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The next Banque de France/Sciences Po Research Seminar "Banks and the Financial System: what regulation?" will host Anthony SAUNDERS (John M. Schiff Professor of Finance at NYU Stern) on the theme:
What's in the Spread: Banks vs Bonds
Dorian HENRICOT (Economist - Banque de France) will give his views on the subject.
Banque de France / Sciences Po Research Seminars discuss issues on banking, financial systems and financial regulation. The objective is to confront the approaches and ideas of academics and practitioners.
If you would like to attend, please contact Sandrine LE GOFF by email.
Seminars are organized by Vivien Levy-Garboua (BNP Paribas), Denis Beau (Sous-Gouverneur, Banque de France), Stéphane GUIBAUD (Professor at Sciences Po).
The next Banque de France/Sciences Po Research Seminar will host Olivier GARNIER (Director General for Economics and International, Banque de France) on March 18th.
Date: Wed, 2020/02/26 - 17:00 - 19:00
Location: Department of Economics, 28 rue des Saints Pères - ROOM H 402
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Nathan MILLER is s an Associate Professor of Strategy and Economics at the Georgetown University McDonough School of Business. Prior to joining Georgetown University, Professor Miller served as an economist at the U.S. Department of Justice Antitrust Division, where he provided economic analysis for numerous antitrust investigations.
His research covers topics in the fields of industrial organisation and finance, including price discrimination, cartel enforcement, cost pass-through, tacit coordination, and incomplete contracts. He has published articles in the American Economic Review, the RAND Journal of Economics, the Journal of Finance, and the Journal of Financial Economics, among other journals.
Nathan MILLER will present a paper, joint with Gloria CHEU and Matthew C. WEINBERG, at the next Empirical IO Seminar on the theme:
The next Empirical IO Seminar will host Michela TINCANI (UCL) on March 10th.
Date: Tue, 2020/02/25 - 14:45 - 16:15
Location: Department of Economics, 28 rue des Saints Pères - ROOM H 402
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On December 10th, 2019 the European Research Council (ERC) announced the winners of the latest “Consolidator Grants” competition.
Consolidator grants are awarded to researchers who defended their PhD thesis 7-12 years ago, before the year of the call. The funding is destined to allow them to build up their teams and to further the impact of their research.
The project “Equilibrium Methods for Resource Allocations and Dynamic Pricing” (EQUIPRICE) submitted by affiliated faculty member Alfred GALICHON, is one of the 43 projects selected for France.
For this particular round, the ERC received 2 453 proposals, out of which approximately 12% will be funded.
It is the 14th time that one of the Department’s faculty members has been awarded an ERC grant in less than 10 years. And this is the second time that Professor Galichon has been awarded a prestigious ERC grant: in 2013 he was awarded an ERC “Starting grant” for his project "ECOMATCH. Matching Markets: Theoretical and Empirical Investigations" and completed in 2017. Alfred Galichon was also awarded a National Science Foundation (NSF) Grant in 2017 for his project “Optimal and equilibrium transport: theory and applications to economics and data science”.
Alfred GALICHON is a Professor of Economics and of Mathematics at NYU as well as the Director of NYU Paris and an affiliated faculty member of the Department.
His research interests span widely across theoretical, computational and empirical questions and include econometrics, microeconomic theory and data science. He is one of the pioneers of the use of optimal transport theory in econometrics, and the author of Optimal Transport Methods in Economics, published in 2016 by Princeton University Press, as well as of an open-source statistical software implementing these techniques, TraME. Alfred Galichon has earned international recognition for his research: he has co-invented vector quantile regression, affinity estimation and the mass transport approach. He is one of the early contributors to optimal martingale transport theory and to equilibrium transport theory.
EQUIPRICE is perfectly aligned with this last contribution: it 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.” Not only will it explore applications in the fields of labour economics, family economics, international trade, urban economics, industrial organisation, etc. but it will touch 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).”
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Nicolas SCHUTZ is Professor of Economics at the University of Mannheim. He is also CEPR Research Fellow, a Junior Member of the Mannheim Center for Competition and Innovation (MaCCI) and a member of the Industrial Economics Committee of the German Economic Association.
His research interests include Industrial Organisation, International Trade and Applied Microeconomic Theory.
Nicolas SCHUTZ will present a paper, joint with Volker NOCKE, at the next Departmental Seminar on the theme:
The next Departmental Seminar will host Chris BLATTMAN on March 2nd.
Date: Mon, 2020/02/24 - 14:45 - 16:15
Location: Department of Economics, 28 rue des Saints Pères/ Paris - ROOM H 405
- Girl hiding her ears and eyes with her hands - Drawing credit: Jeanne Hagenbach
Professor and CNRS researcher at the Department, Jeanne HAGENBACH's research interests are in the field of microeconomics and her work relies in particular on game theory and experimental economics.
In the framework of a very selective competition, Jeanne HAGENBACH was awarded funding from the European Research Council (ERC Starting Grant) to conduct her research project "Motivated Reading of Evidence". Presentation.
In most economic and social contexts, agents base their decisions (to purchase, to invest, to accept a job offer, etc.) on available information. This information can take various forms: it can be verifiable or not, it can provide hard evidence of a fact or simply be a friend’s advice or recommendation. But whatever form information takes, one assumption guides its use in most economic models: agents, who initially lack information, seek to obtain the most accurate depiction of the context in which they are evolving. In other words, agents’ main objective is to discover the true “state of the world” (a microeconomics concept that summarizes the uncertainty of the environment). For example, it is assumed that consumers wish to learn about the nutritional content of their food in order to adapt their diet, that workers want to better understand their work environment as well as the risks they may be taking in order to adapt their efforts, or that applicants like to evaluate precisely their chances of getting a job or a promotion in order to improve their application.
Another goal than learning the truth
In a new research project, Jeanne Hagenbach proposes to challenge this assumption: what if economic agents actually do not always want to know the truth about their environment? In other words, the idea is to consider that agents can form “motivated beliefs”, that is, beliefs that serve a personal objective which is potentially more complex than the one of holding accurate beliefs. In this way, an agent may prefer not to know how slaughterhouses work and continue to consume meat, may want to go on smoking by willfully ignoring the health damage of this habit, or prefer wrongly believing that he/she just got a good deal at the supermarket.
The complex role of beliefs
Research in psychology has shown for long time that beliefs can affect an agent’s well-being directly and not only because they allow him/her to make better choices. For instance, the psychologist Melvin Lerner (1) argues that individuals give an intrinsic value to the belief that the world is a fair place, that people get what they deserve. The field of psychology has also established that, independently of his actions, an agent can suffer merely due to the fact that, once updated with new information, his beliefs contradict those he has held up until now (2).
Elaborate strategies to reach particular beliefs
Like behavioural economics in general, the topic of motivated beliefs has been receiving increasing interest in economics for the past few years now (3). This interest was initially motivated by the observation that individuals always view themselves as better than the average population (in better health, with a smaller chance to divorce, as a more careful driver etc.), a belief which is necessarily wrong. Jean Tirole, who received the Nobel prize in economics in 2014, and Roland Benabou, professor at Princeton University, have gone so far as to propose a model in which an agent uses elaborate strategies to reach and maintain pleasant beliefs about himself (his intelligence, his altruism etc.). In this model, several versions (or “selves”) of the same individual interact strategically: one “self” manipulates another one (4)! Moreover, recent lab experiments have demonstrated that agents memorize positive feedback about themselves better than negative, most probably in order to preserve a motivating or reassuring self-image (5). In this type of experiment, voluntary human subjects are usually assigned randomly to various experimental treatments. Researchers then measure how the treatments affect, for example, beliefs that agents form about their own IQ level. As is commonly done in experimental economics, subjects are paid as a function of the accuracy of their stated beliefs, so as to give them real incentives to reveal their true beliefs.
Holding beliefs about oneself but also about the world
In all works previously mentioned, motivated beliefs are about personal characteristics of the individual: his intelligence, his generosity, his health status. In her project, Jeanne Hagenbach wishes to study how economic agents form beliefs about other individuals and about their economic environment more generally. Do we perceive others in the same way when we are about to compete against them or about to work with them? Which dimensions of a person’s identity do we have in mind in different strategic settings? Which avoidance strategies do consumers use not to learn that some products are polluting the planet? Do they avoid reading the labels, avoid reasoning about these labels or deliberately forget what they learnt? To try to answer these questions, Jeanne Hagenbach uses experimental methods as well as theoretical models. In terms of experiments, we can, for instance, measure how subjects perceive another subject’s CV in different strategic settings that are announced prior to the reading of the CV. Regarding the development of theoretical models, an objective is to show that bounds on rationality may come from purposeful choices from an agent who prefers not to know the whole truth. In particular, it may be that an agent is cognitively able to make all inferences required to learn the truth in some contexts, but that this agent refuses to make these inferences if that truth is disturbing.
The question of information avoidance
According to “classical” economic theory, a decision-maker should never avoid information because it helps him make better choices. It is therefore particularly surprising that in forming motivated beliefs, individuals sometimes avoid available information (6). It follows that public policies which rely on the mandatory disclosure of information – on the risks of some products for health or for the environment, on the methods of data protection etc. – may not be as efficient as one may think. When agents do not want to know, how should they be informed ? And should we be informing them?
- ↑ Melvin Lerner, The Belief in a Just World: A Fundamental Delusion, Plenum Press, 1980
- ↑ Leon Festinger, A Theory of Cognitive Dissonance, Row, Peterson & Company, 1957
- ↑ Roland Bénabou, “The economics of motivated beliefs”, Revue d’économie politique, 2015
- ↑ Roland Bénabou, Jean Tirole – “Self-confidence and personal motivation”, The Quarterly Journal of Economics, 2002
- ↑ Florian Zimmermann, “The Dynamics of Motivated Beliefs”, American Economic Review, 2019
- ↑ Russel Golman, David Hagmann, and Georges Loewenstein, “Information Avoidance”, Journal of Economic Literature, 2017