UC Berkeley to Celebrate 30th Anniversary of Behavioral Economics

In spring of 1987, two professors got together from the UC Berkeley economics and psychology departments to teach a new cross-disciplinary class on behavioral economics. The professors, George Akerlof and Daniel Kahneman, went on to win Nobel Prizes for their pioneering work.

On May 20, top economists from around the world—including several Berkeley-Haas thought leaders—will gather to celebrate the 30-year anniversary of behavioral economics at UC Berkeley. The one-day event at the Haas School is by invite only. It will examine the past, present, and future of behavioral economics, which relies on psychological insights into human behavior to explain economic decision-making.

Ulrike Malmendier, the Edward J. and Mollie Arnold professor of finance at Berkeley-Haas and a 2017 Guggenheim Fellow, and Stefano DellaVigna, the Daniel E. Koshland, Sr. Distinguished Professor of Economics, who recently won the American Economic Association’s 2017 award for best paper in applied economics, are the event co-organizers.

Malmendier and DellaVigna (both pictured) are co-directors of the Initiative in Behavioral Finance and Economics at Berkeley. “It is just incredible to have George and Danny back to commemorate the 30^th anniversary of that landmark PhD class,” DellaVigna said. “This is a great occasion to celebrate how deep the roots of behavioral economics are at Berkeley. So many thought leaders in our field emerged here and this is an occasion for us to celebrate that fact.”

“The Berkeley Reformation”

In 2015, Bloomberg columnist Noah Smith described what sets UC Berkeley’s approach apart.

“Their research has taken economics in new directions, in terms of both methods and subject matter,” he said. “It wouldn’t be an exaggeration to say that the Chicago School has been replaced in prominence and influence by what I like to call the Berkeley Reformation.”

UC Berkeley’s influence on the field runs deep. Many of the world’s most influential economists spending time on campus as students or professors. Other well-known UC Berkeley economists include David Romer, a pioneer of New Keynesian business theory, and Maurice Obstfeld, the International Monetary Fund’s chief economist.

A few highlights from the celebration:

• A kickoff with Nobel Laureate and UC Berkeley Prof. Dan McFadden. McFadden invented discrete choice models, which are used to predict consumer choices between two or more alternatives.
• LA Dodgers general manager Farhan Zaidi, who will speak on Behavioral Economics on the Field. Zaidi, who earned a doctorate in behavioral economics at UC Berkeley, previously worked with the Oakland Athletics’ Billy Beane. The Athletics’ “Moneyball” team “defied its low payroll to reach the playoffs in three consecutive seasons with a roster bearing Zaidi’s fingerprints,” according to an article featuring Zaidi in the LA Times.
• George Akerlof, the Daniel E. Koshland Sr. Distinguished Professor Emeritus of Economics at UC Berkeley, and psychology Prof. Daniel Kahneman, both Nobel Laureates, will give a talk titled Back to 1987: Some Ideas for the Future. Akerlof pioneered the economics of asymmetric information in the 1970s, which identified ways that markets could fail.  Kahneman, the Eugene Higgins Professor of Psychology Emeritus at Princeton University’s Woodrow Wilson School, wrote the global bestseller Thinking, Fast and Slow, which was influential in both psychology and economics.
• A panel on Becoming Behavioral Economists at Berkeley will include a group of professors who spent developmental years on campus. The group includes Saurabh Bhargava (Carnegie Mellon University), Zack Grossman (UC Santa Barbara), Devin Pope (University of Chicago), Gautam Rao (Harvard University), Paige Skiba (Vanderbilt),and Justin Sydnor (University of Wisconsin).
• A roundtable on Behavioral Economics: The Next 30 Years, led by long-time UC Berkeley Professor—now at Harvard University—Matthew Rabin. The discussion includes faculty who are currently at Berkeley, such as Shachar Kariv, chair of the Economics Department, and Terrance Odean, a leader in the behavioral finance field, and others who have been faculty or PhD students at Berkeley, including Botond Koszegi (Central European University) and Ted O’Donoghue (Cornell).