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</o:shapelayout></xml><![endif]--></head><body lang=DE link=blue vlink=purple><div class=WordSection1><p class=MsoPlainText><span lang=EN-US>Dear All,<o:p></o:p></span></p><p class=MsoPlainText><span lang=EN-US><o:p> </o:p></span></p><p class=MsoPlainText><span lang=EN-US>we are happy to announce the following Research Seminar in Economics to take place on Tuesday, October <span style='color:#1F497D'>30th</span> at 18:00 - 19:30 in room E03, ground floor, Mohlstraße 36.<o:p></o:p></span></p><p class=MsoPlainText><span lang=EN-US><o:p> </o:p></span></p><p class=MsoPlainText><span lang=EN-US>Presenter: Henrik Orzen– University of Mannheim<o:p></o:p></span></p><p class=MsoPlainText><span lang=EN-US><o:p> </o:p></span></p><p class=MsoPlainText><span lang=EN-US>Title: "Strategic and natural risk in experimental market entry games"<o:p></o:p></span></p><p class=MsoPlainText><span lang=EN-US><o:p> </o:p></span></p><p class=MsoPlainText><span lang=EN-US>Abstract:<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span lang=EN-US style='font-size:10.0pt;font-family:TTdcr10'><o:p> </o:p></span></p><pre><span lang=EN-US style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:windowtext;mso-fareast-language:EN-US'>We report the results of experiments on market entry. Those who enter make investment decisions to capture value. Payoffs depend on both strategic risk (i.e. the investments of other entrants) and natural risk (i.e. luck). Absent natural risk, participants endogenously sort themselves into entrants and non-entrants and both types earn the same expected payoff, as predicted. Adding natural risk fundamentally changes these conclusions: Here we observe excessive entry and excessive investment so that entrants earn systematically less than the outside option. These payoff differences persist even after many repetitions of the task. When the outside option becomes risky, entry rates increase even further but now many entrants invest little. All entrants still earn significantly less than the outside option. Finally, we examine an environment in which entry is compulsory but where players can choose between a high- and a low-stakes market. Here, we observe under-entry and under-investment in the high-stakes market, while the opposite is true in the low-stakes setting. As a result, returns to entrepreneurship are positive under high stakes and negative under low stakes. Once again, payoffs between the two markets do not equalize. We discuss possible explanations for our various findings.<o:p></o:p></span></pre><p class=MsoNormal><span lang=EN-US style='font-size:10.0pt;font-family:TTdcr10'><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US>Regards,<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US>Prof. Dr. Johannes Pfeifer<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='font-size:10.0pt;font-family:TTdcr10'><o:p> </o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>--<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Johannes Pfeifer<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Department of Economics<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>University of Tuebingen<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Mohlstrasse 36<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>72074 Tuebingen<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Germany<o:p></o:p></span></p><p class=MsoNormal><span lang=EN-US style='mso-fareast-language:DE'>Phone: +49 7071 29</span><span style='mso-fareast-language:DE'>74137<o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>