International Max Planck Research School on Behavioral Economics and Economic Design (IMPRS Econ)

Mission

Behavioral economics plays a crucial role in economic research by providing a more complete and empirically grounded understanding of human decision-making. Economic design integrates game-theoretical analysis, behavioral insights (largely from behavioral economics) and empirical tools to develop rules, marketplaces, decision architectures and other institutions that align individual incentives with overarching goals. 
Behavioral economics and economic design offer a framework that better explains and predicts economic and social behavior and how people actually think and act, and how these insights can be transformed into well-functioning institutions. This has far-reaching implications for our society. It is the purpose of our IMPRS to provide excellent scientific research to contribute to a plethora of societal problems. To name just a few key aspects, the mission of the IMPRS is to promote novel research on:

• Designing better public policies: 
  Behavioral insights have significantly enhanced the effectiveness of public policy, from improving health and education to increasing participation in retirement savings plans and promoting pro-social behavior that benefit society as a whole. Based on insights into fundamental patterns of human behavior with regards to cooperation, trust, risk-taking or intertemporal choices, the IMPRS will focus, among others, on how to improve public education and individuals’ educational choices, the transition of individuals from school into the labor market, but also the provision of efficient markets for energy, organs or vaccines. In this way, the IMPRS will address contemporary challenges by researching questions valuable for the specific needs of today’s society and it will allow doctoral students to expand their fields of expertise, gain insights and facilitate knowledge transfer, thereby contributing to improving public policies, making them more effective and citizen-friendly.
• Addressing important ethical considerations: 
  Behavioral economics and economic design contribute to addressing pressing challenges such as inequality, climate change, migration or public health. At the same time with addressing these issues, it is important to reflect critically on the ethical dimensions of influencing behavior and the responsible design of interventions, which is another major theme of the IMPRS. One such example would be organ donation. Behavioral insights show that people tend to stick with the default options such as opt-in (people must actively register to be donors) or opt-out systems (everyone is presumed to be a donor unless they decline). Countries with opt-out systems are known to have higher donor rates — not because people are more generous, but because the decision environment nudges them toward the pro-social choice. The IMPRS focuses on the ethical aspects of designing systems that nudge citizens toward specific behavior. This may include specific, ethically relevant questions on vaccination campaigns, tax compliance, charitable giving or healthy eating habits/obesity prevention.
• Understanding the roots of cooperation and its implications:
  Most of the challenges of our time – like dealing with the climate crisis or violent conflicts – are related to questions of human cooperation. It seems even fair to say that these challenges can only be solved by establishing cooperation. One of the key areas of the IMPRS is devoted to understanding the roots of human cooperation. This is investigated in different ways, including laboratory and field studies on how cooperation emerges in early childhood and which socio-demographic factors and institutional design and rules promote it. It also includes the role of the family for establishing cooperation, including questions how (parental and state) paternalism can affect human cooperation and make it a persistent trait in humans. Based on insights into the micro-foundations of cooperation, the IMPRS also investigates how institutions should be designed to foster cooperation even in the presence of individuals with a tendency to free-ride on others. This means that the IMPRS is searching for behaviorally robust institutions that help solve the major challenges that our societies are confronted with.