Economics

‘Strategic Expert Committees and the Markets That Assess Them: A Laboratory Experiment.’’ (with Bauke Visser) Management Science paper SSRN working paper page

Committees of experts are widely used to make decisions. We experimentally investigate the relationship between decision making in committees and the assessment of the ability of committee members by evaluators, comparing observed behavior with theoretical predictions. Treatments vary in whether members care only about a state-dependent project payoff or also about assessments and whether evaluators can base their assessments only on the decision the committee makes or also on cheap-talk statements made by committee members on their confidence in the committee decision. Evidence for the equilibrium predictions is mixed; for example, contrary to theory, committees with a concern for their assessment do not distort their decisions more than committees without, whereas in line with theory, evaluators give higher assessments to committees that take the risky decision rather than the riskless. We analyze whether evaluators rationally base their assessments on observed behavior of committees using an orthogonality test. In treatments with cheap-talk statements, assessments are quite rational; in treatments without, they are too low on average. We investigate whether committees best reply to expected project payoffs and, in treatments in which members’ payoffs also depend on assessments, to predicted assessments conditional on observed committee behavior. In all treatments, committees respond to the possibilities to raise expected payoffs but do not use them as much as predicted by theory. We conclude by showing that the amount of information about committee members’ abilities that ends up in assessments is considerably larger when evaluators observe committees’ decisions and statements rather than only decisions.

‘Optimal Taxation with Multiple Incomes and Types ’ (with Kevin Spiritus, Etienne Lehmann and Floris Zoutman) < a href="https://econtheory.org/"> Forthcomming in Economic Theory SSRN working paper page

e analyze the optimal nonlinear income tax schedule for taxpayers with multiple incomes and multiple unobserved characteristics. We identify smoothness assumptions and extensions of the single-crossing conditions that enable the characterization of the optimum through variational calculus. Both the tax perturbation and mechanism design approaches yield identical results when the number of incomes equals the number of unobserved characteristics. Notably, the mechanism design approach requires slightly less stringent assumptions than the tax perturbation approach. Additionally, we introduce a numerical method to determine the optimal tax schedule. Applied to couples, the optimal isotax curves are nearly linear and parallel. Additional contributions include a Pareto efficiency test and a condition on primitives ensuring the sufficiency of the government’s necessary conditions, thereby guaranteeing the uniqueness of the solution. This note was initially written with Floris Zoutman. It is now a part of a project with Ettienne Lehmann's project "Optimal multidimensional and nonlinear taxation" and, Kevin Spiritus "Characterizations for Optimal Multidimensional Taxation with Multidimensional Heterogeneity of Agents" (2017). It is intended to be combined with these into a common paper

‘Fairness views and political preferences: evidence from a large and heterogeneous sample ’ (With Daniel Müller)

Published in Social Choice and Welfare (2020) Full text available, open journal article

We elicit distributional fairness ideals of impartial spectators using an incentivized experiment in a large and heterogeneous sample of the German population. We document several empirical facts: (i) egalitarianism is more popular than efficiency- and maxi-min ideals; (ii) females are more egalitarian than men; (iii) men are relatively more efficiency minded; (iv) left-leaning voters are more likely to be egalitarians, whereas right-leaning voters are more likely to be efficiency-minded; and (v) young and high-educated participants hold different fairness ideals than the rest of the population. Moreover, we show that fairness ideals predict preferences for redistribution and intervention by the government, as well as actual charitable giving, even after controlling for a range of covariates. This paper thus contributes to our understanding of the underpinnings of voting behavior and ideological preferences and to the literature that links laboratory measures and field behavior.

‘Flip a coin or vote: An experiment on the implementation and efficiency of social choice mechanisms’ (With Timo Hoffmann)

Published in Experimental Economics (2021) Full text available, open journal article

Corporate boards, experts panels, parliaments and cabinet, and even nations all take important decisions as a group. Selecting an efficient decision rule to aggregate individual opinions is paramount to the decision quality of these groups. In our experiment we elicit the preferences of group members over several important decision rules and test the empirical performance of these decision rules. We find that: 1) the efficiency of the theoretically optimal rule is not as robust as simple majority voting and theoretical efficiency rankings can reverse in the lab; 2) participation constraints often hinder implementation of more efficient mechanisms; 3) these constraints are relaxed if the less efficient mechanism is risky; 4) participation preferences appear to be driven by realized rather than theoretic pay-offs of the decision rules. These findings highlight the difficulty of relying on theory alone to predict what mechanism is better and acceptable to the participants in practice.

‘Balancing the Bids, Solutions for Unit Price Auctions ’ pdf available here

Many organizations use procurement tenders to buy large amounts of goods and services. Especially in the public sector the use of these reverse auctions has grown rapidly over the past decades. For the (reverse) unit price auction experience as well as theory has shown that they can attract skewed/unbalanced bids, i.e. bids where the price structure is distorted to take advantage of estimation errors. This paper offers two possible strategies that can make bid skewing less profitable, without resorting to ex-post rejection of bids or altering the nature of the unit-price procedure. I show that by allowing for some secrecy or post tender competition, bid-skewing is discouraged. This reduces the incentive to skew all-together and thus more closely aligns bidders and bid-takers interests in creating a contract profitable for both.

Accounting

‘The CFO’s predicament: Between controller and business partner.’ (with Bert de Groot, Rene Segers and Philip Hans Franses) pdf available here

Recently, the role of the CFO has shifted towards that of executive manager, but it is unclear how this influences their traditional financial conscience role. To shed light on this issue, we analyze the responses of 263 active CFOs, CEOs and non-executive directors in an interactive survey. The results show a striking difference between expectations about the CFO and CFO choices. Respondents expect the non-executives and the CFOs to be significantly less willing to take corporate risk than the CEOs. As expected, the CEOs demand less return and experience less risk than non-executives for a given investment scenario. Against all expectations, however, CFOs experience less risk and demand a lower return than even the CEOs. Furthermore, discussions with groups of directors show that their role in the board is defined by contrasting it to other boardroom roles. A shift in role of the CFO should, therefore, cause corresponding shifts in the roles of other board members. In our survey, the shift of the CFO appears to be misjudged, which calls into question the shift in other roles. These findings suggest that models on corporate governance should be reviewed in light of the new role of the CFO.

‘When Debit=Credit, The balance constraint in bookkeeping, its causes and consequences for accounting.’ SSRN working paper

This paper studies the balance constraint (debit=credit) in bookkeeping, its causes and its consequences for accounting. Balance in the ledger is shown to: 1) imply balance in journal entries and vice versa; 2) link the value definitions in the earnings statement and balance sheet; 3) have direct implications for valuation puzzles encountered in accounting, like accounting for OCI or stock-based compensation, and the difference between earnings or balance-sheet approaches to valuation. These system-wide effects on accounting highlight a design question: why do we have the balance constraint in bookkeeping? Backward-engineering shows 6 axioms that logically lead to double-entry bookkeeping. The balance constraint follows from the existence of a residual account: owner's equity. A class of equivalently powerful record keeping systems is shown to exist. These systems use double-entry bookkeeping without the monetary-unit assumption and can be used to record other outputs of the organization, like societal impact. These systems can be implemented in relational databases, a blockchain, or a different technology all together. The discussion covers links with other mathematical descriptions of bookkeeping and potential avenues for future research in the mathematics of bookkeeping.

Other research

‘Does local ownership matter? A comparative analysis of fourteen wind energy projects in the Netherlands’ (with Bas Brouwer, Rutger van Bergem, Linda M. Kamp, and Thomas Hoppe)

Energy Research & Social Science, 2025, full-text available here

Onshore wind energy projects are traditionally developed by commercial project developers. However, the development of these projects is increasingly encountering problems due to poor social acceptance and legal objections. In addition to commercial project developers, renewable energy cooperatives (REScoops) also develop onshore wind energy projects. These non-commercial entities are driven by local, ecological and egalitarian values and often strive for local ownership. This influences the rules-in-use they apply when planning and developing projects. In this paper, fourteen cases of onshore wind energy project development in the Netherlands are analysed using Elinor Ostrom’s Institutional Analysis and Development framework. The objectives are: (1) to investigate how the rules-in-use differ between fourteen selected onshore REScoop wind energy projects and onshore commercial wind energy projects in the Netherlands, (2) to investigate how the project duration and the number of submitted views and appeals differ between these two types of wind energy projects, and (3) to determine to what extent the observed differences in rules-in-use can explain the differences in project duration and the number of views and appeals submitted. The research design involves a stepwise approach, including qualitative within-case analysis, followed by quantitative cross-case statistical analysis. The results show that projects developed by REScoops differ on six out of seven rules, especially pay-off, position, and aggregation rules. For projects with a higher percentage of REScoop ownership, the total duration of project planning and development is shorter, there are fewer submitted views during the permit application process and fewer appeals to the Council of State.

‘On intimate relationships between healthcare professionals and patients: a nationwide cohort analysis of medical tribunal decisions in the Netherlands.’ (with Wim Rietdijk)

Published in BMC Medical Ethics, 2021, full-text available here

Background: We examine the incidence of medical tribunal decisions and disciplinary actions (DAs) against healthcare professionals (HCPs). In addition, we studied whether an intimate relationship between an HCP and patient as part of the medical tribunal decision is associated with an increased likelihood of disciplinary actions.
Methods: We conducted a nationwide cohort analysis on the downloadable medical tribunal decisions from a medical disciplinary tribunal in the Netherlands from 2010 to 2017.
Results: We found that 117 (2.8%) of the 4,046 medical tribunal decisions involved an alleged intimate relationship between an HCP and patient. In these medical tribunal decisions the likelihood of a disciplinary action was significantly increased (odds ratio [OR] 12.97, 95% Confidence Interval [95% CI] 7.11–23.64). In addition, we found that nurses and psychiatrists are more frequently accused of and receive disciplinary actions due to intimate relationships than other HCP groups.
Conclusions: We found a limited number of medical tribunal decisions involving an intimate relationship. Especially given the total number of medical tribunal decisions and the number of yearly HCP-patient interactions, the number appears small. Furthermore, an alleged intimate relationship or inappropriate sexual conduct is associated with an increased likelihood of disciplinary action. Future research should obtain statistics on the number of intimate relationships that actually start between HCPs and patients.

‘Swaying citizen support for EU membership: Evidence from a survey experiment of German voters ’ (with Nikoleta Yordanova, Mariyana Angelova, Roni Lehrer, and Moritz Osnabrügge)

Published in European Union Politics, June 2020, full-text available here

The United Kingdom’s 2016 ‘Brexit’ referendum vote to leave the European Union (EU) raised concerns that other countries would follow suit. This article examines how arguments about EU membership related to economic, cultural, political, and security and peace issues could influence how citizens would vote in EU membership referendums. Our two-wave survey experiment on a random sample of the German population and difference-in-differences analysis revealed that only fears of being outvoted in EU decision-making swayed German voters’ attitudes about EU membership, particularly voters with weaker EU support, little EU knowledge and low levels of political engagement. We therefore conclude that concerns about sovereignty loss can be drivers of Euroscepticism even in a country that has vast influence over EU decisions.

‘Designing the debate ’

This paper presents a model of legal systems as a set of optimal choices that follow from an initial choice of judgment function. Several prominent differences between civil and common law traditions, like the use of binding precedent, the activity level of the judge, and the relative levels of conflict intensity in the two traditions, are shown to be logical consequences of the different judgment functions chosen in these systems. This analysis highlights the co-evolution of material and procedural law. Furthermore, it is shown that both judgment fucntions, and thus the different forms of the legal systems, can be optimal solutions to a social maximization problem, and the solutions found are implementable. The winner-takes-all decision function that is characteristic of the Common law systems maximizes the power of incentives in the procedure and minimizes the amount of judicial interventions, thus maximizing individual freedom and responsibility for the outcomes. While the principle-based decision function of the Civil law system minimizes the amount of injustice in any individual case by allowing the judge to moderate the outcomes. The choices made in different countries can be attributed to differences in perception of justice and the differences between societal values that separate the Anglo-American and the Continental European nations more generally, while both are locally efficient and neither one is the one-size-fits-all optimum.

‘Bid Skewing in the EU, A Comparative Analysis. ’ (thesis written to obtain the LL.M. degree) pdf available here

I compare the US Federal Acquisition Regulation with the two big procurement directives in the EU. The FAR allows the bid-takers more freedom in rejecting skewed bids and therefore better protects bid-takers against this kind of gaming. I conclude that the EU should develop their own approach to deal with skewed bids, since difference in procedural law make simply copying the rules of the FAR impossible. Material legal provisions in the FAR could serve as a basis for future EU rules on skewed bids.