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A firm''s prosperity often hinges on its ability to successfully introduce new products into market. The projection of an innovation''s potential market diffusion therefore is not only of academic interest, but also of substantial interest for practitioners. Limitations of traditional approaches can be overcome by means of an agent-based simulation approach that conceives the complex diffusion process of an innovation on the macro-level as a result of relatively simple micro-level interactions between heterogeneous individuals (who, for example, exchange their first-hand experiences within their social network through word-of-mouth). In this talk we will present results from a research project in which such an agent-based simulation has been developed. Its applicability is illustrated for the case of a second generation biofuel for the Austrian market. The corresponding de-commoditization of a convenience product requires not only to find proper strategies for advertising, pricing, and roll-out of the new product in the presence of well-known alternatives (i.e., regular fuel) but also to establish awareness for additional product attributes (e.g., concerning the fuel''s raw material).

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We often find it difficult to act in accordance with our long-term interests when making decisions about the future. Present-bias, i.e., our tendency to myopically maximize short-term rewards at the expense of more desirable long-term outcomes, is modulated by many factors, including stress. Stress has been hypothesized to have bi-directional effects on decision making: stress promotes simple, habitual behavior immediately after stress but more far-sighted, flexible and goal-directed behavior in the aftermath of stress. The particular time course of the endocrine stress response should thus affect present-bias in a bi-directional way. In addition, humans are aware of their tendency to make short-sighted decisions and have found ways to exercise self-control. One way resist temptation is to use willpower. However, willpower is weak and subject to depletion. Thus, a potentially more efficient way to prevent oneself from making irrational, myopic decisions is to remove access to the tempting, but eventually undesirable alternative – a process called precommitment. In my talk, I will discuss and provide mixed evidence for the hypothesis of time-dependent effects of stress on present-bias. I will then present behavioural and neural evidence that willpower and precommitment are distinct mental self-control processes that draw on dissociable neural mechanisms.

Analyzing the newsvendor context in laboratory experiments gives new insights into the behavioral aspects of decision makers. However, a valid question is whether the results of experimental studies can be transferred to real world decisions. We test this by analyzing the decisions of real decision makers. We derive normative benchmarks for the profit maximizing behavior and compare these to actual data. Our findings indicate that real decision makers show similar decision biases as students in laboratory environments.

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In this laboratory experiment we explore the process and the underlying concepts of bargaining within a framework of uncertainty. This is done by means of an experiment with unstructured negotiations where subjects, facing a series of bargaining problems, are allowed to use free form communication. We use the behaviour of the subjects to test for different solution concepts of cooperative game theory. As these concepts resemble the fairness norms (implicitly) applied by the negotiating parties, free communication allows us to get more insights into these fairness perceptions. In particular, the integration of uncertainty into the bargaining framework, enables us to specifically test for the Perles-Maschler solution (against the benchmark of the Nash solution).

We develop a model in which competitive pressure is a catalyst for organizational change. In our model, commitment to a narrow business strategy is valuable because workers need to coordinate their efforts to build a strategy-specific capability. We show that a monopolist may not be able to commit to a focused business strategy. However, introducing competition can make commitment credible, thus leading to organizational change and greater operating efficiency. Our model sheds light on a number of questions in the intersection between the strategic management literature and the organizational economics literature, including the importance of leadership styles, the interactions between strategic positioning and organizational capabilities and the existence of X-inefficiencies.

A substantial body of research has argued that relational contracts can sustain cooperation in the absence of formally binding agreements. We use experimental evidence to investigate whether relational contracts in a repeated principal-agent relationship can still function when the agent has private information about his costs of exerting effort, so that the principal does not know whether low efforts result from uncooperative behavior or high effort costs. At the beginning of the interaction, agents have to send a signal about their costs, which may or may not be truthful. About two thirds of the low-cost agents lie about their type. A substantial amount of cooperation remains with incomplete information, but those low cost agents who lie exert much lower efforts than those in the complete information treatment. As a result, the possibility of lying reduces efficiency by 12% among the low-cost types.