Trust in Scientists Key to Compliance with Pandemic Policies
As the world faces a new COVID-19 variant and infections rise in many parts of the globe, adherence to pandemic restrictions and vaccination policies — considered by scientists to be essential to controlling the pandemic — has been uneven, sometimes openly hostile. A new study sheds light on key factors to instilling citizen trust and compliance with public health measures.
Why Student Debt Relief May Fall Short of Its Good Intentions
As the U.S. staggers beneath the weight of its education debt – a crushing $1.6 trillion in 2020 – there are increasing calls for loan forgiveness. But debt forgiveness plans need to be crafted carefully or they might actually disproportionately favor high-income individuals or specific ethnic groups. A duo of Finance researchers, Sylvain Catherine of Wharton School and Constantine Yannelis of Chicago Booth School of Business, explains how to tailor such policies to better redistribute their benefits. Sylvain Catherine is a HEC Paris PhD alumnus.
Yes, Social Entrepreneurship Training Works. Here Is How
Social entrepreneurship is characterized by a deep commitment to a social cause and the desire to develop new business models with economic, social, and ecological impacts. But can people be trained to become better at social entrepreneurship? HEC Paris Professors Thomas Åstebro and Florian Hoos found that social entrepreneurship training works, but only if carefully designed.
How Activist Short Sellers Police Financial Markets
New research analyzes how activist short sellers’ “research reports” convince investors that the companies they target are overvalued. Professors Luc Paugam and Hervé Stolowy of HEC Paris and Yves Gendron of the Université Laval found that the share price of companies targeted by major activist short sellers drop by 11.2%, on average, over three days. Target firms are also more likely to be subsequently delisted, suspended from stock exchanges, or to go bankrupt. Who are activist short sellers and how do they police financial markets?
How Unemployment Insurance Can Foster Business Dynamism
Research by Johan Hombert (HEC Paris) recently published in The Journal of Finance shows that well-designed unemployment insurance is key to foster business dynamism. As unemployment is surging in the wake of COVID-19, the post-crisis policy toolkit should take special care of the design of unemployment insurance.
A New Theory in Economics Helps Predict Future Events
When will be the next financial crisis? Who is going to win the next US presidential elections? How do we create beliefs about such events? By understanding how probabilistic beliefs form, economic theorists can now explain and predict phenomena that depend on rational beliefs. Latest research by Rossella Argenziano and Itzhak Gilboa equips economic modeling with a theory and a set of tools of belief formation, based on statistics and psychology. Some of the immediate applications are the equilibrium selection in coordination games.
Uncertainty Across Disciplines
We, individuals and society, are faced today with many important decisions involving radical degrees of uncertainty. To better communicate on the current state of knowledge about uncertainty, and incorporate it into decisions, Brian Hill, CNRS and HEC Paris Professor of Economics and Decision Sciences, initiated the "Uncertainty Across Disciplines" project, interviewing 10 leading experts on the topic of uncertainty.
Optimal Firm Management and Welfare Maximizing Policies
In early 2020, the European Research Council (ERC) granted €450 million for Europe’s long-term research, because “Europe’s future depends on science and research", reminded Mariya Gabriel, European Commissioner for Innovation, Research, Culture, Education and Youth. Among 185 winning researchers, with expertise ranging across all fields, HEC Paris Professor Bruno Biais was awarded for his research project in finance, entitled "Welfare, Incentives, Dynamics, and Equilibrium". He explains it in this interview.
Is It Rational to Stockpile in Times of Crisis?
The health crisis caused by COVID-19 has triggered an economic one. We observe a significant portion of the population fearing shortage of primary consumption goods and marked stockpiling behavior. Because such behavior increases the risk of shortage, several stores have decided to ration some goods, and governments have had to make public announcements to reassure consumers that there would be no shortage. Avoiding consumer stockpiling is hence one of the key aspects of the management of this crisis. But is it rational to stockpile in times of crisis? We review and discuss the rational and irrational aspects of such behavior.
Labor Market Polarization and the New Geography of Jobs
The labor market is strongly polarized. What consequences on the society? Based on their latest research, professors of Economics Tomasz Michaslki and Eric Mengus explain this "Great Divergence", and give insights on how to find new ways to create added value, both in bigger and smaller cities.