This paper studies a recent legal reform in Germany, which aims to lower commission rates of real estate agents by raising the cost salience of sellers. I find that the reform has backfired and real estate agents have exploited the transition to increase their commission rates. The findings document that in some regions real estate agents increase their commission by up to 2 percentage points, adding over €6,000 in transaction cost to the average home sale. I argue that this arbitrary increase points to seller ignorance. To verify if and why sellers fail to induce price competition, I run a pre-registered survey experiment with 1,062 real estate agents. The survey confirms that 85% of sellers do not attempt to negotiate lower commission rates. The randomized experimental questions suggest that real estate agents may cater to the low willingness of sellers to negotiate by providing misleading reference commission rates and shrouding the economic incidence for sellers.

This paper studies honesty in the face of changing cost. Using field data from a snack delivery company that employs an honesty payment system, the paper presents an event study to analyze how price increases affect pay rates. The honesty payment system expects customers to pay a listed price for each consumed snack. This allows to measure honesty with the pay rate that compares consumption to payments. The results, which draw on deliveries from several thousand firms, show that price increases that make honest behavior more costly cause more cheating. Price increases of 15 percent trigger a fall in pay rates of 11 percent.

Offshore wind plays an ever-increasing role for the global transition to renewable energy. For offshore wind energy to be successful, cost-effective transport of the produced electricity to shore is necessary. The development and operation of the offshore transmission asset is costly and regulated differently across the globe. In this paper, we collect a unique data set that allows to compare cost and quality of offshore transmission assets in two countries with different regulations. With project level data we can control for geographical and technical difference to assess which regulatory design might lead to lower economic costs for the offshore transmission asset. We find that a competitive regime that promotes the integration of wind farm and transmission leads to lower transmission cost and similar transmission availability.