Research

Rationality and competition: The economic performance of individuals and firms (2025-2028)

Funding type: DFG collaborative research center
Funding period: 2025-2028

Subproject 1 title: Family policy, gender, and redistribution: Impacts, social preferences, and design
Research team: Rajshri Jayaraman (ESMT Berlin), Emanuel Hansen (Ludwig-Maximilians-Universität Munich), Andreas Peichl (Ludwig-Maximilians-Universität Munich)

This subproject investigates three aspects of socio-economic inequality. First, it examines the evolution of economic inequality; the public’s perception of it; and the role of social norms and culture in shaping inequality. Second, it studies the effects of family policies and the tax-transfer system on individual behavior and inequality. Third, it investigates the design of policy reforms that can improve social welfare and economic efficiency.

Subproject 2 title: Assortative matching and the allocation of talent
Research team: Jan Nimczik (ESMT Berlin), Fabian Waldinger (Ludwig-Maximilians-Universität Munich)

This subproject aims to gain a nuanced understanding of talent allocation in labor markets. The pairing of workers with firms—and even with specific roles within an organization—tends to follow a pattern known as positive assortative matching. In simple terms, high-earning workers often land jobs at companies that offer the highest wages. This phenomenon plays a significant role in shaping wage inequality. The project examines how this matching process emerges and the ways in which institutions influence it.

Subproject 3 title: Assortative matching and the allocation of talent
Research team: David Ronayne (ESMT Berlin), Radosveta Ivanova-Stenzel (Technische Universität Berlin)

This subproject investigates systematic effects on market outcomes caused by limited information and biases. By understanding the transmission mechanisms of biased behavior into market outcomes, the project aims to provide informed and targeted recommendations for regulation and policy with a focus on topics relevant to modern marketplaces, including human-AI interaction, consumer search behavior, targeted advertising, and privacy protocols. 

Labour market transformation: Scarcity, mismatch, and policy 

Funding type: DFG research unit
Funding period: 2025-2028
Spokesperson: Peter Haan (Freie Universität Berlin)

Subproject 1 title: Labour scarcity and the role of firms in the labour market 
Research team: Jan Nimczik (ESMT Berlin), Alexandra Spitz-Oener (Humboldt-Universität Berlin)

Subproject 2 title: Labour market regulations 
Research team: Jan Nimczik (ESMT Berlin), Christian Traxler (Hertie School of Governance)

As a result of global change processes such as digitisation, globalisation and climate change, economies worldwide are facing the challenge of changing structures in the area of labour needs. There is an increasing demand for qualifications that only a few workers and specialists currently possess. For this reason, the Research Unit Labour market transformation: Scarcity, Mismatch, and Policy examines the above-mentioned transformation processes that are causing this shift in the demand for certain skills within the labour force. It also looks at how policy can counter the mismatch between required and existing qualifications so as to reduce the shortage of skilled workers and specialists. In doing so, it focuses particularly on the areas of family and gender policy, immigration, education and pension policy, based on an international comparison. 

Digital platforms: Pricing, variety and quality provision

Funding type: European Research Council (ERC) Starting Grant
Funding period:  2020-2025, the new beneficiary is the European University Institute (EUI) as of September 2023
Research team: Özlem Bedre-Defolie (ESMT Berlin), Willy Lefez (ESMT Berlin), Atara Oliver (former ESMT Berlin)

Digital platforms, such as Amazon, Alibaba, Google, have become important global players. Their practices have led to significant anti-trust and regulatory scrutiny, and interventions. The existing theoretical models are not suited for the analysis of most of digital platforms as they fail to capture their important aspects and dynamics. This project’s first goal is to develop tractable and applicable models of markets with digital platforms capturing their unique features. The second goal is to investigate the implications of digital platforms’ business practices on prices, variety and quality provision to buyers, on small rivals, and on potential platform entry. The findings of this project will highlight potential distortions in these multi-billion markets and ultimately suggest effective policy recommendations for competition policy in digital markets, which can greatly improve consumer welfare in the EU.

More detailed information can be found on the official project website.

Evaluation of a digital skills program for TVET teachers in Rwanda

Funding type: Research grant supported by the German Institute for Development Evaluation (DEval) with funds from the German Federal Ministry for Economic Cooperation and Development (BMZ). 
Funding period: 2023-2025
Research team: Rajshri Jayaraman (ESMT Berlin), Sneha Menon (ESMT Berlin), Matthias Schündel (Goethe University Frankfurt)

Working together with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the government of Rwanda, a nation-wide digital skills training program for technical and vocational education and training (TVET) teachers in Rwanda will be evaluated.

The research project will evaluate the impact of the digital skills training program on teachers’ digital and pedagogical competence, their teaching practice, and students’ test scores. In addition, the researchers will evaluate the effectiveness of various randomly assigned behavioral incentives to motivate teachers to complete the program. Results from this project will flow into future program designs in Rwanda as well as scaling and replication in other regions of the world.