Behavioral Economics

Behavioral Economics has developed into an independent field of study over the past few decades and is now also found within individual subfields of economics, such as Behavioral Finance, Behavioral Macroeconomics, or Behavioral Industrial Organization. What all these approaches have in common is that they are based on a richer understanding of human behavior, going beyond the standard assumption of rationality and self-interest.

Well-known economists from the early days, such as Adam Smith, had already questioned the standard assumptions. However, at that time, there was no convincing alternative model, and in most cases, the standard assumptions provided good predictions and served as the basis for economic policy recommendations. The experimentally discovered "biases"—systematic deviations from the standard assumptions—were the first steps toward behavioral economics, initially undertaken by psychologists. Over time, it became clear that these observed biases were sufficiently systematic to build independent theories of behavior and to offer recommendations on an individual, economic, and political level. These recommendations were increasingly tested in field experiments. In particular, 'behavioral nudging'—influencing behavior without explicitly restricting it—was tested extensively, but has also sparked significant controversy.

Current research questions concern the heterogeneity of preferences and biases—how they differ across cultures and how they have developed over time. And how do they matter? What environments and institutions are most affected by biases, where have these biases a strong impact on welfare? And, of course, which interventions can leverage specific biases to produce positive effects, and what measures can reduce biases where they have negative consequences?

Keynotes

Our keynote lectures provide us spotlight on such topics. Matthew Rabin (Harvard University) has made fundamental contributions to modeling human behavior, such as reciprocity, risk, or reference points. Ulrike Malmendier (University of California, Berkeley) conducted influential studies on cognitive biases such as time inconsistency or overconfidence in laboratory and field experiments, and most recently on how past experiences shape economic preferences and beliefs. Lucia Reisch (Cambridge Judge Business School) has made significant contributions to understanding the influence of psychological factors on consumer behavior and decision-making. Her research in consumer protection has also led to her role as a consultant, collaborating with the EU, the World Bank, and governments worldwide.

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Moderation: Jürgen Huber (University of Innsbruck)

Monday 14 Sept. / 14:00 Keynote Matthew Rabin

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Abstract + Foto

Moderation: Klaus M. Schmidt (LMU Munich)

Wednesday 16 Sept. / 12:00 Keynote Ulrike Malmendier

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Abstract + Foto

Moderation: Dorothea Kübler (WZB / TU Berlin)

Panel of the Core Conference

Tuesday 15 Sept. / 16:30-17:30

Behavioral economics in action

How are insights from behavioral economics used for giving advice to policy makers, firms, or consumers? In this panel we discuss with behavioral economists who apply their insights in practical settings beyond academia. Which findings are truly generalizable? Are there standard behavioral theories that work well in practice? And what evidence should guide decisions in applied settings?

Moderation: Urs Fischbacher (University of Konstanz)

Panelists: 

• Ernst Fehr (University of Zurich)
• Martin Kocher (Österreichische Nationalbank, University of Vienna)
• Ulrike Malmendier (University of California, Berkeley)
• Lucia A. Reisch (Cambridge Judge Business School)