Research in Behavioral Economics and Behavioral Finance
Ulrike Malmendier, Professor
Economics
Applications for Spring 2024 are closed for this project.
Looking for highly motivated apprentices interested in behavioral economics or behavioral finance research for 2022 Fall semester. We list here a selection of ongoing research projects. If selected, you will likely assist with one or more of them based on your interest, and/or with additional similar projects not listed here.
Neuro/Bio Project: This early-stage project combines insights from neuroscience and biology with behavioral economics in order to study the effects of long-term stressors and adverse childhood experiences on economic outcomes such as educational attainment, job choice, or job switching. The project builds on psychology literature evaluating the impact of mental health on economic outcomes, as well as Professor Malmendier’s research on “experience effects,” looking at how past experiences of economic shocks shape our behavior. For example, we ask if chronic stress decreases motivation, hindering job performance or wages? Does experience with personal trauma increase or decrease risk aversion or mobility? Further, we hope to understand how these effects are modulated biologically through age and gender differences and to find instrumental variables for identifying the direct effect of stressors on economic outcomes beyond their impact on other factors, such as opportunities or ability. Apprentices will help evaluate these questions by reviewing related literature, identifying and assessing useful datasets and empirical identification strategies, and running preliminary data analysis.
Politician Voting: Does experience with government services affect lawmaker attitudes towards taxes and public expenditures? To address this question, we look at the voting patterns of congress to see how past experiences with roads, schools, crime and so on affects their decisions to vote for more or less funding for these areas. This paper builds on Professor Malmendier’s prior research looking at experience effects. For example, she has previously investigated how the personal inflation experience of the FOMC affected their voting behavior on interest rate hikes. In this paper, we use biographical details about congressmen collected via web-scraping. Based on schools attended and places lived, we can then use other available data sets to infer something about a politician’s experience and then tie this experience to his actual votes on US federal spending. Apprentices have helped address this question with data work, web scraping, data collection, detailed investigation into the institutional details of US fiscal allocations, and more.
Institutional Memory: This project combines both banking and behavioral economics using almost 100 years of data. First, what has constituted “too much” risk, as defined by regulators, for banks over the last century. We are researching historical regulatory requirements for banks and estimating how many of the banks in our data failed to meet these requirements. Second, building on an emerging literature in (behavioral) micro and macro on how past experiences affect belief formation, this project is among the first to consider institution-level and aggregate implications. Questions applied to the banking sector are: Do past events and corporate performance shape their future behavior? Does the memory of past banking crises explain heterogeneity in future risk-taking choices of banks? If so, what are the potential mechanisms? Apprentices will help answer these questions by working closely with historical banking data and by offering important feedback and ideas on data processing and empirical identification strategies. For more information on this project, please see a related precursor: http://eml.berkeley.edu/~ulrike/Papers/AER%20PnP%20proofs%20Mar26%202015.pdf
Book project: Professor Mamendier’s upcoming book combines all the insights she has gained through her extensive research on “experience effects” in economics. Experience effects refer to the ways in which our past experiences affect our economic and financial decision-making. For example, she has studied how past experiences of high inflation influence the decision to buy a home. Research for this project will require sorting through interdisciplinary evidence from a variety of fields, including neuroscience, psychology, sociology, and economics. It is primarily suitable for students who enjoy reading and creative writing. Apprentices will have the opportunity to aid in the research by reviewing articles (both news articles and academic journal articles), creating outlines, identifying modern and historical examples of experience effects, and reviewing and editing drafts. This project is open to those who are interested, but interest in this project is not required for consideration of your application or selection onto the team.
Qualifications: Qualifications: Applicants should have excellent grades, experience with coursework in economics and mathematics (Econ101a, Econ141 (or Econ C142), Math54 and Math104 preferred), a good work ethic, attention to detail, a strong intellectual curiosity, and experience of working with data. Experience in R, Python, STATA or other programming languages is a plus though not required. Students interested in graduate school in economics, finance or a related field are especially encouraged to apply. Interested students should write, in 400 words or less, a statement of interest and qualifications. Qualified applicants will then be given a short data collection task and interview at a later date.
Hours: 6-8 hrs
Social Sciences