Florian Baumann
Biographic Data
| ID | 6037332 |
|---|---|
| NAME | Florian Baumann |
| GIVEN NAMES | Florian |
| FAMILY NAME | Baumann |
| SIGNATURE | BAUMANN F |
| AFFILIATIONS | University of Tübingen |
| VERIFIED | No |
| TOTAL WORKS | 15 |
| TOTAL CITATIONS | 3 |
| AUTHOR COUNT | 15 |
| EDITOR COUNT | 0 |
| FIRST PUBLICATION YEAR | 2008 |
| LATEST PUBLICATION YEAR | 2024 |
| H-INDEX | 1 |
Second Opinions and Diagnostic Uncertainty in Expert Markets
Second opinions are often proposed as a disciplining device to mitigate fraudulent behavior by experts. However, inappropriate treatment recommendations may stem from diagnostic uncertainty or inaccuracy. We analyze expert and customer behavior in a situation in which diagnostic outcomes can be incorrect, and in which customers can decide to seek a second opinion. We find that if diagnostic uncertainty pertains to the identification of the minor …
Fines versus Damages
This paper studies the differential effects of fines and damages on people’s investment in accident prevention. We report results from a series of experiments in which the level of monetary transfers after an accident is maintained across the two policy instruments such that standard theory predicts the behavioral irrelevance of the choice of instrument. However, we find that fines induce lower investments in care than damages when revenue from f…
Product Liability and Reasonable Product Use
A monopolist offers different variants of a possibly dangerous product to heterogeneous customers who choose among product variants that are distinguished by different safety levels. Customers’ choice of product use codetermines expected harm. We find that even when customers are perfectly informed about product variants’ safety, product liability can increase welfare by limiting the firm’s incentives to distort product safety in pursuance of pro…
When more isn’t always better
Fines as enforcers’ rewards or as a transfer to society at large? Evidence on deterrence and enforcement implications
We analyze experimental data to assess whether the deterrent effect of expected fines depends on who receives the fines’ proceeds. We compare behavior in treatments when the revenue is a reward for enforcement agents to the alternative when fines are transferred to society at large. Most important, with a fixed detection probability, potential offenders’ material incentives are held constant across treatments. Our evidence suggests that the deter…
Market collusion with joint harm and liability sharing
Allocation of Liability
»Vielmehr bietet [der Kommentar] auf höchstem Niveau eine substantielle Auseinandersetzung mit den Hintergründen, den Zusammenhängen, der Theorie und der Praxis des Grundgesetzes. Besseres lässt sich von einem Verfassungskommentar nicht sagen.“ Herbert Günther Staaatsanzeiger für das Land Hessen 2018 (50), 1494–1495
Optimal Damages Multipliers in Oligopolistic Markets
This paper establishes that tort damages multipliers greater than one can be an instrument to induce imperfectly competitive producers to invest in product safety at socially optimal levels. In their selection of product safety levels, producers seek to maximize profits, neglecting the fact that higher investment in product safety increases consumer welfare; the discrepancy between private and social safety incentives can be remedied by setting d…
Status and Liability
We analyze liability law when the value of the good at risk has an influence on the consumer's social status. It is first established that standard liability rules fail to induce efficient choices. We argue that standard negligence will tend to outperform standard strict liability. Next, we suggest welfare-improving adjustments to strict liability and negligence. An optimally adjusted strict liability rule will require that damages decrease in th…
Innovation, Tort Law, and Competition
We examine the link between innovative activity on the part of firms, the competitive pressure to introduce innovations, and optimal damages awards. While innovative activity brings forth valuable new products for consumers, competitive pressure in the ensuing innovation race induces firms to launch innovations too early, thereby raising the likelihood of severe product risks above the optimal failure rate. Introducing innovations too early may c…
Contingent fees meet the British rule
Tax Evasion, Investment, and Firm Activity
This paper establishes within an intertemporal framework that firm activity is influenced by tax evasion if firms can invest in their long-term competitiveness. Higher investment raises the firm's survival probability, which in turn reduces tax-evasion payoffs, since evaded taxes may also be detected and penalized later on. At the same time, tax evasion in future periods increases future expected profits, making higher investment desirable. Conse…
Severance Payments as a Commitment Device
The present paper analyzes the role of severance payments in optimal labor contracts, employing an efficiency-wage model with two-sided moral hazard. We show how employers commit to job security for their workers by using severance payments, but that in general, employees are not fully compensated for the loss in income in the event of a layoff. By extending the analysis we establish a positive relation between investment in firm-specific trainin…
On the Economics of Contribution Evasion
This paper considers the tax evasion decision when taxes constitute contributions to the financing of social insurance programs, such as unemployment insurance. We call this evasion contribution evasion and establish that critical differences exist between contribution evasion and tax evasion, the central difference being that contributions entitle the contributor to future claims. Furthermore, we derive a recommendation for the reduction of cont…
Union Power as a Reason for Europe Not to Introduce Experience Rating?
Theoretical economic literature dealing with the financing of unemployment insurance finds that experience rating helps to solve the externality caused by individually efficient but socially inefficient dismissals and hence reduces unemployment. This is, however, found in models where workers and firms bargain over wages individually. Introducing unionized wage bargaining - which at least in continental Europe is a defining feature of the economy…
Fines as enforcers’ rewards or as a transfer to society at large? Evidence on deterrence and enforcement implications
We analyze experimental data to assess whether the deterrent effect of expected fines depends on who receives the fines’ proceeds. We compare behavior in treatments when the revenue is a reward for enforcement agents to the alternative when fines are transferred to society at large. Most important, with a fixed detection probability, potential offenders’ material incentives are held constant across treatments. Our evidence suggests that the deter…
Union Power as a Reason for Europe Not to Introduce Experience Rating?
Theoretical economic literature dealing with the financing of unemployment insurance finds that experience rating helps to solve the externality caused by individually efficient but socially inefficient dismissals and hence reduces unemployment. This is, however, found in models where workers and firms bargain over wages individually. Introducing unionized wage bargaining - which at least in continental Europe is a defining feature of the economy…
On the Economics of Contribution Evasion
This paper considers the tax evasion decision when taxes constitute contributions to the financing of social insurance programs, such as unemployment insurance. We call this evasion contribution evasion and establish that critical differences exist between contribution evasion and tax evasion, the central difference being that contributions entitle the contributor to future claims. Furthermore, we derive a recommendation for the reduction of cont…
Tax Evasion, Investment, and Firm Activity
This paper establishes within an intertemporal framework that firm activity is influenced by tax evasion if firms can invest in their long-term competitiveness. Higher investment raises the firm's survival probability, which in turn reduces tax-evasion payoffs, since evaded taxes may also be detected and penalized later on. At the same time, tax evasion in future periods increases future expected profits, making higher investment desirable. Conse…
Severance Payments as a Commitment Device
The present paper analyzes the role of severance payments in optimal labor contracts, employing an efficiency-wage model with two-sided moral hazard. We show how employers commit to job security for their workers by using severance payments, but that in general, employees are not fully compensated for the loss in income in the event of a layoff. By extending the analysis we establish a positive relation between investment in firm-specific trainin…
Contingent fees meet the British rule
Innovation, Tort Law, and Competition
We examine the link between innovative activity on the part of firms, the competitive pressure to introduce innovations, and optimal damages awards. While innovative activity brings forth valuable new products for consumers, competitive pressure in the ensuing innovation race induces firms to launch innovations too early, thereby raising the likelihood of severe product risks above the optimal failure rate. Introducing innovations too early may c…
Optimal Damages Multipliers in Oligopolistic Markets
This paper establishes that tort damages multipliers greater than one can be an instrument to induce imperfectly competitive producers to invest in product safety at socially optimal levels. In their selection of product safety levels, producers seek to maximize profits, neglecting the fact that higher investment in product safety increases consumer welfare; the discrepancy between private and social safety incentives can be remedied by setting d…
Status and Liability
We analyze liability law when the value of the good at risk has an influence on the consumer's social status. It is first established that standard liability rules fail to induce efficient choices. We argue that standard negligence will tend to outperform standard strict liability. Next, we suggest welfare-improving adjustments to strict liability and negligence. An optimally adjusted strict liability rule will require that damages decrease in th…
Allocation of Liability
»Vielmehr bietet [der Kommentar] auf höchstem Niveau eine substantielle Auseinandersetzung mit den Hintergründen, den Zusammenhängen, der Theorie und der Praxis des Grundgesetzes. Besseres lässt sich von einem Verfassungskommentar nicht sagen.“ Herbert Günther Staaatsanzeiger für das Land Hessen 2018 (50), 1494–1495
Market collusion with joint harm and liability sharing
When more isn’t always better
Fines as enforcers’ rewards or as a transfer to society at large? Evidence on deterrence and enforcement implications
We analyze experimental data to assess whether the deterrent effect of expected fines depends on who receives the fines’ proceeds. We compare behavior in treatments when the revenue is a reward for enforcement agents to the alternative when fines are transferred to society at large. Most important, with a fixed detection probability, potential offenders’ material incentives are held constant across treatments. Our evidence suggests that the deter…
Second Opinions and Diagnostic Uncertainty in Expert Markets
Second opinions are often proposed as a disciplining device to mitigate fraudulent behavior by experts. However, inappropriate treatment recommendations may stem from diagnostic uncertainty or inaccuracy. We analyze expert and customer behavior in a situation in which diagnostic outcomes can be incorrect, and in which customers can decide to seek a second opinion. We find that if diagnostic uncertainty pertains to the identification of the minor …
Fines versus Damages
This paper studies the differential effects of fines and damages on people’s investment in accident prevention. We report results from a series of experiments in which the level of monetary transfers after an accident is maintained across the two policy instruments such that standard theory predicts the behavioral irrelevance of the choice of instrument. However, we find that fines induce lower investments in care than damages when revenue from f…
Product Liability and Reasonable Product Use
A monopolist offers different variants of a possibly dangerous product to heterogeneous customers who choose among product variants that are distinguished by different safety levels. Customers’ choice of product use codetermines expected harm. We find that even when customers are perfectly informed about product variants’ safety, product liability can increase welfare by limiting the firm’s incentives to distort product safety in pursuance of pro…
Economics (15 works) · Business (10 works) · Law, Economics, and Judicial Systems (9 works) · Law (8 works) · Law and economics (8 works) · Political science (8 works) · Microeconomics (7 works) · Finance (5 works) · Liability (5 works) · Actuarial science (4 works)