Ongoing ERC Projects
HISTORICAL MIGRATIONS, TRADE, AND GROWTH (HMTG)
ERC Advanced Grant 2020
Awardee: Thomas CHANEY
Do international migrations foster economic dynamism and growth? Does the presence of immigrants and their descendants alter the attitudes and actions of natives towards foreigners? How do cities emerge and survive? Does economic growth increase wellbeing in the long run? These are but a few of the questions that I explore in this proposed research.
The unifying theme of this research is to test the hypothesis that direct contact between individuals affects their preferences and the technologies they use. This research is articulated around eight distinct projects, each exploring this hypothesis from different angles, at different points in time, and over different horizons. The unifying methodology is to use historical data. Using data spanning the Neolithic, the Bronze Age, the Middle Age, and modern history, working with a team composed of both economists and historians, combining a variety of theoretical, empirical, and methodological contributions, I answer the following questions:
Do migrants contribute to local innovation and growth (project 1.1)? Does the presence of neighbors of foreign ancestry alter the attitudes of local residents towards foreigners (project 1.2)? How does the ethnic composition of cities shape the geography of global altruism (project 1.3)? How do local interactions between Assyrian merchants in the Bronze Age affect the emergence of ancient firms (coalitions) and aggregate trade (project 2.1)? Can the local interactions between travellers explain the emergence of cities in the Neolithic (project 2.2)? Do local interactions between city dwellers and traveling merchants explain the survival and growth of new cities in 13th Century France (project 2.3)? How do migration and trade flows affect the diffusion of technology over millennia (project 3.1)? And finally, as language is the key medium through which individuals interact, how to use written words to quantify the growth in wellbeing in the short and long run (project 3.2)?
Consult the HMTG project information on CORDIS' website (forthcoming)
Read the announcement of the awarding of an ERC grant to Thomas CHANEY
EQUILIBRIUM METHODS FOR RESOURCE ALLOCATIONS AND DYNAMIC PRICING (EQUIPRICE )
ERC Consolidator Grant 2020
Awardee: Alfred GALICHON
This project seeks to build an innovative economic toolbox (ranging from modelling, computation, inference, and empirical applications) for the study of equilibrium models with gross substitutes, with applications to models of matching with or without transfers, trade flows on networks, multinomial choice models, as well as hedonic and dynamic pricing models. While under-emphasized in general equilibrium theory, equilibrium models with gross substitutes are very relevant to these problems as each of these problems can be recast as such.
Thus far, almost any tractable empirical model of these problems typically required making the strong assumption of quasilinear utilities, leading to a predominance of models with transferable utility in applied work. The current project seeks to develop a new paradigm to move beyond the transferable utility framework to the imperfectly transferable utility one, where the agent’s utilities are no longer quasi-linear.
The mathematical structure of gross substitutes will replace the structure of convexity underlying in models with transferable utility.
To investigate this class of models, one builds a general framework embedding all the models described above, the “equilibrium flow problem.” The gross substitute property is properly generalized and properties (existence of an equilibrium, uniqueness, lattice structure) are derived. Computational algorithms that rely on gross substitutability are designed and implemented. The econometrics of the problem is addressed (estimation, inference, model selection). Applications to various fields such as labor economics, family economics, international trade, urban economics, industrial organization, etc. are investigated.
The project touches upon other disciplines. It will propose new ideas in applied mathematics, offer new algorithms of interest in computer science and machine learning, and provide new methods in other social sciences (like sociology, demography and geography).
Consult the EQUIPRICE project information on CORDIS' website (forthcoming)
MOTIVATED READING OF EVIDENCE (MOREV)
ERC Starting Grant 2019
Awardee: Jeanne HAGENBACH
Economists have distinguished for a long time soft and hard information with the understanding that cheap talk is more prone to subjective interpretation than hard evidence. In fact, any piece of evidence carries some of the true underlying information that agents are usually assumed to be willing and able to access. For various reasons, agents may however prefer to avoid disturbing truths or maintain wrong but encouraging beliefs. In MOREV, I propose to study motivated reading of evidence, that is, study how individuals interpret hard information in ways that serve their own purposes. I wish to identify the goals that push the reading of evidence in systematic ways. I also want to study how agents manage to distort this reading, for example by choosing not to read or reason about available evidence. The MOREV project is divided into two parts, each bringing the recent literature on motivated beliefs to a new area of study.
In part 1, I will focus on agents' motivated reading of evidence about other individuals (their ability, their socio-economic characteristics, etc.). Indeed, one may not view a person the same way ahead of cooperative or competitive tasks. It is wellestablished that how close agents feel to each other (as network members or in terms of social identity) affects what they do to each other. I propose to investigate experimentally and theoretically the converse relationship: how do agents’ strategic goals affect their perception of others?
In part 2, I will focus on agents' motivated reading of evidence about products. For example, consumers may purposefully distort their beliefs about some attributes to make their purchasing plans easier to execute or take on. To do so, agents may not interpret vague information skeptically or, more generally, use motivated reasoning processes. By studying these ideas in the lab and in new models, I aim at bringing a novel explanation to the fact that, in many markets, information does not unravel as theory predicts.
Consult the MOREV project information on CORDIS' website (forthcoming)
SOCIAL PREFERENCES, WELL-BEING AND POLICY (SOWELL)
ERC Consolidator Grant 2015
Awardee : Yann ALGAN
"The goal of my project is to develop advanced research into the foundations of social preferences and well-being. If high value is placed on social cooperation and well-being for human development, then it becomes an urgent task to elaborate appropriate theories and measures, to understand their foundations, and to identify policies that will enhance them.
I will advance this research in three steps: 1) The first stage will break new ground in the theory and measurement of social preferences and well-being, by exploiting the "Big Data" revolution and exporting behavioral economics into the field with online representative samples of societies and organizations. 2) The next stage will exploit those new large-scale behavioral measures to analyze the foundations of social preferences, sorting out the role of social cognition, individual life experience and social norms. 3) The third step will be to evaluate how policy affects social preferences and well-being, and in particular in the realms of education, employment and institutions. This project will yield proposals for a new agenda in the assessment of policies, by integrating criteria based on their impact on social cooperation and happiness.
I will propose cutting-edge methods to carry out this research. First I will use the revolutionary possibilities of Big Data to test theories of happiness by exploiting high-frequency behavioral measurements of well-being from Web 2.0. Second I will use computational sciences to develop an online laboratory aimed at studying social behaviors on representative samples of the population and how they relate with real world production and policy, thus addressing the lack of external validity that currently hampers experimental economics. Last, I will combine these new measurements of behavior with randomized trials, in order to assess policy within a new paradigm based on social preferences and well-being. My research is both theoretical, empirical and trans-disciplinary."
other european projects
NEW DIMENSIONS AND APPROACHES TO ANTI-CORRUPTION POLICY (ANTICORPOL)
Horizon 2020 - Marie Sklodowska-Curie Action - European Fellowship
Awardee : Fei XU
Corruption continues to be a central issue in the governance of institutions (public, private or mixed). The scholars and practitioners working on the topic are facing with two challenges: (1) measurement of corruption, which is a thorny issue on empirical studies of corruption, and (2) the increasing awareness of the failure of most anti-corruption policies. The overarching objective of ANTICORPOL is to introduce a new dimension in the discussion of corruption: the degree of corruption (i.e., the depth as opposed to the spread). The benchmark of ANTICORPOL is this: it is unclear whether a system (organization, public administration) with few individuals who terribly deviate from their duty is less/more corrupt, than one with many corrupt individuals who only slightly deviate from their duty. Therefore, the degree of corruption of its members must be an integral part of the debate about corruption in a system and the development of effective policies against it. This proposal raises the following research questions: (R1) How can the degree of corruption of an individual be defined? (R2) Which policies are effective in reducing the distortion of duties of corrupt individuals? (R3) How can the degree of corruption be incorporated into measurements of corruption, at organization/country level? The proposed research is based on both theoretical and empirical methods and the combination of qualitative, comparative and quantitative analysis. This project is inherently of interdisciplinary interest because corruption is a multifaceted issue with economic, political and sociological dimensions. The research findings will contribute to a deeper understanding of corruption and further to the evaluation of the quality of democracy.