Christoph Wolf

Welcome! I am an Assistant Professor in the Department of Economics at Bocconi University. Before joining Bocconi, I completed my PhD at the University of Mannheim. Please find my CV here.

My research interests lie primarily in the field of Applied Microeconomic Theory. In particular, I am interested in dynamic incentive problems and the effects of learning in dynamic environments.

I am also interested in Empirical Industrial Organization; so far, I have been working on the estimation of auction models and the analysis of merger policy.


Working papers

(with Johannes Schneider)

Abstract: Which discoveries improve decision making? Which question does a researcher pursue? How likely will a researcher discover an answer? We propose a model in which the answers to research questions are correlated. Revealing an answer endogenously improves conjectures on unanswered questions. A decision maker uses conjectures to address problems. We derive the benefits of a discovery on decision making. A researcher maximizes the benefits of discovery net the cost of research. We characterize the researcher's optimal choice of research question and research effort. Benefits and cost of research crucially depend on the structure of pre-existing knowledge. We find that discoveries are rare but advance knowledge beyond the frontier if existing knowledge is dense. Otherwise, discoveries are more likely and improve conjectures inside the frontier.

(with Satoshi Fukuda and Nenad Kos)

Abstract: We study equilibrium distancing during epidemics. Distancing reduces the individual’s probability of getting infected but comes at a cost. It creates a single peaked epidemic, flattens the curve and decreases the size of the epidemic. We examine more closely the effects of distancing on the outset, the peak and the final size of the epidemic. First, we define a behavioral basic reproduction number and show that it is concave in the transmission rate. The infection, therefore, spreads only if the transmission rate is in the intermediate region. Second, the peak of the epidemic is non-monotonic in the transmission rate. A reduction in the transmission rate can lead to an increase of the peak. On the other hand, a decrease in the cost of distancing always flattens the curve. Third, both an increase in the infection rate as well as an increase in the cost of distancing increase the size of the epidemic. Our results have important implications on the modeling of interventions. Imposing restrictions on the infection rate has qualitatively different effects on the trajectory of the epidemics than imposing assumptions on the cost of distancing. The interventions that affect interactions rather than the transmission rate should, therefore, be modeled as changes in the cost of distancing.

(with Johannes Schneider)

Abstract: We study the tradeoff between fundamental risk and time. A time-constrained agent has to solve a problem. The agent dynamically allocates effort to implementing a known yet risky method or developing a new, less risky method. The time remaining to implement a new method determines the value of the agent's discovery. Under the optimal policy, the agent may switch from implementing the old to developing a new and back to implementing the old method. Successful development of new methods is most likely if the time horizon is intermediate. The results differ qualitatively if new approaches are developed through lean techniques.

(R&R @ Management Science)

EC'20 Exemplary Applied Modeling Track Paper (extended abstract)

(with Andre Stenzel and Peter Schmidt)

Abstract: We consider dynamic price-setting in the presence of rating systems and asymmetric information about product quality. A long-lived monopolist sells a product of privately known and fixed quality to a sequence of short-lived consumers. In each period, the price charged determines the taste characteristics of purchasing consumers who leave reviews after purchase. Individual reviews are aggregated into ratings observable to future consumers. The price has two effects on future ratings: (i) a direct price effect on reviews, and (ii) an indirect selection effect by determining the tastes of reviewing consumers. Inference is conducted by looking for the inferred quality and cutoff taste such that purchase decisions are individually rational and the current aggregate rating is matched. We show that rating systems are effective as consumers correctly infer the quality of the product in the long run. However, the design of the rating system affects long-run prices, profits and consumer surplus. If the direct price effect dominates the selection effect, consumers benefit from a rating system which is more sensitive to newly arriving reviews. In contrast, they prefer a more persistent system if the selection effect dominates. Firms are unambiguously better off the more sensitive the rating system.
Supplementary Mathematica file: Mathematica_PftS

Abstract: I study a continuous-time moral hazard problem with learning about a two-stage project of unknown quality. The first-stage arrival time is informative but not conclusive about the project’s quality. Due to the informativeness, the optimal contract features a combination of continuation value and intermediate bonus payments as a reward. There is a negative correlation between the first success time and the share of bonus payments in the reward. Second-stage deadlines adjust to the first-stage success time: early successes are rewarded with longer deadlines in the second stage. When agent replacement between stages is possible, the principal will replace the agent if the first success arrives late.

(with Stefan Weiergraeber)

Abstract: We develop a structural empirical model of procurement auctions with private and common value components and bidder asymmetries in both dimensions. While each asymmetry can explain the dominance of a firm, they have opposite welfare implications. We propose a novel empirical strategy to quantify the two asymmetries using detailed contract-level data on the German market for railway passenger services. Our results indicate that the incumbent is slightly more cost-efficient and has substantially more information about future ticket revenues than its competitors. If bidders’ common value asymmetry was eliminated, the median probability of selecting the efficient firm would increase by 61%-points.

(with Matthias Hunold)

Abstract: We study competitive awarding procedures of short haul railway passenger services in Germany from 1995 to 2011 by means of a newly collected data set. In particular, we use regression techniques to investigate the determinants of the number of bidders, the identity of the winning bidder and the subsidy level. We find that there are more bidders when the contract duration is high and the revenue risk low. The dominant operator is more likely to win contracts if it is the incumbent, the network is large, the contract duration is high, when used rolling stock is admitted and when there are few other bidders.

Work in progress

Riding the Cycle

(with David Lindequist)

Prices and Rating Systems

(with Anton Sobolev, Konrad Stahl and Andre Stenzel)

Value for Money and Selection: How Pricing Affects Airbnb Ratings

(with Kevin Tran, Maximilian Schaefer, and Andre Stenzel)


Università Bocconi

Department of Economics

Via Roentgen 1

20136 Milano, Italy

+39 02 5836 5277