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2018 Erwin Plein Nemmers Prize in Economics

Lecture & ConfERENCE - May 8-10, 2019

"Household Behavior and the Dynamics of Inequality"

David Kreps
Stanford University

Behavioral economics is generally taken to mean economics in which the behavior of individual agents does not conform to the “standard model” of rational behavior.  However, under this banner, one finds a very large number of specific “nonstandard” models of behavior.  This very large number prompts a standard criticism of behavioral economics:  If any behavior is permissible, any conclusion can be reached.  

Using a small handful of examples, the lecture illustrates and fleshes out a test for the value of work in behavioral economics.  This test is based on three principles:

  1.  Is the behavior in the model systematic, at least in some important contexts?
  2. Does positing this behavior lead to economically significant phenomena?
  3. Either via intuition or, preferably, empirical evidence, does the behavior provide "better" explanations of those significant phenomena, where defining the adjective “better” is the crux of the matter.

Video of the lecture

Conference

Thursday, May 9, 2019
Time Title
9:15

Drew Fudenberg (Massachusetts Institute of Technology): Learning-Theoretic Foundations for Equilibrium Refinements
Further readings: Paper 1 Paper 2

10:45 Aislinn Bohren (University of Pennsylvania and Carnegie Mellon University): Learning with a Misspecified View of the World
Further readings: Paper 1, Paper 2, Paper 3.
11:45 Annie Liang (University of Pennsylvania): Machine Learning and Economic Modeling
Further readings: Paper 1, Paper 2
2:00 Tilman Bðrgers (University of Michigan): Mechanism Design and Voting
Further readings: Paper 1, Paper 2, Paper 3
3:00 Benjamin Brooks (University of Chicago): Optimal Auction Design with Common Values: An Informationally-Robust Approach
4:30 Andrzej Skrzypacz (Stanford University): Dynamic Trading: Price Inertia and Front-Running
Friday, May 10, 2019
Time Title
9:15 Aldo Rustichini (University of Minnesota): The Neural Foundations of Economic and Strategic Choice, and the Role of Memory
10:45 Faruk Gul (Princeton University): Market Design and Walrasian Equilibrium 
11:45 Gilat Levy (London School of Economics and Political Science): Correlation Neglect
Further readings: Paper 1, Paper 2
2:00 Gerd Gigerenzer (Max Planck Institute for Human Development): Heuristic Decision Making from a Psychological Perspective
Further readings: Paper1, Paper 2
3:00 Muhamet Yildiz (Massachusetts Institute of Technology): Culture and Communication

Short Course

A short course for faculty and graduate students on "From Discrete- to Continuous-Time Models in Economics, and Back Again." October 24, 28, 30, November November 4, 6, 11, 13, 2019. View the Course Announcement

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