Third-party funding

“Energie Campus Nürnberg”, partial project “Energy Market Design (EMD)” (2017 – 2021)

Funded by the Bavarian State Government

economyIn the project “Energy Markt Design” within EnCN2 a team of researchers from economics, mathematics, and law analyses the economic and regulatory environment for the transformation of the energy system. The main objectives are to enhance the methods in energy market modeling and to contribute with well-grounded analyses to the policy discourse in Germany and Europe. For the electricity market, the focus is on the steering effect of market designs on regulated transmission expansion and private investments, as well as on the identification of frameworks at the distribution level that provide regional stakeholders with business models for the provision of flexibility measures. In order to address these complex issues, mathematical techniques are developed within the project that allow for solving the respective models. Another key research topic results from the advancing sector coupling in energy markets. Within EMD, gas market models, that are developed within DFG Transregio 154 (Simulation and Optimization of Gas Networks) in cooperation with project partners, are applied to evaluate the European gas market design. The long-term objective of the research group is an integrated assessment of the electricity and gas market design and their combined effects on investment decisions. More Information/Video




“Elite Master Program: Advanced Signal Processing & Communications Engineering” with 12 FAU professors (2016 – 2020)

Funded by the Elite Network of Bavaria

Communication networks of the future will have a modular, decentralized structure in order to enhance efficiency and flexibility of applications. In order to develop suitable algorithms, game theory is of crucial importance. The course „Game Theory with Applications to Information Engineering“ which is offered within the framework of the elite master program „Advanced Signal Processing and Communications Engineering“ is an introduction to the fundamentals of game theory and mechanism design and their applications to information engineering. The first part of the lecture will be an introduction to non-cooperative game theory with complete and incomplete information as well as central solution concepts. Motivations are drawn from topics in information engineering and networked systems (e.g. incentive-compatible/dynamic resource allocation in networks, distributed control of wireline and wireless communication networks, multi-agent systems, pricing and investment decisions in the Internet). In a second part, fundamentals of auction theory as well as Mechanism Design will be covered and put into context with information engineering. Also social and economic contexts will be covered in order to put the engineering applications into a broader perspective.

“Welfare optimal nominations in gas networks and associated equilibria” with Martin Schmidt and Gregor Zöttl (2016 – 2018)

Funded by the German Science Foundation (DFG) as a partial project of SFB Transregio 154



“Welfare optimal nominations in gas networks and associated equilibria” with Martin Schmidt and Gregor Zöttl (2016 – 2018)

Funded by the German Science Foundation (DFG) as part of the project “SFB Transregio 154”

The goal of this project is the analysis of the relation between (i) the equilibria of simple models of competitive natural gas markets, using complementarity problems for modeling the behavior of different players, and (ii) the solution of corresponding single-level welfare maximization problems. The understanding of this fundamental relation is a prerequisite for an analysis of the current entry-exit gas market design in Europe. Similar questions have been studied in detail in the context of electricity market modeling in the past. For natural gas markets, however, the addressed questions are much more complex and not yet well understood for adequate models of gas physics. The reasons for the high level of complexity is twofold: First, gas flow through pipeline systems is inherently nonconvex due to gas physics. This renders classical first-order optimality conditions possibly insufficient. Second, the operation of gas transport networks comprises the control of active network devices like (control) valves or compressors. These devices introduce binary aspects and thus a further type of non-convexity to the models of the underlying equilibrium problems. As a result of the project we will obtain a first reference model that combines gas physics and a market analysis in a well-understood way. This will lay the ground for multilevel models of entry-exit natural gas markets that account for network characteristics. Beyond that, our results will enhance the understanding of binary equilibrium problems. More information




“Dezentralität und zellulare Optimierung – Auswirkungen auf den Netzausbaubedarf” with Gregor Zöttl and Prognos AG (2016)

Funded by the N-Ergie Aktiengesellschaft

Facing the current debate about the energy transition, in this project we investigate flexible demand options as well as changed market designs and conditions as an alternative to network expansion. Further, the optimal technology mix as well as locational choice of renewable energy generation will be determined endogenously. This project will be the basis to enhance the process of network expansion systematically and to include approaches and flexibility options which have been neglected so far. More information




“Experimental Validation of Indicators of Manager Behavior in Business Surveys” (2015-2018)

Funded by the Federal Employment Agency

ManagerThe aim of the project is to analyze connections between manager behavior and firm level variables. The first step is the identification of suitable behavioral indicators in questionnaires that will be validated in controlled laboratory experiments. The experiments are meant to examine and evaluate fundamental relationships between different indicators and economically relevant decision making. The project points towards providing the basic elements to collect the identified behavioral indicators by means of short questions or simply decisions within questionnaires. The project is conducted in close cooperation between the Chair of Economic Theory by Prof. Dr. Grimm and the Institute for Employment Research (IAB) in especially with Prof. Dr. Bellmann and Dr. Mario Bossler.




“Flexible Verbraucher im Deutschen Strommarkt” (2015)

Funded by the ThyssenKrupp Aktiengesellschaft

In this research project, we analyze investment incentives for flexible manufacturing facilities within the energy market system. We propose a multi-stage equilibrium model which incorporates generation capacity investment, network expansion and redispatch, and include enhancements regarding a flexible production approach. The model allows to investigate incentives for flexible production as well as locational choices and the impact of flexible energy demand on the energy market as a whole. In particular, we explore the profitability of flexible production units for different shares of flexible energy consumers in the electricity market. Furthermore, we examine from which point on flexible production units will have a considerable influence on energy price development and the extent to which price fluctuations will be mitigated by flexible consumption.




“Sustainable Business Models in Energy Markets: Perspectives for the Implementation of Smart Energy Systems” with 7 FAU professors (2014 – 2015)

Funded by the FAU Emerging Fields Initiative

The liberalization of electricity markets and the increasing advancement of renewable energy sources pose important new challenges and requirements for our energy system with regard to grid expansion, energy production, transmission, distribution, and innovative storage systems. A successful transformation into a smart energy system thereby crucially depends on adequate investment incentives and the attractiveness of the business models of involved stakeholders. The purpose of the research project “Sustainable Business Models in Energy Markets: Perspectives for the Implementation of Smart Energy Systems” is to provide a comprehensive analysis of the energy system, including the specific economic incentives and business models of all relevant stakeholders, the institutional environment and the technological perspectives. The aim of the project is to develop new and urgently needed insight into the interaction between business models and regulation while taking into account the technological framework, and to allow a more informed discussion and advice regarding political and regulatory frameworks to ensure a successful transition towards a smart energy system. More information




“Evaluation eines Smart Grid-Feldexperiments” (2014-2015)

Funded by the N-Ergie Aktiengesellschaft, Nürnberg

Within the cooperative project SWARM between the N-ERGIE AG and the Energy Campus Nuremberg (EnCN), the chair of economic theory deals with investment incentives in innovative energy storage systems of private households and the influence of these storages on the supply grid. Further, we investigate the economic advantages they provide to supply system operators or households. The overall goal of the research activities within the SWARM project is to gain knowledge about connected distributed energy storages (swarm storage) running as one virtual electricity storage.More information




“International Graduate School: Evidence Based Economics” with Davide Cantoni, Martin Kocher, Klaus Schmidt, Joachim Winter, Florian Englmaier, Uwe Sunde and Andreas Roider (2013 – 2017)

Funded by the Elite Network of Bavaria

The aim of the graduate program “Evidence Based Economics” (EBE) is to provide doctoral students with the diverse methodological skills required to perform innovative, state-of-the art economics research within the EBE research agenda, and to apply these skills to important real-world problems. The ultimate goal is to train doctoral students so that they can work at the frontier of theory-guided, evidence-based economics.More information




“Energie Campus Nürnberg”, partial project “ECONOMY” (2012 – 2017)

Funded by the Bavarian government

economyThe general framework of energy trade, the decisions concerning regulatory interventions and the deployment of climate-policy instruments demonstrably affect energy prices, investment incentives and the success of innovations. This project is aimed at exploring the impact of market designs and regulation on the said decisive economic factors. The project group mainly focuses on the effects of political decisions regarding the economy and climate on the composition of power plant parks and the long-term opportunities and risks different technologies have to offer. One of the central points is the percentage of renewable energy that can be attained from power generation in the long term. The work methods applied by the project group are a combination of theoretical, empirical and experimental approaches. More information




“Solarfabrik der Zukunft: Smart Grid Solar”, partial project “Implementierung im Marktumfeld” (2012 – 2016)

Funded by the Bavarian government and the EU (efre)

Since the Energy Market Liberalization, all the various decisions regarding the optimal energy supply in Germany are no longer made by fully integrated power supply companies. Instead, decisions are made by different market participants in a decentralized way. Beyond the economical optimization of the interaction between grid, suppliers, storages and consumers, a key question is, to what extent the current market design coupled with policy control mechanisms (e.g. the EEG regulations) actually reaches the implementation of the optimal system via the various decisions of all market participants.
The core of the economic analysis evaluates the implementation of a smart grid system considering all relevant market participants within different political frameworks in a quantitative way. Comparing the optimal solutions derived by the work package optimization and simulation enables an identification of the necessary changes in the market design and the legal framework. More information




“Experimental studies on the impact of collective bargaining on the gender wage gap” with Gesine Stephan (2012 – 2015)

Funded by the Federal Ministry of Family Affairs, Senior Citizens, Women and Youth

gender-pay-gapCompared to men the earnings of women in Europe are still significantly lower than of men. With identical qualifications and occupations female workers in Germany earn on average 8% less than their male counterparts (adjusted wage gap). The difference in the middle income is about 23% (unadjusted wage gap), if qualifications and occupations are not regarded. This huge difference is mainly due to the fact that women are much more often employed in jobs at the lower end of the wage distribution and that they have longer and more frequent family related employment interruptions than men. Until now no lasting improvements could be achieved in collective bargaining for occupations, which are often done by women. According to the German Minister for Family Affairs Kristina Schröder “we need a debate about what role a fair chance and fair pay for women actually play in collective bargaining. Who wants to decrease the income gap between men and women, has to look to the causes of discrimination against women in the working world” (Press release from 03-22-2012). To this debate, this project attempts to contribute. By means of economic experiments we try to get insights into the effects that collective bargaining has on the wage gap, and how an increase of transparency could affect the extent of such effects. Collective bargaining relates to any situation in which representatives of a group deal on wages for this group; collective bargaining between unions and employers associations is the most important variant. More Information




“Trust in Character, Capability and Institutions” (2012-2014)

Funded by the GfK Association

EuroflagIn this project we conducted an experimental study among European citizens regarding cross-cultural perceptions related to trust in two dimensions: volunteerism and honesty. We used representative samples from five major economies of the Euro area: France, Germany, Italy, the Netherlands, and Spain. We find that European citizens rely on nationality to infer behavior. Assessments of behavior show a north/south pattern: participants from northern countries are perceived to be more honest and to provide more effort in a volunteering game than participants from southern countries. Actual behavior is, however, not always in line with these assessments. Assessments of honesty show strong evidence of social projection: Participants expect other European citizens to be less honest if they are culturally closer to themselves. Assessments of volunteerism instead show that both northern and southern Europeans expect higher performance in northern than in southern European countries.

Part of the research has been published in the European Economic Review.




“Taxation, Social Norms, and Compliance: Lessons for Institution Design” with 10 FAU professors (2012 – 2013)

Funded by the FAU Emerging Fields Initiative

taxation-social-norms-complianceThe goal of the project ‘Taxation, Social Norms, and Compliance: Lessons for Institution Design’ is to foster research on individual and social determinants of tax compliance. In particular, the project aims to investigate the role institutions and social and cultural norms play for tax compliance. With regard to formal institutions, the project considers the design of tax systems as well the role of tax administration and of tax accounting. Special attention is paid to social and cultural norms, an aspect which is crucial given the great impact these have on fairness and on the individual’s perception of other taxpayers’ behaviour. Finally, the project also includes several sub-projects that focus on behavioural economics, exploring the preferences and the decision behaviour of individual taxpayers. More information




“Bio Objects Bio Subjects: Exploring the Interface of Science, Technology and Society” with 6 FAU professors (2012 – 2013)

Funded by the FAU Emerging Fields Initiative

Innovations in biotechnology and the life sciences do not only yield great progress in various areas of scientific and technological research and thus also drive economic development, but they also dynamically chart the fundamental relationship between nature, technology, and society. In the future bio-objects will take a key position in dynamic, knowledge-based societies and economies that far exceeds their current importance. They subvert established categories, thereby leaving the realm of the purely material and gaining a certain autonomy and independence from the contexts of their origin and use. This project aims to identify bio-objects as a driving factor for biotechnological developments, to chart their multidimensionality and to examine their effects on agents and society.




“Die Entstehung von Reputation in Wirtschaftsbeziehungen” with Prof. Martin Abraham of the FAU (2010 – 2012)

Funded by the German Science Foundation (DFG)

dfgThe project focuses on the question how reputation evolves in economic transactions. Oftentimes, business partners cannot rely on their own experience with their counterpart. Thus, the reputation of business partners plays a crucial role in many markets. While the effect of reputation has been the focus of many studies within this field of research, the present investigates the formation of reputation both theoretically and empirically. We are particularly interested in reputation that evolves in the direct interaction between business partners while institution-based reputation mechanisms (e.g. formal rankings on online platforms or media coverage) are deliberately excluded. On the basis of game theory and laboratory experiment we investigate the conditions that foster the formation of reputation and the circumstances that rather prevent their evolvement. In a second step, the results from the laboratory experiments will be validated with field data..