Matthias Weber
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Prof. Dr.
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Weber
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Matthias
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matthias.weber@unisg.ch
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+41 71 224 70 76

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Publication

Monetary policy under behavioral expectations: Theory and experiment

, Hommes, Cars , Massaro, Domenico , Weber, Matthias

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Publication

Subsidies versus intellectual property rights when innovators operate in two markets

2023-04-24 , Skliaustyte, Egle , Weber, Matthias

Intellectual property rights are monopoly rights, which have undesirable welfare properties. Therefore, several studies suggest using rewards as incentives for innovation instead. However, these studies have thus far had little effect on actual policy, possibly because such rewards may be difficult to implement in practice. We suggest a new way of providing incentives to originators, which is easier to implement. Our suggestion can be used if there is an additional market in which originators operate, where copying is not easily possible. In this case, intellectual property rights in one market can be replaced by subsidies in the other market. Taking the music industry as example, copyrights in the records market could be replaced by subsidies in the market for live performances. We develop a partial equilibrium model that can be used to analyze in which cases the replacement of intellectual property rights in one market with subsidies in another market is welfare improving and better for the originator. A numerical application example suggests that the subsidy scheme may indeed be better in the music industry. The subsidy scheme can be implemented as a voluntary option, which would even be possible without changing the legal framework of intellectual property rights.

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Publication

Choosing the rules: Preferences over voting systems for assemblies of representatives

2020-06-01 , Weber, Matthias

There are many situations where different groups make collective decisions by voting in an assembly or committee in which each group is represented by a single person. There is a great deal of theoretical, normative literature on the question of what voting system such an assembly should use, but a consensus is lacking. Instead of studying theoretical concepts on the design of voting systems, I ask which voting systems individuals actually prefer. This is important for the legitimacy and acceptance of voting institutions. To answer this question, I design a laboratory experiment in which participants choose voting systems for assemblies when they do not know which group they will be in (and, as a control, when they do know it). Behind the veil of ignorance, participants predominantly choose voting systems that allocate more voting power to larger groups than the most prominent theoretical concept suggests. In front of the veil of ignorance, participants predominantly choose voting systems favoring their own group.

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Publication

The Non‐Equivalence of Labour Market Taxes: A Real‐Effort Experiment

2017-09-01 , Weber, Matthias , Schram, Arthur

Under full rationality, a labour market tax levied on employers and a corresponding income tax levied on employees are equivalent. With boundedly rational agents, this equivalence is no longer obvious. In a real‐effort experiment, we study the effects of these taxes on preferences concerning the size of the public sector, subjective well‐being, labour supply and on‐the‐job performance. Our findings suggest that employer‐side taxes induce preferences for a larger public sector. Subjective well‐being is higher under employer‐side taxes while labour supply is lower, at least at the extensive margin. We discuss three mechanisms that may underlie these results.

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Publication

The role of the end time in experimental asset markets

2024 , Anita Kopányi-peuker , Matthias Weber

There are hundreds of scientific articles on experimental asset markets. Almost all of them use a short and definite horizon. This may be one of the starkest differences between experimental settings and real-world financial markets, which usually have indefinite and comparatively long horizons. We analyze the implications of different end time assumptions in an asset market experiment in which we vary the length of the horizon and whether the end time is definite or indefinite. We find very similar price dynamics with recurring bubbles in all treatments.

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Publication

Experience Does not Eliminate Bubbles: Experimental Evidence

2021-09-01 , Kopányi-Peuker, Anita , Weber, Matthias

We study the role of investor experience in the formation of asset price bubbles.We conduct a call market experiment in which participants trade assets with each other and a learning-to-forecast experiment in which participants only forecast future prices (while trade based on these forecasts is computerized). Each experiment comprises three treatments varying the information that participants receive about the fundamental value. Each experimental market is repeated three times. Throughout, we observe sizable bubbles that persist despite participant experience. Our findings in the call market experiment contrast with those in the literature. Our findings in the learning-to-forecast experiment are novel.

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Publication

The effects of listing authors in alphabetical order: A review of the empirical evidence

2018-07-01 , Weber, Matthias

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Publication

Regulation and the demand for credit default swaps in experimental bond markets

2024-06-01 , Matthias Weber , John Duffy , Arthur Schram

Credit default swaps (CDS) played an important role in the financial crisis of 2008 leading to calls for regulation. Here, we seek to understand the impact of a CDS regulation that restricts the possibility to hold naked CDS. We use a controlled laboratory experiment analyzing CDS pricing in a bond market subject to default risk. Our results show that the regulation achieves the goal of increasing the use of CDS for hedging purposes while reducing the use of CDS for speculation. This success does not come at the expense of lower initial public offering (IPO) prices for the bonds or worse pricing of bonds or CDS in the secondary market.

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Publication

The Behavioral Economics of Currency Unions: Economic Integration and Monetary Policy

2020-03 , Bertasiute, Akvile , Massaro, Domenico , Weber, Matthias

We analyze different behavioral models of expectation formation in a multi-country New Keynesian currency union model. Our analyses yield the following robust results. First, economic integration is of crucial importance for the stability of the economic dynamics in a currency union. Second, when the economic dynamics are unstable, more activist monetary policy does not lead to stable economic dynamics. These findings have natural counterparts in the rational expectations version of the model: there, economic integration is crucial for the determinacy of the equilibrium and when the equilibrium is indeterminate, more activist monetary policy does not lead to a determinate equilibrium. In an application to euro area data, we find that the behavioral macroeconomic model outperforms its rational counterpart in terms of prediction performance.

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Publication

An Experimental Study of Bond Market Pricing

2018-08-24 , Weber, Matthias , Duffy, John , Schram, Arthur

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