Markus Walzl

Stochastic stability for roommate markets

We show that for any roommate market the set of stochastically stable matchings coincides with the set of absorbing matchings. This implies that whenever the core is non-empty (e.g., for marriage markets), a matching is in the core if and only if it is stochastically stable, i.e., stochastic stability is a characteristic of the core. Several solution concepts have been proposed to extend the core to all roommate markets (including those with an empty core). An important implication of our results is that the set of absorbing matchings is the only solution concept that is core consistent and shares the stochastic stability characteristic with the core.

Charge-dependent nucleon–nucleon potential from chiral effective field theory

Abstract We discuss charge-symmetry and charge-independence breaking in a chiral effective field theory approach for few-nucleon systems based on a modified Weinberg power counting. We construct a two-nucleon potential with bound and scattering states generated by means of a properly regularized Lippmann–Schwinger equation. We systematically introduce strong isospin-violating and electromagnetic operators in the theory. We use standard procedures to treat the Coulomb potential between two protons in momentum space. We present results for phase shifts in the proton–proton, neutron–proton and the neutron–neutron systems. We discuss the various contributions to charge dependence and charge-symmetry breaking observed in the nucleon–nucleon scattering lengths.

Elastic electron–deuteron scattering in chiral effective field theory

Abstract We calculate elastic electron–deuteron scattering in a chiral effective field theory approach for few-nucleon systems based on a modified Weinberg power counting. We construct the current operators and the deuteron wave function at next-to-leading (NLO) and next-to-next-to-leading (NNLO) order simultaneously within a projection formalism. The leading order comprises the impulse approximation of photons coupling to point-like nucleons with an anomalous magnetic moment. At NLO, we include renormalizations of the single nucleon operators. To this order, no unknown parameters enter. At NNLO, one four-nucleon–photon operator appears. Its strength can be determined from the deuteron magnetic moment. We obtain not only a satisfactory description of the deuteron structure functions and form factors measured in electron–deuteron scattering but also find a good convergence for these observables.

Truth, Trust, and Sanctions: On Institutional Selection in Sender–Receiver Games*

We conduct a laboratory experiment to investigate the impact of institutions and institutional choice on truth-telling and trust in sender-receiver games. We find that in an institution with sanctioning opportunities, receivers sanction predominantly after having trusted lies. Individuals who sanction are responsible for truth-telling beyond standard equilibrium predictions and are more likely to choose the sanctioning institution. Sanctioning and non-sanctioning institutions coexist if their choice is endogenous and the former shows a higher level of truth-telling but lower material payoffs. It is shown that our experimental findings are consistent with the equilibrium analysis of a logit agent quantal response equilibrium with two distinct groups of individuals: one consisting of subjects who perceive non-monetary lying costs as senders and non-monetary costs when being lied to as receivers and one consisting of payoff maximizers.

Truth, Trust, and Sanctions: On Institutional Selection in Sender–Receiver Games

We conduct a laboratory experiment to investigate the impact of institutions and institutional choice on truth-telling and trust in sender-receiver games. We find that in an institution with sanctioning opportunities, receivers sanction predominantly after having trusted lies. Individuals who sanction are responsible for truth-telling beyond standard equilibrium predictions and are more likely to choose the sanctioning institution. Sanctioning and non-sanctioning institutions coexist if their choice is endogenous and the former shows a higher level of truth-telling but lower material payoffs. It is shown that our experimental findings are consistent with the equilibrium analysis of a logit agent quantal response equilibrium with two distinct groups of individuals: one consisting of subjects who perceive non-monetary lying costs as senders and non-monetary costs when being lied to as receivers and one consisting of payoff maximizers.

Incentive schemes, private information and the double-edged role of competition for agents

This paper examines the effect of imperfect labor market competition on the efficiency of compensation schemes in a setting with moral hazard, private information and risk-averse agents. Two vertically differentiated firms compete for agents by offering contracts with fixed and variable payments. Vertical differentiation between firms leads to endogenous, type-dependent exit options for agents. In contrast to screening models with perfect competition, we find that existence of equilibria does not depend on whether the least-cost separating allocation is interim efficient. Rather, vertical differentiation allows the inferior firm to offer (cross-)subsidizing fixed payments even above the interim efficient level. We further show that the efficiency of variable pay depends on the degree of competition for agents: For small degrees of competition, low-ability agents are under-incentivized and exert too little effort. For large degrees of competition, high-ability agents are over-incentivized and bear too much risk. For intermediate degrees of competition, however, contracts are second-best despite private information.

Evidence Dependence of Fine Reductions in Corporate Leniency Programs

We analyze whether corporate leniency programs should grant full immunity to the first self-reporting firm regardless of the amount of evidence provided. We distinguish between two firms, one of them providing high and one only low evidence. We show that awarding full amnesty also to the low evidence provider is suboptimal. Distinguishing fines between the two firms leads to the same percentage of self-reporting and to a lower cartel frequency. For the high evidence provider, full amnesty can but does not have to be optimal.

Subjective Performance Evaluations, Self-Esteem, and Ego-Threats in Principal-Agent Relations

We conduct a laboratory experiment with agents working on and principals benefiting from a real effort task in which the agents’ effort/performance can only be evaluated subjectively. Principals give subjective performance feedback to agents and agents have an opportunity to sanction principals. We find that agents sanction whenever the feedback of principals is below their subjective self-evaluations even if the agents’ payoff is independent of the principals’ feedback. Based on our experimental analysis we propose a principal-agent model with subjective performance evaluations that accommodates this finding. We analyze the agents’ (optimal) behavior, optimal contracts, and social welfare in this environment.