To accept carbon pricing, citizens desire viable alternatives to fossil-fuel based options. As inflation and higher interest rates have exacerbated access barriers for capital-intensive green substitutes, the political success of carbon pricing will be measured by how well policy design enables consumers to switch.
This chapter presents a microeconomic, behavioral perspective on bounded rationality and beliefs. It begins with an account of how research on belief biases, in particular via probabilistic belief elicitation, has become mainstream in economics only relatively recently and late, even in behavioral economics (aka “psychology and economics”). The chapter then offers a review of the decision-theoretic foundations of modeling and eliciting (subjective) beliefs as probabilities, as well as selected—both classic and recent—evidence on humans’ bounded rationality from related research in psychology and economics. In doing so, it connects the historical debates within decision theory, on the one hand, and within psychology, on the other, concerning the normative status of expected utility and Bayesianism, as well as its methodological implications. A conclusion draws lessons for the practice of belief elicitation and future research.
The first-ever European Defence Industrial Strategy and its financial leg, the European Defence Industrial Programme, saw the light of day in March 2024. The strategy seeks to ameliorate deficiencies in EU defence readiness identified in light of the Russo-Ukrainian war. It offers an ambitious agenda and tailor-made incentives designed to encourage EU member states to invest more, better, together, and European. The Jacques Delors Institute’s Associate Research Fellow Thierry Tardy and the Jacques Delors Centre’s Security Policy Fellow Sascha Ostanina argue that the strategy is a good start to motivate European countries for more action in the defence sector. However, as long as the EU fails to take on a larger defence mandate via treaty change, the strategy success will hinge upon whether the member states, and their respective industrial defence sectors, will be willing to step up to the plate.
While psychotherapy has been shown to be effective in treating depression, take-up remains low. In a sample of 1,843 depressed individuals, we document that effectiveness concerns are top-of-mind when respondents consider the value of therapy. We then show that the average respondent underestimates the effectiveness of therapy and that an information treatment correcting this misperception increases participants’ incentivized willingness to pay for therapy. Information affects therapy demand by changing beliefs rather than by shifting attention. Our results suggest that information interventions that target the perceived effectiveness of therapy are a potent tool in combating the ongoing mental health crisis.
Combined survey and web tracking data have great potential for social-scientific research. They allow linking information on online behavior with data on reported offline behavior, opinions, and attitudes. At the same time, ethical, legal, and technical challenges make it difficult to disseminate linked web tracking data to the scientific community. This whitepaper aims to address these challenges by providing guidance for researchers and archivists, discussing legal, practical, and ethical aspects, disclosure risks, and establishing a framework for publishing web tracking data. Recommendations for best practices are also provided based on experiences from a research project funded by the German Consortium for the Social, Behavioural, Educational and Economic Sciences.
In 2019, Ursula von der Leyen promised a geopolitical Commission. Back then, the proclamation was largely derided as empty rhetoric. However, in recent years, a dizzying number of geoeconomic initiatives have come from Brussels, revising and tweaking existing tools and measures, developing new instruments, and announcing a grand new European Economic Security Strategy. This policy brief examines the progress made and outlines the key challenges for the next Commission. While the current Commission expanded the EU‘s geoeconomic toolbox, the incoming Commission must prioritise harmonisation to prevent fragmentation, allocate substantial funds to enhance resilience, and streamline institutional processes to facilitate coherent policymaking at a European level.
This paper studies a key element of discrimination, namely when stereotypes translate into discriminatory actions. Using a hiring experiment, we rule out taste-based discrimination by design and test for the presence of two types of belief-based gender discrimination. We document evidence of explicit discriminators—individuals who are willing to discriminate even when their hiring choices are highly revealing of their gender-biased beliefs. Crucially, we also identify implicit discriminators—individuals who do not discriminate against women when taking a discriminatory action is highly revealing of their biased beliefs, but do discriminate against women when their biased motive is obscured. Our analysis highlights the central role played by features of the choice environment in determining whether and how discrimination will manifest. We conclude by discussing the implications for policy design.
Provided it is sufficiently regulated, securitisation can help to fund the economy and share risks within the monetary union. Securitisation combines the advantages of banks in lending and of financial markets in financing. However, a lack of standardisation and legal harmonisation currently prevents the EU from reaping the benefits of this instrument. Weakening the prudential framework will not create a truly European market but may pose new risks to financial stability. Instead, this Policy Brief argues that to scale up securitisation, overcoming the fragmentation in national contract and insolvency laws in the longer term will be key. In the meantime, the European Commission should cut unnecessary red tape and establish an EU-wide standardised securitisation product tailored to an asset class that shows sustainable growth potential. Renovation loans are a promising option.
This paper studies a key element of discrimination, namely when stereotypes translate into discriminatory actions. Using a hiring experiment, we rule out taste-based discrimination by design and test for the presence of two types of belief-based gender discrimination. We document evidence of explicit discriminators—individuals who are willing to discriminate even when their hiring choices are highly revealing of their gender-biased beliefs. Crucially, we also identify implicit discriminators—individuals who do not discriminate against women when taking a discriminatory action is highly revealing of their biased beliefs, but do discriminate against women when their biased motive is obscured. Our analysis highlights the central role played by features of the choice environment in determining whether and how discrimination will manifest. We conclude by discussing the implications for policy design.