The OMDS/VGSE Vienna Joint Economics seminar is held weekly on Thursdays during the term.
VJE-Seminars scheduled in October:
- Speaker: Chiara Lacava (University of Frankfurt)
- Title: Why are some regions so much more productive than others?
- Time: Thursday, Oct. 31, 1:15 – 2:45 pm
- Location: Lecture Hall 9, OMP-1
- Abstract: Differentials in aggregate labor productivity across regions could be due to differences (1) in workers' skills, (2) in firms' technologies, (3) in how efficiently skills and technologies are matched, and (4) in institutional factors specific to each region. I introduce a framework to separately identify each determinant using matched employer-employee data. I estimate skills by comparing the wages of each worker with those of co-workers in the same firm and in the same region; technologies by comparing the productivity of firms with the same workforce's skills and in the same region; and positive complementarities between skill and technology by measuring how workers and firms jointly contribute to productivity in the same region through a model of the aggregate production function. Finally, I disentangle region-specific factors from technologies since some firms have plants in more than one region. In an application to the Italian regions, I find that differences in firms' technologies account for 64% of the large productivity differentials, while differences in region-specific factors and in workers' skills account for 16% and 11%, respectively. Differences in the allocation of skills to technologies explain the remaining 10% of productivity differences, and optimal reassignment of workers increases productivity levels up to 11%.
- Speaker: Franz Dietrich (Paris School of Economics)
- Title: Welfare versus Utility
- Time: Thursday, Oct. 3, 1:15 – 3 pm
- Location: Lecture Hall 9, OMP-1
- Abstract: Ever since the Harsanyi-Sen debate, it is controversial whether someone's welfare should be measured by her von-Neumann-Morgenstern (VNM) utility, for instance when analyzing welfare intensity, social welfare, interpersonal welfare comparisons, or welfare inequality. As we show, natural working assumptions lead to a different welfare measure, which addresses familiar concerns about VNM utility while also requiring only ordinal evidence, such as observed choices or self-reported comparisons. Using this measure instead of VNM utility has different implications, for instance for social welfare and policy recommendations, in riskless or risky contexts. VNM utility is shown to be have two determinants, namely welfare and attitude to risk in welfare.
- Speaker: Carlos Ramirez (Federal Reserve Board)
- Title: Contagion Uncertainty and Macroprudential Policies
- Time: Thursday, Oct. 17, 1:15 – 2:45 pm
- Location: Lecture Hall 9, OMP-1
- Abstract: I develop a model for studying how contagion uncertainty influences the risk-taking behavior of interrelated institutions. As this uncertainty alters the perception of contagion risk, it can both exacerbate market equilibrium inefficiencies—stemming from institutions failing to internalize the systemic impact of their actions—and serve as a deterrent against excessive risk-taking. I use this insight to shed light on how contagion uncertainty can be incorporated into macroprudential policy design via tax/subsidy schemes, portfolio regulation, and initiatives to mitigate uncertainty.
- Speaker: Mats Köster (Central European University)
- Title: A Theory of Digital Ecosystems (joint with Paul Heidhues and Botond Koszegi)
- Time: Thursday, Oct. 24, 1:15 – 2:45 pm
- Location: Lecture Hall 9, OMP-1
- Abstract: We develop a theory of digital ecosystems built on the premise that a multi-market firm can steer users it has in one market toward its products in other markets. Due to this “cross-market leverage,” a leader in an “access-point” market (where users begin their online journeys) derives a high value from offering services in connected markets (where users continue their journeys), and can thus make profitable takeovers. Indeed, because the firm has the outside option of acquiring, and steering users toward, its target's competitor, it can take over the target at a discount. In contrast, other firms have no or smaller incentives for takeovers, explaining why ecosystems grow out of market leaders at access points. Conversely, cross-market leverage also implies that once an ecosystem has grown, it has an increased value of controlling access points, so it may go to great lengths to dominate these markets. Our theory suggests that ecosystems have mixed implications for consumer welfare. Under plausible assumptions, a to-be ecosystem takes over market leaders, and this consolidation of good services across markets benefits consumers in the short run. But an ecosystem’s takeovers and dominance of access points lower incentives for entry and innovation, and lower the efficiency of access-point markets with superior alternatives. Hence, the long-run welfare implications of ecosystems are often negative.
