Hi! I am a researcher in Applied Microeconomics focusing on Behavioral Industrial Organization and Cultural/Institutional Economics. I research how social relationships interact with economic institutions.

I will be on the 2022/23 job market and available for interviews in December and January.

You can reach me at paul.schaefer@uni-bonn.de.

You can find my CV here.

Job market paper

The Effect of Social Networks on Market Efficiency

Abstract This paper examines the effects of social networks on market efficiency and prices in a laboratory experiment with real-world friendships and a market with substitutes and complements. I make social networks exogenous by assigning real-world friends to different roles in the market. Friendships act like soft mergers in two ways: First, friendships between sellers of complements lower prices (increase efficiency), and friendships between sellers of substitutes increase prices (decrease efficiency). Second, an adjusted common ownership model (linear directed altruism) rationalizes the data.

Working papers

Managing Bidder Learning in Retail Auctions (with Simon Schulten (his JMP))

Abstract When firms exploit behavioral biases it is natural to think that, eventually, consumers will learn to avoid their mistakes, which limits exploitation. Profit maximizing firms, however, have an incentive to undermine such learning. We study these learning dynamics in a multi-unit descending price auction setting with a simultaneous fixed price offer. We analyze 8 million bids from over 280.000 unique bidders in retail auctions. Consumers frequently bid more than the fixed price offered by the same seller. Depending on rival bidders actions, those overbids sometimes lead to paying more than the fixed price (overpaying). We argue overpaying increases saliency of the consumers’ mistake by making it payoff relevant and thereby may effect consumer learning. Indeed, bidders who overpaid subsequently overbid less often and are more likely to refrain from submitting a bid compared to bidders who overbid but did not overpay. Methodologically, we discuss identification of our treatment effects using causal graphs and show how these treatment effects identify a three-type structural model of bidder behavior with learning dynamics.

Norm Prevalence and Interdependence: Evidence from a Large-Scale Historical Survey of German speaking Villages (with Radost Holler)

Abstract We use large-scale survey data of German speaking villages from the 1930's to investigate drivers of cooperation, gender, and religious norms. Through geographic cluster analysis, we show that inter-regional variation explains only little heterogeneity in norms. Villages in the same physical and institutional environment still maintain different norms. We argue that local differences in the structure of social relationships can explain intra-regional heterogeneity in norms. We focus on a community's ability to transmit and enforce norms to derive theoretical links between correlates of community social relationships and the number of norms it maintains (norm prevalence). Empirically we find that: (1) norm prevalence is positively related to three correlates of community social relationships: religiously homogeneous villages, villages that border on other villages with a different majority religion, and villages with more within-village social gatherings; (2) villages with stronger community-level social relationships are also less likely to segment their reference group for the cooperation norm to smaller social units; (3) cooperation norms make other norms more likely.