German Research Foundation/ Deutsche Forschungsgemeinschaft (DFG)

Overview - DFG projects at ESMT Berlin

• Research Grant: The use of Markush structures in pharmaceutical patenting and their effect on R&D competition in drug development

  The use of Markush structures in pharmaceutical patenting and their effect on R&D competition in drug development

  Grant type:	Research grant
  Funding period:	2021-2023
  Research team:	Stefan Wagner (ESMT Berlin)

  Markush structures are molecular skeletons that contain not only specific atoms but also include several placeholders which represent a set of broad set of chemical (sub)structures. They are used by pharmaceutical companies to claim a large class of compounds without the necessity of writing out every fully defined single chemical entity in a patent application. For instance, it has been estimated that the Markush structures claimed within a single patent underlying a blockbuster drug (the European patent EP 0810 209 protects the HIV drug “Prezista”) contain a total of 7*10^13 different compounds. While advantageous for pharmaceutical companies, the use of Markush structures in patent claims has sparked controversial debates amongst policy makers and practitioners. First, Markush structures pose considerable challenges for patent prosecution. Patent offices have voiced that claims involving Markush structures covering many compounds require a disproportionate amount of examiner time and patent office resources compared to simpler claims involving a single molecule. Second, Markush structures create significant uncertainties surrounding patent enforcement. Most importantly, the question to what extent patents based on Markush claims effectively protect all molecules contained in the structure is contentious. It is not clear whether the disclosure of a broad Markush structure is novelty destroying for subsequent selection patents claiming a molecule belonging to the initial Markush claim. Third, it has been questioned whether pharmaceutical companies strategically use Markush structures to obtain overbroad patents to block follow-on R&D by competitors. Such behavior might effectively slow down the pace of innovation and thus reduce overall welfare as incumbents’ market power likely increases and the availability of novels drugs might be reduced due to reduced entry. Against this backdrop, it is surprising that no quantitative evidence exists regarding the prevalence of Markush structures in pharmaceutical patenting and their effect on subsequent innovation activity. This project intends to fill this gap in the literature regarding the strategic use of Markush structures by empirically addressing the following research questions: Q1 – to what extent are Markush structures used in patenting activities, by whom, and in what therapeutic fields? Q2 – what is the effect of Markush patents on product market competition within given therapeutic indications, namely, the set of drugs that seek to address the same disease? Do Markush patents slow down the entry of substitutes and slow down horizontal competition? Q3 – what is the effect of Markush patents on follow-on innovation? Do Markush structures slow down the introduction of next generation drugs?

• Berlin Negotiation Conference

  Berlin Negotiation Conference (postponed to 2022)

  Grant type:	International Scientific Event
  Funding period:	originally 2020 - postponed to 2022
  Researcher:	Martin Schweinsberg (ESMT)

  The Berlin Negotiations Conference is organized by ESMT Berlin and brings together scholars in the areas of negotiations, decision making, and conflict resolution to present and discuss the latest research insights in these fields.

  The Berlin Negotiations Conference welcomes scholars with an interdisciplinary background, all working on evidence-based ways of advancing negotiation outcomes, whether these are financial negotiation outcomes or social negotiation outcomes such as improved relationships with negotiation counterparts or stakeholders. Research insights from the Berlin Negotiations Conference are relevant for the fields of social psychology, sociology, management, and conflict resolution. Practical insights from the Berlin Negotiations Conference on the other hand are relevant for businesses, policy-makers, and non-governmental organizations alike.

  The academic goal of the Berlin Negotiations Conference is to promote excellent scientific research in these topics, bringing together scholars from all over the world with scholars based in Europe, Germany, and Berlin. Scholars who present a paper will interact with the audience in research presentations, providing participants the opportunity to directly engage with the latest research, and to ask questions in an interactive format. 

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• Nagymaros Conference: Organizations and Management

  Nagymaros Conference: Organizations and Management
  (postponed to 2022)

  Grant type:	International Scientific Event
  Funding period:	originally 2020 - postponed to 2022
  Researcher:	Gianluca Carnabuci (ESMT)
  Co-organizers:	Min Liu (Durham University), Glenn Carroll (Stanford University), Mike Hannan (Stanford University)

  The Nagymaros Conference is an international conference on economic sociology (with a special focus on organizational sociology) – a core line of research within the organization and management field. It brings together a selected group of scholars from leading US, European and Asian institutions to discuss questions at the frontier of the field. Since its inception over two decades ago, it has been hosted every year by a different institution.

  The objective of the conference is to provide an opportunity to discuss current research projects at the forefront of the organization and management research, with a special emphasis on organizational sociology. The conference is designed to promote in-depth, constructive discussions of innovative research projects and early-stage ideas. Historically, the rate of papers presented in the conference that ultimately got published in top-tier scholarly journals in management and sociology, such as Administrative Science Quarterly, American Journal of Sociology, Management Science, Organization Science, Academy of Management Journal and Strategic Management Journal, has been very high.

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• Collaborative Research Center: TRR 266 Accounting for Transparency

  Accounting for Transparency

  Grant type:	DFG Collaborative Research Center / Sonderforschungsbereich-Transregio
  Funding period:	2019-2023
  Research team:	Per Olsson, Center for Financial Reporting and Auditing (CFRA), (ESMT Berlin)
  Cooperating institutions:	Humboldt University Berlin, University of Mannheim, Paderborn University (project leads), LMU Munich, Frankfurt School of Finance and Management, WHU – Otto Beisheim School of Management and Goethe University Frankfurt
  Sub-project title:	B05: Transparency and the Equity Market

  The TRR 266 Accounting for Transparency is a trans-regional Collaborative Research Center funded by the German Research Foundation (Deutsche Forschungsgemeinschaft – DFG). The team of more than 80 researchers – from Paderborn University, HU Berlin, University of Manneim, LMU Munich, ESMT Berlin, Frankfurt School of Finance and Management, Goethe University Frankfurt, and WHU - Otto Beiheim School of Management – examines how accounting and taxation affect firm and regulatory transparency and how regulation and transparency impact the economy and society. They intend to help develop effective regulation for firm transparency and a transparent tax system.

  The relevance of these topics has increased since the global financial crisis of 2007 and the resulting demands for greater transparency. Calls for increased transparency are omnipresent, particularly after the recent series of financial crises and public outrage about specific multinational firms that do not pay their fair share of taxes. The Collaborative Research Center TRR 266 Accounting for Transparency intends to help develop effective regulation for firm transparency and a transparent tax system. To this end, the Center's research aims to make an important contribution to increase trust in business and politics. To answer the research questions the researchers will account for the interaction of competing incentives from different areas (managerial accounting, financial accounting and taxation) and conduct the research collaboratively within a team of researchers with diverse areas of expertise.

  The sub-project Transparency and the Equity Market by Per Olsson (ESMT Berlin) and Sönke Sievers (Paderborn University) reinvestigates how financial reporting transparency can be measured in the equity market. This sub-project teams up with four other sub-projects in constructing an extensive dataset describing the financial reporting behavior of publicly listed firms. Using these data and exploiting market reactions around exogenous macro news events, it will identify financial reporting components that are theoretically and empirically connected to equity capital market outcomes. Based on these insights, it will revisit prior evidence on the capital markets effects of financial reporting information and explore whether refined measures of financial reporting transparency can help to improve company valuation.

  More information is available on the official website of the Collaborative Research Center and the TRR 266 YouTube Channel

• Fifth Conference on Recent Advances in Mutual Fund and Hedge Fund Research

  Fifth Conference on Recent Advances in Mutual Fund and Hedge Fund Research

  Grant type:	International Scientific Event
  Funding period:	2019
  Researcher:	Guillermo Baquero (ESMT)
  Cooperating institutions:	School of Business and Economics of the Humboldt University

  Following the successes of the previous four conferences, ESMT Berlin and the School of Business and Economics of the Humboldt University are co-hosting the fifth conference on Recent Advances in Mutual Fund and Hedge Fund Research.

  The scientific goal of the conference is to bring together leading academics interested in asset management in an environment, which facilitates in-depth discussions on a wide range of empirical and theoretical research as well as policy issues relating to mutual funds and hedge funds. To ensure the highest academic standard, a maximum of 9 papers, which have not yet been published or accepted for publication, will be selected for the conference. One hour will be allocated for the presentation and discussion of each paper to facilitate in-depth discussions of the latest state-of-the-art research.

  A secondary goal of the conference is to enable networking between the speakers of the conference, and between speakers and attending doctoral students. A good networking environment ensures the participation of leading academics in the conference. Establishing contacts to leading academics in the field is of high importance to doctoral students to (i) receive feedback on their own research, and (ii) support their future job market strategies. The conference, therefore, will provide ample networking opportunities besides the discussion of research papers.

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• Research Grant: The social process of innovation

  The social process of innovation: The role of novelty and social cues in idea evaluation

  Grant type:	Research grant
  Funding period:	2018-2021
  Research team:	Linus Dahlander (ESMT Berlin), Arne Thomas (ESMT Berlin)

  This research project seeks to push the study of innovation. We look to advance the understanding of an important, yet understudied, phase of the innovation process: the evaluation of ideas proposed for innovation. To understand why some ideas gain support while others do not, we will focus on (1) the role of idea novelty and (2) the role of social cues in the idea evaluation process. As we intend to provide causal evidence on how managers evaluate ideas, we will conduct two field experiments within two organizations where employees generate ideas for innovation and senior managers evaluate them and decide on their implementation.

  Our research project will combine qualitative and quantitative methods and will proceed in three steps. The first step is a qualitative pre-study within the two organizations in which we will conduct the field experiments. We conduct the pre-study to gain a better contextual understanding of the companies’ innovation processes, and it will help us to design effective and appropriate experimental interventions. In the second step, we will collect the employees’ ideas and measure their novelty by topic modeling; a text-analytic method stemming from computer science that can be used to measure idea novelty based on the actual text describing an idea. In the third step, we will conduct the field experiments that analyze the role of novelty and social cues in the idea evaluation process. To do so, we will experimentally vary the conditions under which managers evaluate the proposed ideas.

  While evaluating and selecting ideas has become a key aspect of successful innovation, research on the idea evaluation process is still developing and far from complete. With the proposed research we seek to advance the literature on three accounts. First, the field experimental research design enables us to provide causal evidence on the effect of idea novelty and social cues on idea evaluation. Most of prior research has presented evidence based on correlations and has thus fallen short of this “gold standard.” Second, we make an important methodological contribution by measuring idea novelty based on the actual text describing an idea. Earlier research has largely relied on measures of combinatorial novelty using pre-established schemata, such as patent classes. In contrast, we will employ topic modeling to derive a content-based novelty measure. Third, we advance innovation research by studying the impact of social relationships and content in parallel. Whereas network research on innovation has been criticized for lacking consideration for content, and content studies have been disconnected from social structure, we seek to integrate social relations and content.
  The project will advance theory on idea novelty and social cues, and it will push the research frontier by combining methods from computer science with field experimental designs enabling causal inference.

• International Conference on Intellectual Property

  Annual Conference "European Policy for Intellectual Property" 2018

  Grant type:	International Scientific Event
  Funding period:	2018
  Researcher:	Stefan Wagner (ESMT Berlin)

  The European Policy for Intellectual Property Annual Conference 2018 hosted by ESMT Berlin is jointly organized by EPIP and the Berlin-based Weizenbaum Institute for the Networked Society - The German Internet Institute. The EPIP Annual Conference aims at bringing together scholars, including doctoral students, working on economics, management and law with a focus on intellectual property, along with policy-makers and stakeholders. They foster a highly inter-disciplinary exchange of knowledge. Sessions include contributed papers, keynote presentations and policy-focused panel discussions. Contributions come from and invitations are sent to across the world, with an increasing Asian and BRIC’s presence. The scientific goal of the conference is to promote excellence in research on the governance of intellectual property. Specific emphasis is laid on bringing together leading experts from around the world with researchers that are based in Germany and from other European countries.

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• International Conference on Accounting Research

  Annual Accounting Conference 2018: Accounting Research: "Diversity within Unity"

  Grant type:	International Scientific Event
  Funding period:	2018
  Researcher:	Per Olsson (ESMT Berlin)

  The Annual Accounting Conference 2018 hosted by ESMT Berlin is jointly organized by the Accounting Section of the German Academic Association for Business Research (AS‐VHB) and the International Association for Accounting Education and Research (IAAER). This is the third issue of the Annual Accounting Conference in this format.
   
  The Conference aims to promote scientific international exchange in the field of accounting with a special focus on the newest developments in accounting research and policy making, as well as discuss the future role of accounting and accounting research in an economy that is increasingly characterized by shifting business models and globalization. The scientific goal of the conference is to promote excellence in accounting research on a worldwide basis, with specific emphasis on bringing together leading experts from around the world with researchers that are based in Germany and from other European countries. Researchers from various academic institutions will present and discuss their research in formal sessions with discussants and audience participation.

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• Research Grant: Audit schedules in the presence of concealing effort in supply chains

  
  Audit schedules in the presence of concealing effort in supply chains

  Grant type:	Research grant
  Funding period:	2017-2020
  Research team:	Francis de Véricourt (ESMT Berlin), Caner Canyakmaz (ESMT Berlin)

  This project aims at advancing the theory of operations management on how to uncover issues in supply chains, when suppliers have the capability to evade detection, that is, the ability to exert effort so as to reduce the efficacy of potential audits. Despite the prevalence and practical importance of these evasion capabilities, very few theoretical results exist in the operations and supply chain management literature on this issue. We intend to fill in this gap by developing and analyzing a comprehensive theoretical framework based on stochastic optimization control problems, that captures the essential features of a supplier’s evasion capability, as well as the dynamic nature of audit schedules. The results of this study should provide insights into designing efficient remediation and audit strategies for supply chains that have the ability to evade detection. These strategies will be described mathematically in closed form, which should facilitate their implementation. This project should also reveal how the nature of an evasion capability (such as its cost or efficacy) affects the structure of efficient audit schedules.

• Fourth International Conference on Recent Advances in Mutual Fund and Hedge Fund Research

  Fourth Conference on Recent Advances in Mutual Fund and Hedge Fund Research

  Grant type:	International Scientific Event
  Funding period:	2017
  Researcher:	Guillermo Baquero (ESMT Berlin)
  Cooperating institutions:	School of Business and Economics of Humboldt University Berlin

  Following the success of the previous three conferences, ESMT Berlin and the School of Business and Economics of Humboldt University Berlin are co-hosting the Fourth Conference on Recent Advances in Mutual Fund and Hedge Fund Research. The scientific goal of the conference is to bring together leading academics interested in asset management in an environment, which facilitates networking and in-deptch discussions of the latest research on mutual funds and hedge funds, on a wide range of empirical, theoretical and policy issues.

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• Collaborative Research Center TRR 190: Rationality and Competition

  Rationality and Competition: The Economic Performance of Individuals and Firms

  Grant type:	DFG Collaborative Research Center / Sonderforschungsbereich-Transregio
  Funding period:	2017-2020
  Research team:	Rajshi Jayaraman (ESMT Berlin), Marrit Teirlinck (ESMT Berlin)
  Cooperating institutions:	Ludwig-Maximilians-Universität München (project lead), Humboldt University Berlin, Deutsches Institut für Wirtschaft, ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München e.V, Max Planck Intitute for Innovation and Competition, Technical University Berlin, Wissenschaftszentrum Berlin
  Sub-project title:	Incentive design in the presence of social preferences

  The Collaborative Research Center Transregio “Rationality and Competition” combines the research programs of behavioral and neoclassical economists to study applied economic questions that are of high policy relevance. The focus CRC TRR 190 is on the economic behavior and performance of individuals and firms: How do systematic biases in expectations, decision processes, and preferences affect the most important economic decisions of households – about education, health, labor supply, financial investments and the purchase of durable consumption goods? How do firms respond to behavioral biases of their customers and their employees, for example by adjusting their marketing strategies, their organizational design, their incentive schemes and their innovation activities? Does competition reduce or amplify the effects of behavioral biases of individuals and firms? What economic policy interventions are effective to protect consumers and employees from exploitation and how can they prevent the destabilization of markets (due to bubbles and crashes)? Thus, the CRC “Rationality and Competition” will analyze the allocative consequences and the economic policy implications of different aspects of rationality and deviations from rationality in competitive environments.

  An important empirical question is in what environments behavioral biases have a quantitatively large effect and under what circumstances the standard, neoclassical model is sufficient to explain observed behavior. Answering this question requires the close collaboration of behavioral and neoclassical economists that the CRC is set up to promote. We will employ modern microeconomic theory (including behavioral economic theory) to generate testable hypotheses as well as a wide set of empirical methods using field data, survey data, administrative data and economic experiments.

  The project by Englmaier and Jayaraman focuses on the human resource management practices in firms. A firm’s ability to compete effectively on product markets depends crucially on its success in attracting, retaining, and motivating productive workers in competitive labor markets. Standard economic models focus on the design of incentive mechanisms that are based on monetary rewards. While these are clearly important, the standard model has, until relatively recently, failed to incorporate the presence of social preferences of workers, including fairness, reciprocity, identity and peer effects in the workplace. The project will examine the effects of diverse human resource management (HRM) practices - such as incentive pay, screening for traits, or team based work organization - on worker productivity, and thereby firm competitiveness, while accounting for the possibility that workers are motivated not only by financial considerations but also by social preferences.

  More information is available on the official website of the Collaborative Research Center

  The visiting research stay by Meghan Busse (Kellogg School of Management, Northwestern University) and Florian Zettelmeyer (Kellogg School of Management, Northwestern University) is sponsored by the CRC TRR 190.

• Research grant: Cooperative game theory

  Solidarity, monotonicity, and externalities in cooperative game theory

  Grant type:	Research grant
  Funding period:	2016-2019
  Researcher:	Frank Hüttner (ESMT Berlin)

  Recently, two issues attracted a lot of attention in the literature on cooperative game theory. First, the reconciliation of solidarity and performance orientation and, second, the incorporation of externalities. Our project connects to both lines of research and strives for combining insights from both parts of the literature. The Shapley value probably is the most important single-valued solution concept in cooperative game theory. The Shapley value is strictly performance-oriented and disregards externalities. There exist several solutions that generalize the Shapley value and take into account aspects of solidarity. Characterizations (axiomatizations) allow for a better judgement on the plausibility of these solutions. Similarly, there exist several generalizations of the Shapley value for cooperative games with externalities. Characterizations allow for a better judgement on these generalizations. The existing generalizations are based on the assumption that a solution should satisfy linearity. DeClippel and Serrano (2008, ECTA), however, argue that this is a rather mathematical assumption, which is not too compelling. Ever since Young (1985, IJGT) showed that the Shapley value can be characterized without linearity, researchers tried to do without the assumption of linearity. Casajus and Huettner (2014, JET) succeed to provide a characterization without linearity for solidary solutions. In this project, we aim to make use of these insights when dealing with externalities. We aim for a characterization of established solutions for cooperative games with externalities that do not rely on the linearity axiom. Moreover, we look for further foundations of known solution concepts. We will also study solution concepts that reflect the notion of solidarity in the case of externalities. Further, the formation of stable groups shall be studied in the context of externalities. Finally, new structural insights shall be gained by adapting recent results on cooperative games without externalities.

  Publication: André Casajus and Frank Hüttner, HHL, Working paper No. 154, HHL Leipzig Graduate School of Management, Leipzig, Germany, June 2016
  Decomposition of solutions and the Shapley value

• Research grant: The role of incentives within banks

  The role of incentives within banks

  Grant type:	Research grant
  Funding period:	2014-2016
  Research team:	Jörg Rocholl (ESMT Berlin) together with Tobias Berg (University of Bonn)
  Cooperating institution:	Frankfurt School of Finance & Management

  Short-term, volume-based incentives for bank employees have been blamed for excessive risk-taking and the recent financial crisis. Consequently, regulation of compensation schemes has been one of the pillars of the regulatory reforms in the financial sector. The goal of our project is to establish empirically the link between loan officer incentives and loan default rates. How should incentives and the loan granting process be designed to minimize risks? Based on a novel and proprietary dataset by a major private bank, we want to examine the following three research questions: 1.) How do loan officers react to volume-based incentives when loan decisions are taken based on hard information only? In particular, to what extent are loan officers willing to manipulate even hard information if truthful reporting is incompatible with their personal incentives? 2.) How do loan officers react to a change in incentive structures from a system that rewards/punishes ex-post performance to a pure volume-based incentive system? 3.) If loan officers are volume-incentivized - as is the case at most banks worldwide - does the involvement of risk management in the loan granting process ("4-eyes-principle") lead to better decision making?

  Publication:

  Berg, T., Puri, M., and Rocholl, J. (2016). “Loan officer incentives and the limits of hard information.” AFA 2013 San Diego Meetings Paper.

   

   

• ANR-DFG Research Grant: Competition and Bargaining in Vertical Chains

  Competition and Bargaining in Vertical Chains

  Funding organizations:	Agence Nationale de la Recherche (ANR) & Deutsche Forschungsgemeinschaft (German Research Foundation, DFG)
  Funding type:	French-German research cooperation / Call in Social Sciences and Humanities 2008
  Funding period:	2014-2016
  Researcher:	Özlem Bedre-Defolie (ESMT Berlin)
  Cooperating institutions:	CREST-LEI 28; Deutsches Institut für Wirtschafts-forschung, Berlin; Düsseldorfer Institut für Wettbewerbs-ökonomie (DICE); Ecole Polytechnique (Département d’Economie); Humboldt-Universität zu Berlin; INRA; Ludwig-Maximilians-Universität München; Toulouse School of Economics (TSE); WHU – Otto Beisheim School of Management Economics Department; Universität Mannheim

  The markets where platforms create value by connecting two (or more) distinct groups of customers and facilitating interactions between them by lowering transaction costs and search costs are called two-sided markets. Examples include many important industries, e.g., payment card networks connecting merchants and cardholders. The goal of this project is to analyze how/why these markets differ from standard one-sided markets, how their unique features impact platforms' and their business customers' optimal pricing, quality provision or innovation incentives. The project aims also to investigate welfare implications of platforms' business practices. The project combines theoretical industrial organization research with econometric analyses to inform the ongoing anti-trust and regulatory debates. The project involves researchers from several institutes in Germany and France and will provide a platform, in particular via workshops and seminars, through which these researchers can exchange and find new collaborators and work on joint publications. The project also involves a team of established researchers from Israel, the U.S., Canada and other European countries, who have significantly contributed to this literature. This project will thus provide foundations for the largest network of researchers working in the economics of platforms and thereby significantly contribute to the development of this literature. The overall project consists of four work packages. The goal of the first work package is to analyze a monopoly platform's pricing incentives, its role in coordinating interactions between the groups of users and its role as a matchmaker when end users care about the quality of the match. In particular we study how various forms of price regulations impact those incentives. The goal of the second work package is to understand the impact of platform competition on optimal prices, quality provision, innovation, and ultimately on platforms' profits and the social welfare. We also study the issues related to barriers to entry, trade, mergers between platforms and dynamic platform competition. The third package focuses on platforms' investment incentives in quality provision and innovation. In particular we study how various forms of price or behavioral regulations in different industries - like net-neutrality and access fee regulation in telecom markets, interchange-fee regulation in the payment card industry - impact those incentives. Finally, the fourth work package analyzes how price and behavior restrictions imposed by platforms on their business partners impact on end user prices and quality provision.

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• Research Training Group 1659: Interdependencies in the regulation of markets

  Interdependencies in the regulation of markets

  Funding type:	Research Training Group
  Funding period:	2011-2015
  Research team at ESMT:	Rajshri Jayaraman, Paul Heidhues, Özlem Bedre-Defolie, Sascha Steffen
  Cooperating institutions:	Freie Universität Berlin, Humboldt-Universität zu Berlin, Technische Universität Berlin, WZB, DIW

  The Research Training Group (RTG) 1659 “Interdependencies in the regulation of markets” offers outstanding young researchers a full-time, internationally competitive doctoral program with a unifying research focus and financial support in the form of scholarships. With its participating faculty, the RTG represents all major academic institutions in economics in Berlin: the Freie Universität Berlin, Humboldt-Universität zu Berlin, Technische Universität Berlin, ESMT Berlin, WZB, and DIW. The Deutsche Forschungsgemeinschaft (German Research Foundation) finances the scholarship and the overall program of the RTG as part of its program "Graduiertenkolleg".

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• Research grant: The impact of school lunches

  The impact of school lunches: Evidence from an exogenous policy change

  Grant type:	Research Grant
  Funding period:	2009-2011
  Researcher:	Rajshi Jayaraman (ESMT Berlin)

  Inadequate child education is thought to be major impediment to economic development. Governments and donor agencies obviously have an incentive to implement policies promoting schooling. However, assessing the impact of various policy remedies to poor educational outcomes is problematic because of a chicken and egg problem. Are better outcomes (in say school enrollment or performance) a result of a policy intervention, or do those who have better outcomes simply demand better services? Are worse outcomes due to the quality of schooling provided, or is there purposive placement of public services in disadvantaged areas? Economists refer to these as “endogeneity” problems.

  In 2001, the Indian Supreme Court issued an extraordinary and unexpected directive ordering errant states to properly institute a hot midday meal in primary schools. Using household and school survey data, this the proposed project will use this exogenous policy change to examine the causal impact of this policy—the largest school lunch (and nutrition) program in the world—on children’s schooling outcomes. We will use a number of different econometric approaches in examining the causal effect of midday meals on schooling outcomes, including difference-in-difference-in-difference (DDD) and instrumental variable (IV) methods.