Behavioral Economics
The Behavioral Economics area is headed by Ernst Fehr (University of Zurich) and Klaus M. Schmidt (LMU Munich). The area sheds light on the driving forces, biases and motivations behind the decisions of economic agents, including investors, borrowers, consumers, and institutions. It explores the limits of rationality in such decisions and their effects upon markets, policies and resource allocation. Among the aspects to be examined are the roles of social preferences and boundedly rational behavior in decisions under uncertainty and intertemporal choice.
Behavioral economics has exerted a strong influence on economics over the past thirty years by identifying many novel empirical patterns. But we still lack a full understanding of the deep forces underlying these patterns.
Human behavior is systematically influenced by behavioral biases. How do these biases affect human interaction in markets and institutions, and how can we try to improve the outcome?
Ernst Fehr (b. 1956) has been Professor of Microeconomics and Experimental Economics at the University of Zurich since 1994. He has been Global Distinguished Professor of Economics at New York University since 2011. He was director of the Department of Economics at the University of Zurich and an affiliated faculty member of the Department of Economics at the Massachusetts Institute of Technology. He is the former president of the Economic Science Association and the European Economic Association, an honorary member of the American Academy of Arts and Sciences, and John Kenneth Galbraith Fellow of the American Academy of Political and Social Sciences. He was recipient of the Marcel Benoist Prize in 2008 and the Gottlieb Duttweiler Prize in 2013.
He was born in Austria and studied Economics at the University of Vienna, where he later earned his doctorate and completed his post-doctoral degree (Habilitation).
Mr. Fehr has published extensively in top international journals such as Science, Nature, Neuron, American Economic Review, Econometrica, Journal of Political Economy, and the Quarterly Journal of Economics. His research focuses on the proximate patterns and the evolutionary origins of human altruism and the interplay between social preferences, social norms, and strategic interactions. He has conducted extensive research on the impact of social preferences on competition, cooperation, and on the psychological foundations of incentives. More recently he has worked on the role of bounded rationality in strategic interactions and on the neurobiological foundations of social and economic behavior. His work is characterized by the combination of game theoretic tools with experimental methods and the use of insights from economics, social psychology, sociology, biology, and neuroscience for a better understanding of human social behavior.
Klaus M. Schmidt (b. 1961) has been a Full Professor of Economics at LMU Munich since 1995. He did his graduate studies in economics at the London School of Economics and the University of Bonn where he received his PhD in 1991 and his Habilitation (post-doctoral degree) in 1995. He was a visiting professor at the Massachusetts Institute of Technology, Stanford University, Yale University, the University of California at Berkeley, and Harvard University.
His main fields of research are game theory and contract theory, behavioral and experimental economics, industrial organization, and political economy. In recent years, the focus of his research has been on the modeling and the experimental analysis of social preferences and loss aversion and their effects on strategic interaction and the optimal design of incentive schemes. His work has been published in top international journals, including the American Economic Review, Econometrica, the Quarterly Journal of Economics and the Review of Economic Studies.
Klaus Schmidt received the Gossen Prize of the German Economic Association and the Research Prize of the Berlin-Brandenburg Academy of Sciences. He is (or has been) co-editor or associate editor of the Journal of the European Economic Association, the RAND Journal, the European Economic Review, the Review of Economic Studies, and Economic Policy. He is a fellow of the Econometric Society, a member of the Berlin-Brandenburg Academy of Sciences, a member of the scientific advisory board of the German Federal Ministry of Economics, and a fellow of the CESifo Research Network since its inception in 1999.
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The Distinguished CESifo Affiliate Award, aimed at encouraging talented young scholars, is awarded to the best paper presented by a young author at each of the CESifo Area conferences. Accepted candidates are invited to attend the Area Conference to which they have been nominated and present their paper. An award committee will judge the papers (and presentations) and select a winner. Nominations will be considered for candidates who are either close to completion of the PhD, or who have completed their PhD in the previous five years. The same limit applies to co-authors in the case of papers with multiple authors. The criteria for the award are scientific originality, policy relevance and quality of exposition. The winning paper will appear in the CESifo Working Paper Series.
| Year | Distinguished Affiliate(s) | Title of the paper |
| 2025 | Lea Nagel | As-If Dominant Strategy Mechanims |
| 2024 | Charlie Rafkin | Eviction as Bargaining Failure: Hostility and Misperceptions in the Rental Housing Market |
| 2023 | Keyu Wu | How Does Contextual Information Shape Perceptions and Decisions? |
| 2022 | Peter Andre | Shallow Meritocracy |
| 2021 | Suanna Oh | Does Identity Affect Labor Supply? |
| 2020 | Anne Karing | Social Signaling and Childhood Immunization: A Field Experiment in Sierra Leone |
| 2019 | Matthew Lowe | Types of Contact: A Field Experiment on Collaborative and Adversarial Caste Integration |
| 2018 | Teodora Boneva | Socio-Economic Gaps in University Enrolment: The Role of Perceived Pecuniary and Non-Pecuniary Returns |
| 2017 | Benjamin Enke | Kinship Systems, Cooperation, and the Evolution of Culture |
| 2016 | Gautam Rao | Familiarity Does Not Breed Contempt: Diversity, Discrimination and Generosity in Delhi Schools |
| 2015 | Supreet Kaur | Nominal Wage Rigidity in Village Labor Markets |
| 2014 | Alex Imas | The Realization Effect: Risk-Taking After Realized Versus Paper Losses |
| 2013 | Florian Zimmermann | Correlation Neglect in Belief Formation |
| 2012 | Charles D. Sprenger | An Endowment Effect for Risk: Experimental Tests of Stochastic Reference Points |
| 2011 | Johannes Abeler | Fungibility, Labels, and Consumption |
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