Projekt group B

Applying alternative concepts of individual decision making to economic problems

In the fields of management and economics, alternative concepts of individual decision making are to be considered relevant only if they provide a better understanding of economic problems. Economic phenomena which are not easily explained by traditional theories are observed. However, little work has been done yet to show that alternative behavioral models can resolve these puzzles. The projects of group B intend to fill this gap by showing that the new theories can fruitfully be applied to provide a better understanding of empirical findings in management and economic policy research. Understanding why certain predictions of traditional models are not supported by empirical observation is essential for the improvement of economic policy and management advice. In this respect, the projects of group B cover applied work. The projects of group B also study more basic questions concerning the aggregation of individual preferences. When individual preferences deviate from rationality postulates, it is not clear whether and to which extent market aggregates, like prices and the intertemporal or interpersonal allocation of goods, will be influenced. Individuals might be disciplined by the market or prices might be determined by the preferences of fully rational participants alone. The interaction with others in a market might lessen or reinforce individual "irrationality". The aggregation of preferences in markets is therefore studied in market experiments. Modeling these aggregation processes is another aim of the projects.

B1 - Neoclassical and behavioral approaches to life-cycle saving and portfolio decisions
Professor Axel Börsch-Supan, Ph.D.
B4 - Uncertain preferences and markets
Professor Dr. Dr. h.c. Martin Weber
B8 - Behavioral Industrial Organization
Professor Jörg Oechssler, Ph.D.
B9 - Attitudes to risk, company valuation, and the design of executive compensation contracts
Professor Ernst Maug, Ph.D.

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