual scaffolding rather than disruptive, intensive bursts of usage.

How Unrestricted AI Tutoring Enhances Student Learning

Fischer, Rau & Rilke: "AI Tutoring Enhances Student Learning Without Crowding Out Reading Effort" CRC Discussion Paper No. 557

190researchblog.substack.com