In this four-year project, Markus Dertwinkel-Kalt from the University of Münster and André Romahn from HHU Düsseldorf are investigating the effects of limited attention on the investment behavior of retail investors. For this purpose, they use experimental as well as field or market data. They are particularly interested in salience effects that firms can exploit with little effort, i.e., those related to the labeling of financial products, to their relative positioning, and to the marketing of particular investment strategies.

Companies use a variety of hurdles to bind consumers to contracts. Misleading contract clauses, incorrect product information, hidden additional costs often spell doom for older, less educated or poorer people.

In order to support German households and companies in the face of skyrocketing energy costs, the so-called gas and electricity price brakes are to come into force from January 1, 2023. The new feature of these relief measures is that both households and industry will receive a transfer, which will increase in contracted gas and electricity prices. Markus Dertwinkel-Kalt of WWU Münster and Christian Wey of HHU Düsseldorf show in a formal model that such transfers create incentives to inflate contracted gas and electricity prices.