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Talking Economics is a live-streamed public lecture series with CERGE-EI's researchers introducing their latest work.

This time we will focus on Applied Economics with our faculty members Christian Ochsner (Mobilizing History) and Ole Jann (Privacy on the Internet)

Register by filling this form and join us in the Digital Media Center at CERGE-EI or online on Friday, 14 February 2020 at 10:00. 

Christian Ochsner: Mobilizing History
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The Nobel Laureate William Faulkner used to say "The past is never dead. It's not even past." In the study "Mobilizing History", we show that this quote holds true also for out-group sentiments and radical political voting. We zoom into municipalities in East Austria. Some of the municipalities were pillaged by Turkish troops during the sieges of Vienna in the 16th and 17th centuries, whereas others were not. By 2005, the far-right populist Freedom Party of Austria (FPÖ) began to campaign against the Turkish and Muslim minorities by linking present-day stereotypes about Turks and Muslims to Turkish atrocities during the sieges of Vienna some 300 to 500 years ago. We find that populist campaigning is very effective when it is linked to historical narratives. Vote shares for the far-right and anti-Muslim sentiments surged after the launch of the campaigns in once pillaged places compared to (neighboring) non-attacked places. By contrast, these variables do not show any differences among pillaged and non-pillaged places before the campaigns. In addition, we find that the Turkish minority in East Austria has started to leave the former pillaged places. Historical narratives are thus a powerful tool to convince people, trigger sentiments and influence voting decisions. The study shows that the long-gone past can be awakened and affects people's decisions from time to time, but not permanently.

Ole Jann: Privacy on the Internet
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Almost all of us use our smartphones many times a day, are active on social media and do much of our banking and other business online. At the same time, many of the fastest-growing companies in the world are built on collecting, processing and re-selling our data, and governments all over the world are engaging in massive online surveillance. How should we think about the problems and trade-offs associated with these developments? Is more data always better, and are privacy concerns just an obstacle on the way to a better society? Should we leave it to the companies and markets to regulate themselves, or is there a case for governments to get active? I will give a brief introduction into my research on these questions.

Franz Ostrizek

Princeton University, USA
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Author: Franz Ostrizek

Abstract: We study a dynamic principal-agent setting in which both sides learn about the importance of effort. The quality of the agent’s output is not observed directly. Instead, the principal jointly designs an evaluation technology and a wage schedule. More precise performance evaluation reduces current agency costs but promotes learning, which is shown to increase future agency costs. As a result, the optimal evaluation technology is both imprecise and tough: a bad performance is always sanctioned, but a good one is not always recognized. We also study the case in which principal and agent have different priors, for instance because the agent has incorrect beliefs about his abilities. If the agent is overconfident, the principal uses a tough evaluation structure to preserve the agent’s profitable misperception. For an underconfident agent, by contrast, she either uses a fully informative evaluation in order to promote learning and eliminate costly underconfidence, or is lenient if learning is too costly.
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Full Text: “Vague by Design: Performance Evaluation and Learning from Wages”