infonet-economy

Der Europäische Forschungsrat vergibt insgesamt 2,8 Millionen Euro Fördergelder an zwei Forschende der Wirtschaftswissenschaftlichen Fakultät. Mit den hoch dotierten ERC Starting Grants können Prof. Dina Pomeranz und Prof. Florian Scheuer vom Institut für Volkswirtschaftslehre während fünf Jahren ihre Forschungsgruppe aufbauen.

Zum vierten Mal in Folge steht Prof. Ernst Fehr vom Institut für Volkswirtschaftslehre an der Spitze der einflussreichsten Ökonomen in der Schweiz und in Österreich. Ebenfalls unter den Top 20 in der Schweiz ist Prof. David Dorn - er gehört im diesjährigen Ranking zu den grössten Aufsteigern.

Mitigation and adaptation represent two solutions to the issue of global warming. While mitigation aims at reducing CO2 emissions and preventing climate change, adaptation encompasses a broad scope of techniques used to reduce the impacts of climate change once they have occurred. Both have direct costs on a country’s Gross Domestic Product, but costs also arise from temperature increases due to inaction. This paper introduces a tipping point in a real options model and analyzes optimal investment choices in mitigation and their timing.

Has rising trade integration between the U.S. and China contributed to the polarization of U.S. politics? Analyzing outcomes from the 2002 and 2010 congressional elections, we detect an ideological realignment that is centered in trade-exposed local labor markets and that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by their congressional voting record, we find strong evidence that congressional districts exposed to larger increases in import competition disproportionately removed moderate representatives from office in the 2000s. Trade-exposed districts initially in Republican hands become substantially more likely to elect a conservative Republican, while trade-exposed districts initially in Democratic hands become more likely to elect either a liberal Democrat or a conservative Republican. Polarization is also evident when breaking down districts by race: trade-exposed locations with a majority white population are disproportionately likely to replace moderate legislators with conservative Republicans, whereas locations with a majority non-white population tend to replace moderates with liberal Democrats. We further contrast the electoral impacts of trade exposure with shocks associated with generalized changes in labor demand and with the post-2006 U.S. housing market collapse.

The structure of marriage and child-rearing in U.S. households has undergone two marked shifts in the last three decades: a steep decline in the prevalence of marriage among young adults, and a sharp rise in the fraction of children born to unmarried mothers or living in single-headed households. A potential contributor to both phenomena is the declining labor-market opportunities faced by males, which make them less valuable as marital partners. We exploit large scale, plausibly exogenous labor-demand shocks stemming from rising international manufacturing competition to test how shifts in the supply of young ‘marriageable’ males affect marriage, fertility and children's living circumstances. Trade shocks to manufacturing industries have differentially negative impacts on the labor market prospects of men and degrade their marriage-market value along multiple dimensions: diminishing their relative earnings—particularly at the lower segment of the distribution—reducing their physical availability in trade-impacted labor markets, and increasing their participation in risky and damaging behaviors. As predicted by a simple model of marital decision-making under uncertainty, we document that adverse shocks to the supply of `marriageable' men reduce the prevalence of marriage and lower fertility but raise the fraction of children born to young and unwed mothers and living in in poor single-parent households. The falling marriage-market value of young men appears to be a quantitatively important contributor to the rising rate of out-of-wedlock childbearing and single-headed childrearing in the United States.

From 22-26 August 2017 three young scientists from the Department of Banking and Finance had the extraordinary opportunity to meet and exchange views with 17 Nobel Laureates. Chiara Perillo, Vladimir Petrov and Veronika Stolbova were three of 350 participants from 66 countries.

The four essays of this dissertation deal with different topics in microeconometrics, including model building, identifcation, and estimation.

Decades of classic economic research have neglected the role of incidental and integral emotional factors in human decision-making. Standard economic models assume that decision-making is consequentialist in nature: Decision-making is postulated to be guided by the decision maker’s rational assessment of desirability and likelihood of alternative outcomes, i.e., by his strive to maximize utility (Rick & Loewenstein, 2008). However, advances in psychology and behavioral economics led to the gradual acceptance of incidental and integral emotion-related forces on decision-making. Still, we particularly lack detailed insight into the neurobiological mechanisms of the interaction between emotion and decision-making.
The purpose of this dissertation was to gain a more detailed understanding of these neurobiological substrates of the modulatory effects of different emotion-related factors on decision-making. To this end, four studies investigated different aspects of this interaction with behavioral, neuroimaging and neurostimulation tools.
Study A employed transcranial magnetic stimulation in order to investigate the neurobiological mechanisms causally underlying the framing effect, a decision-making bias hypothesized to be based on the influence of integral emotion on the decision-making process. This study shows that temporal disruption of activity in unilateral dorsolateral prefrontal cortex, a brain region known for its involvement in cognitive control, does not lead to changes in framing susceptibility, and casts doubt on the essential role of this brain region in the framing effect.
In Study B, the effects of incidental anticipatory anxiety on risky decision-making in a non-social context were investigated. The results demonstrate that induced anxiety leads to significant changes in neural value coding (especially in insula, ventral striatum and ventromedial prefrontal cortex), without changes in observable behavior (i.e., choices).
Study C focused on the effects of incidental anticipatory anxiety on social decisionmaking. Anticipatory anxiety caused a breakdown in trusting behavior, which was correlated with activity and connectivity changes in neural social cognition networks (e.g., temporoparietal junction, posterior superior temporal sulcus). The results of Studies B and
C highlight the task- and context-specific effects of anxiety on behavioral and neural aspects of non-social and social risky decision-making.
Study D addressed the neuroanatomical substrate of emotion-related traits (i.e., personality and emotion-related traits) consistently found to influence daily decisionmaking.I found unique and specific associations between distinct affective and personality features such as impulsivity, sensation seeking, and negative emotionality and brain morphometry. Importantly, the identified brain regions have been shown to be (functionally and structurally) involved in decision-making and valuation. This finding emphasizes the association between affective and personality traits and variation in individual decisionmaking styles.
In sum, this dissertation contributes to a detailed understanding of the modulatory influence of emotion on decision-making. I present different neurofunctional and neurostructural correlates of emotion-decision-making interactions, which are highly taskdependent. Notably, these findings might offer a neurobiological account for deviant decision-making observed in numerous psychiatric disorders such as anxiety and affective disorders.