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2011 - 2019

Design & Behavior - Economic Engineering of Firms and Markets DFG Research Unit (FOR 1371)

 

Project Description

The DFG Research Unit (FOR 1371) operated from 2011 to 2019 funded by the research initiative of the Deutsche Forschungsgemeinschaft (DFG). In addition to its scientific successes and contributions, the DFG Research Unit "Design & Behavior" has at the same time proven to be a nucleus for the development of a new area of excellence at the University of Cologne. Based on research group activities, the "Center of Excellence for Social and Economic Behavior" (C-SEB) was founded in 2015.

In many cases, human behavior systematically deviates from the predictions of standard economic theory. Based on the principles of behavioral research, the DFG Research Unit "Design & Behavior" addressed what is known as “economic engineering”. Economic engineering is the science of designing real-world institutions and mechanisms that align individual incentives and behavior with the underlying goals. Mechanisms are important because they influence incentives to which the decision makers in turn respond. In contrast to the standard economic assumptions, decision makers do not behave rationally or selfishly in every situation. Since these deviations occur in a systematic way, it is necessary to develop mechanisms for specific contexts that prove to be robust to such behavioral complexities.

All subprojects carried out by the teams of the DFG Research Unit had in common that they focused on the role of social behavior and their methodical approach combined complementary results from theory, experimental and field research. The focus was on the design of incentives in real companies and markets. Overall, the DFG Research Unit was composed of five subprojects with a broad range of topics including economic cognition, trust in large consumer markets, and the design of incentive systems within and across firms.

The principal investigators Gary Bolton, Roman Inderst, Bernd Irlenbusch, Elena Katok, Thomas Mussweiler, Patrick Schmitz, Dirk Sliwka, Ulrich Thonemann and Achim Wambach as well as the associated senior investigators and researchers were coordinated by Axel Ockenfels. Furthermore, the University of Cologne, the Goethe University Frankfurt am Main and the University of Texas at Dallas were involved in the project as well as the Cologne Laboratory for Economic Research, the Social Cognition Center Cologne and the Laboratory for Behavioral Operations and Economics.

 

Subprojects 

Projects of the first funding period from 2011 to 2014:

P1

Comparative Thinking and Cognitive Engineering in Economic Interaction

Thomas Mussweiler, Axel Ockenfels

P2

Engineering Trust in Markets: Advice and Reputation  

Axel Ockenfels, Gary Bolton, Roman Inderst

P3

Design of Incentive Schemes within Firms: Bonus Systems and Performance Evaluation

Dirk Sliwka, Bernd Irlenbusch, Patrick Schmitz

P4

Auctions, Negotiations and hybrid Mechanisms in Procurement

Achim Wambach, Elena Katok

P5

Supply Chain Engineering

Ulrich Thonemann, Elena Katok

Projects of the second funding period from 2015 to 2019:

P1

Trust: A Social Cognition Perspective

Thomas Mussweiler, Axel Ockenfels

P2

Economic Engineering of Trust

Axel Ockenfels, Gary Bolton, Roman Inderst

P3

Incentives in Firms: Compensation, Ethics and Behavior

Dirk Sliwka, Bernd Irlenbusch, Patrick Schmitz

P4

Auctions, Negotiations and Hybrid Mechanisms in Procurement

Achim Wambach, Elena Katok

P5

Supply Chain Engineering

Ulrich Thonemann, Elena Katok

 

Researchers

A list of all researchers involved in the research unit can be found on this website.

 

Publications

A comprehensive list of associated publications of the research unit can be found on the webpage of the C-SEB.

 

Gender measures

The DFG Research Unit "Design & Behavior" offered several gender equality and equal opportunity measures from 2015-2019. For the "Design & Behavior: Female Researchers Colloquium", the exchange between renowned female professors with PhD students as well as postdocs on topics of career development in science and the compatibility of work and family was organized. Furthermore, ongoing research projects of young female researchers were funded by the "Female Research Grant". Members of the research group were also particularly encouraged to take advantage of the equal opportunity measures and opportunities offered by the University of Cologne. These included Cornelia Harte Mentoring Programs (CHM), Dual Career and Family Support (CFS), Female Career Center (FCC), Career Family Coaching (CFC and various seminars regarding management and leadership by the University of Cologne). Lastly, in response to the efforts of the research group, a parent-child office was established and remains in place at the university and can be used by all researchers and employees of the University of Cologne.