Research

Working Papers

"Pharmaceutical Innovation Collaboration, Evaluation, and Matching"

Abstract: This paper theoretically studies pharmaceutical innovation collaborations, where heterogeneous firms compete for heterogeneous academics. At an interim stage, the firm evaluates the project, which allows it to monitor academics and decide whether to terminate the project to avoid the loss from a future failure. This paper explores the contract, project termination strategy, and collaboration matching. The firm's innovation strategy (exploitations or explorations) determines the evaluation structure, which may affect the market equilibrium. By considering different innovation strategies, this paper shows that in each case, the equilibrium matching is unique (either positive or negative assortative). Consequently, the chosen innovation strategy plays a pivotal role in shaping equilibrium matching outcomes. These findings provide theoretical insights into pharma-academic alliances, shed light on the observed positive or negative assortative properties in the market, and advocate for the consideration of innovation strategies and evaluation structures in future research endeavors. Moreover, this paper also provides several empirical and policy implications.

(The title was "Performance Evaluation and Collaboration Matching between Industry and Academic")

"From Rivals to Allies? CEO Connections in an Era of Common Ownership"  with Dennis C. Hutschenreiter

Abstract: Can institutional shareholders shape the strategic decisions of top managers in their portfolio companies by leveraging CEOs' social connections? This paper reveals that firms with significant common ownership with a competitor are more likely to hire CEOs who have pre-existing social ties with the rival firm's chief executive. Such connections, established during the hiring process, correlate with enhanced performance metrics like return on assets and overall firm value for rivals. Additionally, this strategy decreases product similarity between the hiring firm and its competitors and boosts rivals' stock market returns during the hiring events of connected CEOs. Our findings are more pronounced among closer competitors. By analyzing the effects of exogenous changes in common ownership due to mergers among institutional investors, we discover that the presence of an additional common blockholder with a competitor doubles the likelihood that a firm will appoint a CEO with ties to the competitor’s chief executive.

Work in Progress

"Working from Home and Worker's Performance during Covid-19"  with Laura Guillén and Florian Kunze (The first draft is coming soon)

Abstract: We study the possible interaction effect of the autonomy of working from home and managerial responsibilities and the effect on workers' engagement, performance, exhaustion, and job satisfaction. We use the data as part of the Konstanz Home Office Study and find a negative impact of working from home on the manager's behaviors. It is important for the manager to stay in contact with his/her team members, but the pandemic made it hard to maintain the stability of this connection. Therefore, working from home may only increase the engagement, performance, and satisfaction of those workers without managerial responsibilities.

Publications

"Similar-to-me Effects in the Grant Application Process: Applicants, Panellists, and the Likelihood of Obtaining Funds" 

Abstract: We analyze if and how the characteristics of grant research panels affect the applicants’ likelihood of obtaining funding,  especially if particular types  of panels favour particular types  of applicants. We use the  UK’s  Engineering and  Physical  Sciences  Research  Council (EPSRC) award decisions to test the similar-to-me hypothesis for the first time in the grant context. Our main results indicate that panel members tend to favour more (or penalise less) applicants with similar characteristics to them, as the similar-to-me hypothesis suggests. We show, for instance, that the quality of the applicants is more critical for panels of high quality than for panels of relatively lower quality, that basic-oriented panels tend to penalise applied-oriented applicants,  and that discussions with fewer female members tend to penalise teams with more female applicants. As a whole, we show that similar-to-me effects are simultaneously at work for a  wide variety of functional,  job-related research characteristics as well as for more well-known demographic attributes.

"The Impact of Consumers’ Regret on Firms’ Decisions in a Durable Good Market," Journal of Economics, 139, 125–157, 2023

Abstract: This paper studies how the consumer's anticipated regret affects the firms' pricing decisions and profits in a duopoly market. I consider a two-period game with differentiated durable products, where an incumbent sells a basic version over two periods, and an entrant releases an improved version in period 2, of which the improved features are difficult to assess by the consumers. This ambiguity will lead to regret. This paper focuses on two types of regret: a consumer may regret purchasing in period 1 instead of purchasing in period 2 (action regret); a consumer who waited until period 2 might regret not buying in period 1 (inaction regret). The consumers can anticipate the possible regret, which will influence the consumer's decision-making. The results show that both types of anticipated regret may increase or decrease the incumbent’s profit. In contrast, action (inaction) regret always benefits (harms) the entrant. Besides, the analysis indicates that the improved version's quality may either strengthen or weaken the impact of regret. Moreover, this paper examines the robustness of the results under different setups.

"Education Choices and Job Market Characteristics" with Inés Macho-Stadler, Economics Letters, 223, 110985, 2023

Abstract:  We propose a simple three-stage model where heterogeneous schools compete via tuition fees, individuals with the ex-ante unknown ability make their education choices to (eventually) get a diploma and reveal their ability, and finally the job market determines the assignment of workers to firms and the equilibrium wages. In equilibrium, wages in the labor market and schools’ fees and individuals’ school choices are strongly related. We also analyze the effects of the existence of a public school or a subsidy on social welfare. 

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