Behavioural Economics

The Behavioural Economics area, headed by Ernst Fehr, University of Zurich, and Klaus M. Schmidt, University of Munich, aims at shedding light on the driving forces, biases and motivations behind the decisions of economic agents, including investors, borrowers, consumers and institutions, exploring 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 as well as boundedly rational behaviour in decisions under uncertainty and intertemporal choice.
Assistant to this area is Carmen Thoma.

Area Directors

Ernst Fehr (b. 1956) has been Professor of Microeconomics and Experimental Economics at the University of Zurich since 1994. He was director of the Institute for Empirical Research in Economics and is presently director of the Department of Economics at the University of Zurich, affiliated faculty member of the Department of Economics at the Massachusetts Institute of Technology, 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.

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 international top 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 behaviour. His work is characterised 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 behaviour.

Klaus M. Schmidt (b. 1961) is a full professor of economics at the Ludwig-Maximilians-University of 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 University of California at Berkeley, at Yale, Stanford, and the Massachussetts Institute of Technology.

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 modelling and the experimental analysis of social preferences 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 Price of the German Economic Association and the Research Price of the Berlin-Brandenburg Academy of Sciences. He is (or has been) co-editor or associate editor of the Journal of European Economic Association, the RAND Journal, the European Economic Review and the Review of Economic Studies. He is a fellow of the Econometric Society, a member of the Berlin-Brandenburg Academy of Sciences, and a fellow of the CESifo Research Network since its inception in 1999.

Area Members

Members affiliated with this area

Area Events

CESifo Area Conference on Behavioural Economics