CRC-TRR 190/1: Rationality and Competition: The Economic Performance of Individuals and Firms

The CRC TRR 190 “Rationality and Competition” combines methods and insights from “behavioral” and “neoclassical” economics to better understand important applied economic problems and to reach more robust economic policy conclusions. The CRC addresses two sets of questions. First, questions about method: How can we use the existing, often rather conceptual insights about behavioral deviations from standard theory and apply them to the traditional fields of economic analysis? Are the existing empirical or experimental demonstrations of behavioral biases – such as reference-dependent preferences, over-confidence, or social preferences – ready to use? Do they capture relevant aspects of economic behavior in real world settings, in particular in competitive environments, where market forces punish irrational behavior? Second, questions about substance: In what areas of economic research is it necessary to engage with a richer model of decision making? In what areas are traditional concepts sufficient? Is the nature of the transmission mechanism the same in both analyses? Do the existing empirical demonstrations of behavioral biases have implications of large economic significance? In the first funding period, the CRC has made important contributions to this research agenda, documented in hundreds of publications and research papers in both basic and applied research. Our work program in the second funding period builds on these results – with a few adjustments: First, we identified several highly promising fields that require more attention, including innovation, inequality, and gender economics. Second, the CRC will also highlight several important new methodical questions, in particular the analysis and measurement of biased beliefs and how to operationalize the notion of “identity”.

Principal Investigators
Weizsäcker, Georg Prof. Ph.D. (Details) (Applied Micro Economics)

participating organizational facilities of the HU

Duration of Project
Start date: 01/2017
End date: 12/2020

Research Areas
Business Administration, Economic Policy and Public Finance, Economics, Economic Theory, Humanities and Social Sciences, Statistics and Econometrics

Last updated on 2021-26-04 at 14:25