Florian Morath

Evolutionarily Stable In-Group Favoritism and Out-Group Spite in Intergroup Conflict

We study conflict between two groups of individuals. Using Schaffers (1988) concept of evolutionary stability we provide an evolutionary underpinning for in-group altruism combined with spiteful behavior towards members of the rival out-group. We characterize the set of evolutionarily stable combinations of in-group favoritism and out-group spite and find that an increase in in-group altruism can be balanced by a decrease in spiteful behavior towards the out-group.

Information sharing in contests

We study the incentives to share private information ahead of contests, such as markets with promotional competition, procurement contests, or R&D. We consider the cases where firms have (i) independent values and (ii) common values of winning the contest. In both cases, when decisions to share information are made independently, sharing information is strictly dominated. With independent values, an industry-wide agreement to share information can arise in equilibrium. Expected effort is lower with than without information sharing. With common values, an industry-wide agreement to share information never arises in equilibrium. Expected effort is higher with than without information sharing.

Alliances In The Shadow Of Conflict

Victorious alliances often fight about the spoils of war. This article presents an experiment on the determinants of whether alliances break up and fight internally after having defeated a joint enemy. First, if peaceful sharing yields an asymmetric rent distribution, this increases the likelihood of fighting. In turn, anticipation of the higher likelihood of internal fight reduces the alliance’s ability to succeed against the outside enemy. Second, the option to make nonbinding nonaggression declarations between alliance members does not make peaceful settlement within the alliance more likely. Third, higher differences in the alliance players’ contributions to alliance effort lead to more internal conflict and more intense fighting.

Social Mobility and Redistributive Taxation

We investigate redistributive taxation in a political economy experiment and determine how different patterns of social mobility affect the choices of redistributional taxes. In the absence of social mobility, voters choose tax rates that are very well in line with the prediction derived in the standard framework by Meltzer and Richard (1981). However, past or future changes in the income hierarchy affect the choice of the tax rate in the current period. The same is true for social mobility within the period to which the tax rate choice applies and for the case where the choice of the tax rate takes place behind the veil of ignorance. Due to our design of the experiment, these strong effects of own social mobility cannot be attributed to social or other-regarding preferences.

Aspirations of the Middle Class: Voting on Redistribution and Status Concerns

This paper analyzes the role of narrowly selfish and other-regarding preferences for the median voter in a Meltzer-Richard (1981) framework. We use computerized and real human co-players to distinguish between these sets of motivations. Redistribution to real co-players has a negative effect on the median voters tax rate choice. Further, perceived income mobility decreases the desired amount of redistribution. Our results suggest the importance of concerns about own mobility as well as status concerns of the median voter who tends to keep distance to the low-income group, whereas inequity aversion does not play a role in the political economy context.

Volunteering and the strategic value of ignorance

Private provision of public goods often takes place as a war of attrition: individuals wait until someone else volunteers and provides the good. After a certain time period, however, one individual may be randomly selected. If the individuals are uncertain about their cost of provision, but can find out about this cost ahead of the volunteering game, a strategic value is attached to the information, and individuals may prefer not to learn their cost of provision. If the time horizon is sufficiently short, in equilibrium only one individual may acquire information about his cost. For a long time horizon, acquiring information is strictly dominant. The time limit is an important instrument in influencing the efficiency of the volunteering game.

Online shopping and platform design with ex ante registration requirements

We study platform design in online markets in which buying involves a (nonmonetary) cost for consumers caused by privacy and security concerns. Firms decide whether to require registration at their website before consumers learn relevant product information. We derive conditions under which a monopoly seller benefits from ex ante registration requirements and demonstrate that the profitability of registration requirements is increased when taking into account the prospect of future purchases or an informational value of consumer registration to the firm. Moreover, we consider the effectiveness of discounts (store credit) as a means to influence the consumers’ registration decision. Finally, we confirm the profitability of ex ante registration requirements in the presence of price competition. The online appendix is available at https://doi.org/10.1287/mnsc.2016.2595. This paper was accepted by J. Miguel Villas-Boas, marketing.

Technology Transfers for Climate Change

This paper considers investments in cost-reducing technology in the context of contributions to climate protection. Contributions to mitigating climate change are analyzed in a two-period model where later contributions can be based on better information, but delaying the contribution to the public good is costly because of irreversible damages. We show that, when all countries have access to the new technology, countries have an incentive to invest in technology because this can lead to an earlier contribution of other countries and therefore reduce a country’s burden of contributing to the public good. Our results provide a rationale for the support of technology sharing initiatives.

Evolutionary Determinants of War

This paper considers evolutionarily stable decisions about whether to initiate violent conflict rather than accepting a peaceful sharing outcome. Focusing on small sets of players such as countries in a geographically confined area, we use the concept of evolutionary stability in finite populations. We find that players’ evolutionarily stable preferences widen the range of peaceful resource allocations that are rejected in favor of violent conflict, compared to the Nash equilibrium outcomes. Relative advantages in fighting strength are reflected in the equilibrium set of peaceful resource allocations.

The Taxation of Bilateral Trade with Endogenous Information

This paper analyzes the effects of taxation on trade in a decentralized market. We show that a tax on profits and a transaction tax have opposite implications for information acquisition and trade in the canonical take-it-and-leave-it offer bargaining model. A (marginal) increase of a transaction tax can lead to more information production and lower the probability of efficient trade. In contrast, a (marginal) increase of a profit tax can reduce the incentive to produce information and increase the probability of efficient trade. The taxation of profits can be efficiency enhancing when information is endogenous, while it has no effect when private information is exogenous.