Advancing research, industry partnerships and graduate student training in Behavioral Economics & Finance at UC Berkeley.
Berkeley’s philosophy is that behavioral economics enriches rather than contradicts standard economic thought. When the tools of psychology are joined with the proven analytical methods of economics, the results are more powerful and scholars get closer to underlying truths about human behavior.
At Berkeley, Behavioral research is interwoven into the research of academics across departments and schools. Our Mission is to serve as the center of gravity supporting researchers, graduate students and industry partners interested in understanding and applying non-standard economic thinking in their fields of interests
In 1987, a cross-disciplinary course at the University of California, Berkeley marked a milestone for a new field of study. Two professors, an economist and a psychologist, joined forces to teach a PhD class that used the analytical tools of social and cognitive psychology to investigate economic problems. Their teaching was a foundation for what is now known as behavioral economics. This line of study has reshaped the way scholars explain how people make choices, not only as consumers, investors, and employees, but also as voters, patients, students, and in many other areas of life. The two professors, George Akerlof and Daniel Kahneman, went on to win Nobel prizes. And Berkeley became a standard-bearer in this flourishing field, which emerged as a revolutionizing force in economics.
The Initiative for Behavioral Economics & Finance carries on this proud tradition and ensures that Berkeley remains a center of excellence in this field by supporting research, teaching, and graduate student training that meet the highest standards of scholarship, relevance, and innovation. The Initiative promotes Berkeley’s particular brand of behavioral economics on a global stage, an approach that combines rigorous economic analysis with insights drawn from psychology.
The IBEF aims to build a research network and community of practice in these areas. This will facilitate interdisciplinary research in the field and enable the adoption of a behavioral lens in new areas. For reference some of the current research by members in IBEF include:
- How can the principles of behavioral sciences be applied to increase diversity in recruitment and selection in firms?
- How do errors in beliefs and judgements such overconfidence and the sunk-cost fallacy hamper entrepreneurs, and which organizational fixes might help to overcome these hurdles.
- How do principles of behavioral economics help explain why wages, unemployment, and organizational structures look the way they do?
IBEF aims to amplify the impact of behavioral research conducted on campus by enabling strategic partnerships with academic researchers, industry partners, and policy makers . This includes supporting empirical research through industry partnerships, sourcing innovative data for research and disseminating behavioral insights to targeted stakeholders. Through these partnerships, researchers at UC Berkeley will support the adoption of novel, non-standard economic insights to create sustainable systems, processes and policies.
IBEF is committed to empowering the next generation of industry leaders, entrepreneurs and researchers. IBEF will play an active role in identifying opportunities to incorporate insights from behavioral research in masters’ level curriculum, and serve as a partner to student led organizations interested in incorporating tools and methodologies from research into practice.