Most decisions have consequences that are uncertain and materialize in the future. Perception of uncertainty may be biased when it regards the future. Indeed, recent research led by Emmanuel Kemel, Professor of Economics and Decision Sciences at HEC Paris and CNRS researcher, and Corina Paraschiv, Professor at LIRAES, has found that people are more likely to take risks if the consequences of their decision aren’t felt immediately.
By Emmanuel Kemel
On the eve of the 11th annual D-TEA conference, promoting Dialogues between Theory, Experimental findings and Applications of decision-making (hence the acronym), we talk to its co-organizer Professor Itzhak Gilboa. Last year, the professor of decisions sciences was ranked by Stanford University in the world’s top six theoretical economists. Gilboa’s research centers on decision under uncertainty and decision models whereby uncertainty can’t be quantified. That is called non-Bayesian decision models – as opposed to the Bayesian approach which assigns probabilities based on experience or best guesses. The HEC Paris academic questions these axioms, or self-evident truths. He believes his research can help answer unforeseen crises, called black swans, like the war in Ukraine, health pandemics or the climate crisis. Extracts.
An important concern in the current wave of inflation is whether agents such as firms and households perceive price changes to be persistent and whether this leads them to change their decisions, for example on consumption. In a recent paper, forthcoming in the Journal of Monetary Economics, we have investigated how households form inflation expectations and how they connect these expectations to their consumption decisions, using French household survey data from 2004 to 2018.
By Eric Mengus
More than a decade ago, the euro area went through a sovereign debt crisis, in which governments of Southern Europe faced high borrowing costs compared with countries in the north of the euro area. Ultimately, such high borrowing costs led Greece to default on its sovereign debt. In this article, Eric Mengus, Associate Professor of Economics at HEC Paris, explains the euro area sovereign debt crisis and the lessons to take from it, based on his new research, “Asset Purchase Bailouts and Endogenous Implicit Guarantees”, forthcoming in the Journal of International Economics.
In 1984, a group of young boys living in poor neighborhoods in Montreal took part in a unique experiment. For two years, they received coaching in social skills like self-confidence and perseverance. A new assessment by HEC Professor of Economics Yann Algan, with Elizabeth Beasley, Sylvana Cote, Jungwee Park, Richard E. Tremblay and Frank Vitaro, now reveals the lifelong benefits of this work, not only in terms of life outcomes for the subjects themselves, but also for society at large.
By Yann Algan
Top-quality research and teaching are essential to understand growing inequalities which hinder the urgently needed ecological transition, to interrogate the ESG factors, and to leverage theory and the most ambitious empirical methods. To do so, HEC scholars work with public and private regulators, peers from leading European academic institutions, CEOs and administrators to develop, test, and evaluate novel strategies, policies and practices designed to tackle inequalities in their field. In this Knowledge@HEC issue, we share academic knowledge and highlight professional experiences on those topics. Find the pdf of that issue here.
Because of Europe’s strong social welfare tradition, the social dimension of business has an additional legitimacy and urgency here. Top-quality research and teaching have an essential role to play in understanding growing inequalities which hinder the urgently needed ecological transition, in interrogating the environmental, social and governance (ESG) factors, their interplay and their promise and limitations, in leveraging theory and the most ambitious empirical methods. As a leading business school and research center in France and Europe, HEC Paris’ faculty has a responsibility in providing science-based evidence and practical tools to reinvent the business of tomorrow.
How much information one needs to provide to decision makers to respect transparency while keeping its competitive edge? In a new study using a mathematical probabilistic model, HEC Paris professors in Economics and Decision Sciences Frederic Koessler, Marie Laclau and Tristan Tomala, find the optimal equilibrium of information to reveal for companies in a situation where there are competitors.
By Tristan Tomala , Marie Laclau , Frédéric Koessler
Is globalization’s time up? There are two major, and conflicting, views about this tricky topic. For many economists, free trade is a natural state of the global economic system. Any upheavals – Covid-19, the war between Ukraine and Russia, the resurgence of protectionism - can only result in temporary disruptions which, sooner or later, will be corrected. They are just bursts of irrationality, arising momentarily from political forces upsetting otherwise harmonious economic balance, etc.
Top personalities from the political and academic worlds, including Pascal Lamy, Peter Altmaier, John Denton and Merit Janow, were amongst the 17 speakers at a September 29 conference at HEC Paris on constitutionalism. Over three intense sessions, the policymakers and professors of law explored reforms in governance of public goods. In this article, however, our focus was on how innovative research in faculties should and sometimes does lead to concrete policy proposals.
