Economics - Research Publications
Now showing items 1-12 of 694
By chance or by choice? Biased attribution of others' outcomes when social preferences matter
Decision makers in positions of power often make unobserved choices under risk and uncertainty. In many cases, they face a trade-off between maximizing their own payoff and those of other individuals. What inferences are made in such instances about their choices when only outcomes are observable? We conduct two experiments that investigate whether outcomes are attributed to luck or choices. Decision makers choose between two investment options, where the more costly option has a higher chance of delivering a good outcome (that is, a higher payoff) for the group. We show that attribution biases exist in the evaluation of good outcomes. On average, good outcomes of decision makers are attributed more to luck as compared to bad outcomes. This asymmetry implies that decision makers get too little credit for their successes. The biases are exhibited by those individuals who make or would make the less prosocial choice for the group as decision makers, suggesting that a consensus effect may be shaping both the belief formation and updating processes. Supplementary Information: The online version contains supplementary material available at 10.1007/s10683-021-09731-w.
The Role of Agency in Competition Law: The Australian Flight Centre Case
(Thomson Reuters (Professional), 2021-12-01)
Australian Competition and Consumer Commission v Flight Centre Travel Group Ltd (Flight Centre) was decided by the High Court in December 2016. The Australian Competition and Consumer Commission alleged that Flight Centre had engaged or attempted to engage in price fixing with the airlines by seeking agreement to a Most Favoured Nation provision. A central issue in the case was whether or not Flight Centre was acting as agent for the airlines. This article discusses how changes in business models involving agency arrangements have caused confusion about the relationship between the parties when assessing alleged anti-competitive conduct. It explains the approach adopted in the United States and in the European Union to determine whether a party is an agent. Following from this, the basis for the various court rulings in Flight Centre are discussed – the finding that Flight Centre attempted to fix prices, despite being found to be an agent for the airlines. The findings in Flight Centre are then compared to the cases involving online booking portals in Europe and whether these cases may have informed the approach in Flight Centre is considered. Some conclusions are then drawn concerning the treatment of agency arrangements in the final section.
Consumer Search in Retail Gasoline Markets
This paper develops novel direct tests for search behavior in retail gasoline markets. We exploit a unique market-level dataset that allows us to directly measure search intensity with daily web traffic data from a gasoline price reporting website and perfectly measure daily changes in price levels and dispersion. Our simple yet powerful tests provide strong evidence of both cross-sectional and intertemporal price search behavior.