Aurore Burietz, Steven Ongena, Matthieu Picault, Taxing banks leverage and syndicated lending: A cross-country comparison, International Review of Law and Economics, Vol. 73, 2023. (Journal Article)

Between 2010 and 2012 and with bank stability as the ultimate target, five European countries implemented a tax levy on banks’ liabilities thereby decreasing the cost of equity relative to the cost of debt. Using a difference-in-differences approach we assess the impact of this tax levy on banks’ participation in the syndicated loan market. We further investigate the impact of the tax levy along bank size and capital structure. We find that banks located in countries where the tax levy was implemented supply more credit. This increase is more significant for larger lenders and banks that are more capital constrained. |
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Simon Laumer, Efficient compact linear programs for network revenue management, Optimization Letters, Vol. 17 (2), 2023. (Journal Article)
 
We are concerned with computing bid prices in network revenue management using approximate linear programming. It is well-known that affine value function approximations yield bid prices which are not sensitive to remaining capacity. The analytic reduction to compact linear programs allows the efficient computation of such bid prices. On the other hand, capacity-dependent bid prices can be obtained using separable piecewise linear value function approximations. Even though compact linear programs have been derived for this case also, they are still computationally much more expensive compared to using affine functions. We propose compact linear programs requiring substantially smaller computing times while, simultaneously, significantly improving the performance of capacity-independent bid prices. This simplification is achieved by taking into account remaining capacity only if it becomes scarce. Although our proposed linear programs are relaxations of the unreduced approximate linear programs, we conjecture equivalence and provide according numerical support. We measure the quality of an approximation by the difference between the expected performance of an induced policy and the corresponding theoretical upper bound. Using this paradigm in numerical experiments, we demonstrate the competitiveness of our proposed linear programs. |
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Liudmila Zavolokina, Noah Zani, Gerhard Schwabe, Designing for Trust in Blockchain Platforms, IEEE Transactions on Engineering Management, Vol. 70 (3), 2023. (Journal Article)
 
Trust is a crucial component for successful transactions regardless of whether they are executed in physical or virtual spaces. Blockchain technology is often discussed in the context of trust and referred to as a trust-free, trustless, or trustworthy technology. However, the question of how the trustworthiness of blockchain platforms should be demonstrated and proven to end users still remains open. While there may be some genuine trust in the blockchain technology itself, on an application level trust in an IT artifact needs to be established. In this article, we examine how trust-supporting design elements may be implemented to foster an end user's trust in a blockchain platform. We follow the design science paradigm and suggest a practically useful set of design elements that can help designers of blockchain platforms to build more trustworthy systems. |
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Silke Adam, Aleksandra Urman, Dorothee Arlt, Teresa Gil-Lopez, Mykola Makhortykh, Michaela Maier, Media Trust and the COVID-19 Pandemic: An Analysis of Short-Term Trust Changes, Their Ideological Drivers and Consequences in Switzerland, Communication Research, Vol. 50 (2), 2023. (Journal Article)

We analyze short-term media trust changes during the COVID-19 pandemic, their ideological drivers and consequences based on panel data in German-speaking Switzerland. We thereby differentiate trust in political information from different types of traditional and non-traditional media. COVID-19 serves as a natural experiment, in which citizens’ media trust at the outbreak of the crisis is compared with the same variables after the severe lockdown measures were lifted. Our data reveal that (1) media trust is consequential as it is associated with people’s willingness to follow Covid-19 regulations; (2) media trust changes during the pandemic, with trust levels for most media decreasing, with the exception of public service broadcasting; (3) trust losses are hardly connected to ideological divides in Switzerland. Our findings highlight that public service broadcasting plays an exceptional role in the fight against a pandemic and that contrary to the US, no partisan trust divide occurs. |
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Björn Bartling, Yagiz Özdemir, The limits to moral erosion in markets: Social norms and the replacement excuse, Games and Economic Behavior, Vol. 138, 2023. (Journal Article)
 
This paper studies the impact of a key feature of competitive markets on moral behavior: the possibility that a competitor might step in and conclude the deal if a conscientious market actor forgoes a profitable business opportunity for ethical reasons. In a series of experiments, we study whether people invoke the replacement excuse, that is, the argument “if I don't do it, someone else will,” to justify narrowly self-interested actions. Our data are consistent with the possibility that the existence of a clear social norm of moral conduct can limit the impact of the availability of the replacement excuse on behavior. |
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Florian Herold, Nick Netzer, Second-best probability weighting, Games and Economic Behavior, Vol. 138, 2023. (Journal Article)
 
Non-linear probability weighting is an integral part of descriptive theories of choice under risk such as prospect theory. But why do these objective errors in information processing exist? Should we try to help individuals overcome their mistake of overweighting small and underweighting large probabilities? In this paper, we argue that probability weighting can be seen as a compensation for preexisting biases in evaluating payoffs. In particular, inverse S-shaped probability weighting is a flipside of S-shaped payoff valuation. Probability distortions may thus have survived as a second-best solution to a fitness maximization problem, and it can be counter-productive to correct them while keeping the value function unchanged. |
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Abdolali Basiri, Felix Kübler, Sajjad Rahmany, Monireh Riahi, Efficient Calculation of all Steady States in large-scale overlapping generations models, Journal of Mathematics and Modeling in Finance, Vol. forthcoming, 2023. (Journal Article)

In this paper, we address the problem of analyzing and computing all steady states of an overlapping generation (OLG) model with production and many generations. The characterization of steady states coincides with a geometrical representation of the algebraic variety of a polynomial ideal, and, in principle, one can apply computational algebraic geometry methods to solve the problem. However, it is infeasible for standard methods to solve problems with a large number of variables and parameters. Instead, we use the specific structure of the economic problem to develop a new algorithm that does not employ the usual steps for the computation of Grobner basis such as the computation of successive S-polynomial and expensive division. |
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Ly-Duyen Tran, Manh-Duy Nguyen, Duc-Tien Dang-Nguyen, Silvan Heller, Florian Spiess, Jakub Lokoc, Ladislav Peska, Thao-Nhu Nguyen, Omar Shahbaz Khan, Aaron Duane, Bjorn Tor Jonsson, Luca Rossetto, An-Zi Yen, Ahmed Alateeq, Naushad Alam, Minh-Triet Tran, Graham Healy, Klaus Schoeffmann, Cathal Gurrin, Comparing Interactive Retrieval Approaches at the Lifelog Search Challenge 2021, IEEE Access, 2023. (Journal Article)
 
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Chandrayee Basu, Rosni Vasu, Michihiro Yasunaga, Qian Yang, Med-easi: Finely annotated dataset and models for controllable simplification of medical texts, arXiv preprint arXiv:2302.09155, 2023. (Journal Article)

Automatic medical text simplification can assist providers
with patient-friendly communication and make medical texts
more accessible, thereby improving health literacy. But curating a quality corpus for this task requires the supervision of medical experts. In this work, we present MedEASi (Medical dataset for Elaborative and Abstractive
Simplification), a uniquely crowdsourced and finely annotated dataset for supervised simplification of short medical
texts. Its expert-layman-AI collaborative annotations facilitate controllability over text simplification by marking four
kinds of textual transformations: elaboration, replacement,
deletion, and insertion. To learn medical text simplification,
we fine-tune T5-large with four different styles of inputoutput combinations, leading to two control-free and two controllable versions of the model. We add two types of controllability into text simplification, by using a multi-angle training approach: position-aware, which uses in-place annotated
inputs and outputs, and position-agnostic, where the model
only knows the contents to be edited, but not their positions.
Our results show that our fine-grained annotations improve
learning compared to the unannotated baseline. Furthermore,
position-aware control generates better simplification than
the position-agnostic one. The data and code are available at
https://github.com/Chandrayee/CTRL-SIMP. |
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Cecilia Hyunjung Mo, Jon M Jachimowicz, Jochen Menges, Adam D Galinsky, The impact of incidental environmental factors on vote choice: Wind speed is related to more prevention-focused voting, Political Behavior, 2023. (Journal Article)
 
How might irrelevant events infiltrate voting decisions? The current research introduces a new mechanism - regulatory focus—by which incidental environmental factors can affect vote choice. Regulatory focus theory proposes that there are two fundamental psychological orientations in how people navigate their worlds: A prevention focus tunes cognition towards security, safety, protection, and risk aversion, whereas a promotion focus orients attention toward achieving growth and positive outcomes. We present a model for how wind speed on Election Day affects voting by shifting the regulatory focus of voters. We propose that increased wind speed shifts voters toward selecting prevention-focused options (e.g., restricting immigration, rejecting Brexit, rejecting Scottish Independence) over promotion-focused options (e.g., promoting immigration, favoring Brexit, favoring Scottish Independence). We further argue that wind speed only affects voting when an election clearly offers a choice between prevention and promotion-focused options. Using a mixed-method approach—archival analyses of the “Brexit” vote, the Scotland independence referendum, and 10 years of Swiss referendums, as well as one field study and one experiment - we find that individuals exposed to higher wind speeds become more prevention-focused and more likely to support prevention-focused electoral options. The findings highlight the political importance of incidental environmental factors. Practically, they speak to the benefit of absentee voting and expanding voting periods beyond traditional election days. |
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Emanuela Benincasa, Gazi Kabas, Steven Ongena, "There is No Planet B", But for Banks There are "Countries B to Z": Domestic Climate Policy and Cross-Border Bank Lending., In: Research Seminar. 2023. (Conference Presentation)

We provide evidence that banks increase cross-border lending in response to higher climate policy stringency in their home countries. Saturating with granular set of fixed effects and including a rich set of control variables, we show that the increase in cross-border lending is not driven by loan demand and/or other bank home country characteristics. In line with banks use cross-border lending as a regulatory arbitrage tool, the increase in cross-border lending occurs only if banks' home countries have more stringent climate policy compared to their borrowers' countries. The effect is stronger for large, lowly capitalized banks with high NPL ratios and for banks with more experience in cross-border lending. Our results suggest that without a global cooperation, cross-border lending can be a channel that reduces the effectiveness of climate policies. |
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Emanuela Benincasa, Gazi Kabas, Steven Ongena, “There is No Planet B", but for Banks “There are Countries B to Z": Domestic Climate Policy and Cross-Border Lending., In: Macro Seminar . 2023. (Conference Presentation)

We provide evidence that banks increase cross-border lending in response to higher climate policy stringency in their home countries. Saturating with granular set of fixed effects and including a rich set of control variables, we show that the increase in cross-border lending is not driven by loan demand and/or other bank home country characteristics. In line with banks use cross-border lending as a regulatory arbitrage tool, the increase in cross-border lending occurs only if banks' home countries have more stringent climate policy compared to their borrowers' countries. The effect is stronger for large, lowly capitalized banks with high NPL ratios and for banks with more experience in cross-border lending. Our results suggest that without a global cooperation, cross-border lending can be a channel that reduces the effectiveness of climate policies. |
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Kelly Widdicks, Federica Lucivero, Gabrielle Samuel, Lucas Somavilla Croxatto, Marcia Tavares Smith, Carolyn Ten Holter, Mike Berners-Lee, Gordon S Blair, Marina Jirotka, Bran Knowles, Steven Sorrell, Miriam Börjesson Rivera, Caroline Cook, Vlad C Coroamă, Timothy J Foxon, Jeffrey Hardy, Lorenz Hilty, Simon Hinterholzer, Birgit Penzenstadler, Systems thinking and efficiency under emissions constraints: Addressing rebound effects in digital innovation and policy, Patterns, Vol. 4 (2), 2023. (Journal Article)
 
Information communication technology (ICT)’s environmental impact must be considered in digital innovation and associated policy to mitigate ICT’s climate change contribution. A pro- posed solution to reduce ICT emissions is by improving efficiency, yet this fails to consider rebound effects where efficiency improvements offset emissions savings or increase emissions. In this perspective, we reveal insights from a transdisciplinary workshop that identified challenges for why rebound effects are difficult to include in innovation and policy. From this, we call researchers to (1) find new ways of presenting rebound effects to digital innovators and policymakers; (2) gather cross-disciplinary evidence of ICT rebound effects; and (3) transparently analyze ICT’s environmental, societal, and economic impacts together. We also call for a systems thinking approach to addressing ICT’s environmental impacts, whereby a solution to rebound ef- fects becomes visible: efficiencies under emission constraints. |
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Mateusz Dolata, Gerhard Schwabe, What is the metaverse and who seeks to define it? Mapping the site of social construction, Journal of Information Technology, 2023. (Journal Article)
 
The Metaverse has become a buzz-phrase among tech businesses. Facebook's rebranding to Meta is symptomatic of this. Many firms and other actors are trying to shape visions of the Metaverse, leading to confusion about the term's meaning. We use social construction of technology (SCOT) theory to disentangle the conflicting notions proposing that what the Metaverse is and will become relies on the collective sensemaking processes. We point out similarities and differences between various concepts presented in the public media and link them to individual actors' monetary, political, or social motives. We describe the tensions that occur because of the conflicting interests. As the Metaverse is an emerging phenomenon, opportunities exist to reorient it toward humanist values rather than singular interests. However, the complexity of the social processes that shape the Metaverse requires a considerate approach rather than premature conclusions about the Metaverse’s characteristics. The analysis presents the Metaverse as a new, continually evolving sociotechnical phenomenon, and calls for research that explores it as a dynamic, moving target. |
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Jakob Weissteiner, Jakob Heiss, Julien Siems, Sven Seuken, Bayesian Optimization-based Combinatorial Assignment, In: 37th AAAI Conference on Artificial Intelligence (AAAI'23), AAAI, 2023-02-07. (Conference or Workshop Paper published in Proceedings)
 
We study the combinatorial assignment domain, which includes combinatorial auctions and course allocation. The main challenge in this domain is that the bundle space grows exponentially in the number of items. To address this, several papers have recently proposed machine learning-based preference elicitation algorithms that aim to elicit only the most important information from agents. However, the main shortcoming of this prior work is that it does not model a mechanism's uncertainty over values for not yet elicited bundles. In this paper, we address this shortcoming by presenting a Bayesian optimization-based combinatorial assignment (BOCA) mechanism. Our key technical contribution is to integrate a method for capturing model uncertainty into an iterative combinatorial auction mechanism. Concretely, we design a new method for estimating an upper uncertainty bound that can be used to define an acquisition function to determine the next query to the agents. This enables the mechanism to properly explore (and not just exploit) the bundle space during its preference elicitation phase. We run computational experiments in several spectrum auction domains to evaluate BOCA's performance. Our results show that BOCA achieves higher allocative efficiency than state-of-the-art approaches. |
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Jeppe Kleijngeld, Stefan Zeisberger, Hier gaat het vaak fout bij de beslissing om een overname te doen..., In: M&A, 7 February 2023. (Media Coverage)

Professor Stefan Zeisberger vertelt over de psychologische valkuilen in het besluitvormingsproces, wat nog steeds een onderbelicht onderwerp is in de wereld van finance en investeren. |
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Jeppe Kleijngeld, Stefan Zeisberger, Dit zijn 3 psychologische valkuilen waar veel beleggers intrappen, In: Business Insider Nederland, 6 February 2023. (Media Coverage)

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Armin Müller, Thorsten Hens, Himmel und Hölle schlagen den Aktienindex, In: Tagesanzeiger, 4 February 2023. (Media Coverage)

Mit Sünden- und Tugendaktien ist man 2022 viel besser gefahren als mit Indexfonds. Jetzt hoffen Banken und Vermögensverwalter auf ein Comeback ihrer Fonds, besonders beim moralischen Investieren. |
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Hannah Zhang, Stefano Ramelli, Alexander Wagner, Do Stocks With High ESG Ratings Hurt Fund Performance?, In: Institutional Investor, 3 February 2023. (Media Coverage)

Managers of diversified equity funds aren’t bullish on the ability of sustainable and socially-conscious companies to generate superior returns, according to new research. |
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Redaktion, Stefano Battiston, Al via «Road to Trento 2023», Italia e Svizzera a confronto, In: L'Adigetto, 2 February 2023. (Media Coverage)

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