Erasmus University Rotterdam Netherlands Ph.D. Economics

2 Ph.D. positions at the Economic Department of the Erasmus University

Context. The candidates for this project will participate in the D&U
(Decision-and-Uncertainty; http://people.few.eur.nl/wakker/du/links.htm)
group. We are an enthusiastic and internationally active group,
specialized in decision theory, and we collaborate with psychologists,
mathematicians, management scientists, and health economists.

The Economics Department of the Erasmus University has more than 4000
students, and employs over 400 people. It has a long tradition of
research in a wide range of areas. Most of the research takes place
within the Tinbergen Institute in economics (http://www.tinbergen.nl)
and the Erasmus Research Institute of Management (ERIM;
http://www.erim.eur.nl/ERIM).

Title of the Project. Risk and Rationality: Using Empirical Findings
from Prospect Theory to Improve Rational Decisions in Health and Other
Fields.

Description. Prospect theory, the model for decision under risk
introduced by Kahneman & Tversky (1979), is immensely popular in many
fields. Its importance was recognized through the 2002 Nobel prize in
economics. Their paper is the 2nd most cited paper published in any
economic journal (see Table A.10 on p. 88 at
http://homepages.ulb.ac.be/~tcoupe/updaterevealedperformances.pdf).
Prospect theory assumes that, besides (i) rational factors based on
utility and additive probabilities that are studied in classical
approaches, other factors play a role. Such factors are (ii) people’s
sensitivity towards (lack of) information, modeled through subjective
probabilities that may be nonadditive, and (iii) loss aversion-the
special sensitivity of people towards losses. These factors shed, for
instance, new light on the irrational reactions of people to financial
risks and on the damages that can result from such irrationalities.
Remarkably, only few theoretical results have been developed for
prospect theory, and empirical tests have so far been based on ad hoc
interpretations. This project will develop both theoretical foundations
and critical empirical tests for risk and for ambiguity (unknown
probabilities). It applies its findings primarily to the health domain,
and further to insurance, experimental economics, finance, psychological
judgment and decision making, and/or other areas, depending on the
candidate’s background and interests.

Requirements. The desired candidates have a Master’s degree in a
quantitative discipline. Knowledge of mathematics, health economics,
game theory, statistics, econometric analyses, psychological judgment
and decision, and/or programming skills are a plus.

Conditions. We search for two candidates. The positions will be for a
maximum of four years. The gross monthly salary will be minimally € 2000
in the first year, increasing to € 2,558 in the fourth year. There will
also be an 8% holiday allowance.

Applications. Please email applications, including a cover letter
(explanaining why you and this position fit together), and a CV, to
Peter Wakker (Wakker [at] few.eur.nl) as soon as possible. In the case
of future rounds we will ask for letters of recommendation.

Further Information can be obtained from either of the two supervisors,
namely

Professor Peter Wakker (http://people.few.eur.nl/wakker/index.html) and
Professor Han Bleichrodt (http://people.few.eur.nl/bleichrodt).

Application has to be received by 31. January 2009.