The OMDS/VGSE Vienna Joint Economics seminar is held weekly on Thursdays during the term.
VJE-Seminars scheduled in May:
- Speaker: Jan Eeckhout (UPF Barcelona)
- Title: The (Un)Fortunate Poor (with Rory McGee, Alireza Sepahsalari and Peter Spittal)
- Time: Thursday, May 28, 1:15 – 2:45 pm
- Location: Lecture Hall 12 (2-floor), OMP-1
- Abstract: We document a robust fact about the working poor: those who are wealth poor (i.e.with more negative wealth) tend to have higher average pay. Average pay decreases in wealth when wealth is negative, yet average pay increases for those with positive wealth. This V-shaped pattern, with a kink in the relationship between pay and wealth, is robust to controlling for observable characteristics, including age, race, education, and the type of debt --- as well as across datasets from many different countries. We propose a theory rooted in financial frictions that depend on income. Households with higher labor income are less financially constrained which leads to the V-shaped pattern that we document. We quantify the model and evaluate the welfare implications of redistributive policies.
- Speaker: Gautam Gowrisankaran (Columbia University)
- Title: Plugging in the Wind and Sun: Grid Integration, with Cost Externalities and Uncertainty
- Time: Thursday, May 7, 1:15 – 2:45 pm
- Location: Lecture Hall 12 (2-floor), OMP-1
- Abstract: There is currently 450% as much renewable power capacity seeking to connect to the U.S. electric grid as total installed capacity. This backlog may result from the fact that projects may congest infrastructure or share grid upgrade costs, with the interdependencies causing uncertainty over how these costs evolve. We study the interconnection queue by which projects connect to the California electricity market. We find that interconnection costs increase in nearby entry and projects awarded the right to use spare grid capacity are more likely to connect. We embed these descriptive findings in a dynamic equilibrium model where potential projects choose to enter the queue, face interdependent costs that evolve over time, and ultimately decide whether to exit or connect. We use our estimated model to analyze how counterfactual policies that charge projects fees for remaining in the queue or auction spare capacity would alter renewable investment and interconnection costs.
- Speaker: Antonio Rosato (Deakin Business School)
- Title: The Missing “Loser’s Curse”: Experimental Evidence on Belief-Based Models in Common-Value Auctions
- Time: Thursday, May 21, 1:15 – 2:45 pm
- Location: Lecture Hall 12 (2-floor), OMP-1
- Abstract: Models based on mistaken beliefs, such as Cursed Equilibrium and Level-k Thinking, are among the leading explanations for theWinner’s Curse observed in common-value auctions. We argue that these models predict a Loser’s Curse in other auctions formats. Using an experiment with a within-subject design, we test for the presence of both curses in common-value uniform-price auctions. At the aggregate level, we find evidence of a strongWinner’s Curse, but no evidence of a Loser’s Curse. These aggregate findings cast some doubts on the ability of belief-based models to fully explain the Winner’s Curse by themselves. Indeed, at the individual level, the behavior of most subjects is better described by Joy of Winning and Quantal Response Equilibrium. We also find suggestive evidence of failures of contingent thinking: subjects behave closer to the rational benchmark in a non-strategic task when the relevant contingency is made more salient.
