Workshop: Behavioral Finance for Policy and Regulation

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Focus

Research in Behavioral Finance has accumulated numerous important theoretical and empirical results. Their economic implications have sparked the interest of policy makers and international organizations alike. Despite this interest, it remains hazy how current research findings, which carry direct as well as indirect policy recommendations, can be used to design institutions and regulate markets and products. This is where our workshop comes in: We want to focus on how the results of Behavioral Finance research can be applied to benefit society most. Specifically, we want to discuss and develop viable solutions in three key areas:

1) Implementation: Which results have found their way into regulation and which have not? What are the reasons for the differential treatment of research findings? Should researchers focus on topics most relevant for regulators and institutions or rather concentrate on the scientific fundamentals?

2) Effects on regulation: Do the effects of subtle nudges have the same economic relevance and power as classical examples of “hard” regulation, such as taxes, fees, and the outright prohibition of certain actions? Are behavioral approaches crowding-out hard regulation? If so, is greater political feasibility bought with reduced effectiveness?

3) Robustness: Methods and results of research in Behavioral Finance are still young and draw heavily from different disciplines. Are the findings replicable and robust to parameter changes of reasonable size? Are they externally valid in the sense of being transferable to the relevant regulatory context?  Indeed, do we trust our results enough to let them serve as the fundament of far-reaching regulation, for example in the areas of banking and finance?

Dates

Arrival:                 Thursday, July 6
Workshop:         Friday and Saturday, July 7 – 8
Departure:         Sunday, July 9
 

Venue

Internationales Wissenschaftsforum Heidelberg (IWH, link)
Hauptstrasse 242
69117 Heidelberg (map)

Sponsors

University of Heidelberg, Research Council Field of Focus 4: Regulation & Self-Regulation

Frankfurt School of Finance & Management

Fritz-Thyssen-Foundation

Contact: