Peter Bossaerts

Last updated

Peter L. Bossaerts (10 January 1960 in Antwerp, Belgium) is a Belgian-American economist. He is considered one of the pioneers and leading researchers in neuroeconomics and experimental finance. [1] [2] [3] [4] He is Professor of Neuroeconomics at the University of Cambridge.

Contents

Life

Bossaerts grew up in Belgium and studied at the Universitaire Faculteiten Sint-Ignatius Antwerpen (today University of Antwerp) from 1977 to 1982, where he obtained a Licenciate (Bachelor) and Doctorandus (Master) in applied economics. After coursework towards a PhD in statistics at the Vrije Universiteit Brussel, he earned a Ph.D. at University of California in Financial Economics under the supervision of Richard Roll.

He began his academic career as a research associate at Carnegie Mellon University, then worked as an assistant professor in finance from 1986 to 1990. He joined the California Institute of Technology (Caltech) in 1990 as an assistant professor and became an associate professor in 1994, full professor in 1998, William D. Hacker Professor of Economics and Management in 2003, before being appointed as Dean ("Division Chair") of the Humanities and Social Sciences. From 2007 to 2009, he was Swiss Finance Institute professor at the Swiss Federal Institute of Technology, Lausanne (EPFL). In 2013, he moved from Caltech to the Eccles School of Business of the University of Utah, and in 2016 on to the University of Melbourne (Australia), where he was professor in experimental finance and decision neuroscience, and was awarded a Redmond Barry Distinguished Professorship. He was co-head of the Brain, Mind and Markets Laboratory and was Honorary Professor at the Florey Institute of Neuroscience and Mental Health. In 2022, he moved to the University of Cambridge, UK, where he is now the Leverhulme International Professor of Neuroeconomics at the Faculty of Economics.

Bossaerts is an elected Fellow of the Econometric Society , the Society for the Advancement of Economic Theory , and the Academy of the Social Sciences in Australia . He was president of the Society for Neuroeconomics and the Society for Experimental Finance.

He has published numerous scientific articles in well-known field journals such as Econometrica , Journal of Political Economy , Journal of Finance , Review of Financial Studies , Neuron, Journal of Neuroscience, Econometric Theory, Mathematical Finance, as well as general science journals such as Science and Proceedings of the National Academy of Sciences. He summarised his earlier research on asset pricing and experimental finance in the 2002 book "The Paradox of Asset Pricing". [5]

He is the father of two children and lives in Eltham, Victoria (Australia)

Research

Bossaerts is one of the pioneers of experimental finance, which is the use of controlled experiments to test theories in finance and designs for better allocation of risks and/or aggregation of information. He advanced the approach to test the core dynamic model used in finance, macro-economics and central banking to understand the link between asset prices, aggregate income, aggregate consumption, and business cycles (the "Lucas" model). [6] This allowed him to test some of the major models of asset pricing (CAPM, [7] Lucas Model or DGSE [8] ) that are used widely throughout academia, industry and government, in teaching, analysis of historical data from the field, and in setting policy and regulation. This allowed him also to try novel market designs, such as combinatorial double auctions, [9] to improve allocation of risk, as well as to initiate a unique program on research and teaching of algorithmic (automated; robot) trading.

Bossaerts pioneered neuroeconomics, where decision theory and game theory is brought to bear on interpreting computational signals in the brain. [10] [11] This has led to the emergence of the new fields of decision neuroscience and computational neuropsychiatry. In the past, his work has focused on decision making under uncertainty, where uncertainty is understood as in probability theory. Recently, he has been studying uncertainty that is generated by computational complexity. [12] [13]

Related Research Articles

Finance refers to monetary resources and to the study and discipline of money, currency and capital assets. As a subject of study, it is related to but distinct from economics, which is the study of the production, distribution, and consumption of goods and services. Based on the scope of financial activities in financial systems, the discipline can be divided into personal, corporate, and public finance.

Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on both sides of a trade". Its concern is thus the interrelation of financial variables, such as share prices, interest rates and exchange rates, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing and corporate finance; the first being the perspective of providers of capital, i.e. investors, and the second of users of capital. It thus provides the theoretical underpinning for much of finance.

<span class="mw-page-title-main">Robert C. Merton</span> American economist

Robert Cox Merton is an American economist, Nobel Memorial Prize in Economic Sciences laureate, and professor at the MIT Sloan School of Management, known for his pioneering contributions to continuous-time finance, especially the first continuous-time option pricing model, the Black–Scholes–Merton model. In 1997 Merton together with Myron Scholes were awarded the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel for the method to determine the value of derivatives.

<span class="mw-page-title-main">Vernon L. Smith</span> American economist and Nobel laureate (born 1927)

Vernon Lomax Smith is an American economist who is currently a professor of economics and law at Chapman University. He was formerly the McLellan/Regent’s Professor of Economics at the University of Arizona, a professor of economics and law at George Mason University, and a board member of the Mercatus Center. Along with Daniel Kahneman, Smith won the 2002 Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics and his work in the field of experimental economics, which helped establish “laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms”.

Behavioral economics is the study of the psychological, cognitive, emotional, cultural and social factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory.

Neuroeconomics is an interdisciplinary field that seeks to explain human decision-making, the ability to process multiple alternatives and to follow through on a plan of action. It studies how economic behavior can shape our understanding of the brain, and how neuroscientific discoveries can guide models of economics.

Experimental economics is the application of experimental methods to study economic questions. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market mechanisms. Economic experiments usually use cash to motivate subjects, in order to mimic real-world incentives. Experiments are used to help understand how and why markets and other exchange systems function as they do. Experimental economics have also expanded to understand institutions and the law.

Stephen Alan "Steve" Ross was the inaugural Franco Modigliani Professor of Financial Economics at the MIT Sloan School of Management after a long career as the Sterling Professor of Economics and Finance at the Yale School of Management. He is known for initiating several important theories and models in financial economics. He was a widely published author in finance and economics, and was a coauthor of a best-selling Corporate Finance textbook.

Kevin McCabe is an American economist and economic theorist. He works in the fields of experimental economics, neuroeconomics and the study of human trust and decision making.

<span class="mw-page-title-main">Lars Peter Hansen</span> American economist

Lars Peter Hansen is an American economist. He is the David Rockefeller Distinguished Service Professor in Economics, Statistics, and the Booth School of Business, at the University of Chicago and a 2013 recipient of the Nobel Memorial Prize in Economics.

The goals of experimental finance are to understand human and market behavior in settings relevant to finance. Experiments are synthetic economic environments created by researchers specifically to answer research questions. This might involve, for example, establishing different market settings and environments to observe experimentally and analyze agents' behavior and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanism and returns processes.

<span class="mw-page-title-main">Jean Tirole</span> French professor of economics

Jean Tirole is a French economist who is currently a professor of economics at Toulouse 1 Capitole University. He focuses on industrial organization, game theory, banking and finance, and psychology. In particular, he focuses on the regulation of economic activity in a way that does not hinder innovation while maintaining fair rules.

Jakša Cvitanić is a Richard N. Merkin Professor of Mathematical Finance at the California Institute of Technology. His main research interests are in mathematical finance, contract theory, stochastic control theory, and stochastic differential equations.

Gunduz Caginalp was a Turkish-born American mathematician whose research has also contributed over 100 papers to physics, materials science and economics/finance journals, including two with Michael Fisher and nine with Nobel Laureate Vernon Smith. He began his studies at Cornell University in 1970 and received an AB in 1973 "Cum Laude with Honors in All Subjects" and Phi Beta Kappa. In 1976 he received a master's degree, and in 1978 a PhD, both also at Cornell. He held positions at The Rockefeller University, Carnegie-Mellon University and the University of Pittsburgh, where he was a professor of Mathematics until his death on December 7, 2021. He was born in Turkey, and spent his first seven years and ages 13–16 there, and the middle years in New York City.

<span class="mw-page-title-main">Carsten Herrmann-Pillath</span> German economist and sinologist

Carsten Herrmann-Pillath is a German economist, sinologist, and philosopher of economics. He is the professor of Economics and Permanent Fellow at the Max Weber Centre for Advanced Cultural and Social Studies, Erfurt University, Germany.

David Alan Easley is an American economist. Easley is the Henry Scarborough Professor of Social Science and is a professor of information science at Cornell University.

Paul W. Glimcher is an American neuroeconomist, neuroscientist, psychologist, economist, scholar, and entrepreneur. He is one of the foremost researchers focused on the study of human behavior and decision-making, and is known for his central role in founding and developing the field of neuroeconomics which takes an interdisciplinary approach to understanding how humans make decisions. Glimcher also founded the Institute for the Study of Decision Making at New York University (NYU). Today he serves as Chair of the Department of Neuroscience and Director of the Neurosciences Institute at NYU's Grossman School of Medicine.

Felix Kübler is a German economist who currently works as Professor of Financial Economics at the University of Zurich. His research interests include computational economics, general equilibrium theory and portfolio choice. In 2012, he was awarded the Gossen Prize in recognition of his contributions to economic research.

<span class="mw-page-title-main">Aldo Rustichini</span> Italian-born American economist

Aldo Rustichini is an Italian-born American economist, academic and researcher. He is a professor of economics at University of Minnesota, where is also associated with the Interdisciplinary Center for Cognitive Sciences.

Hui Chen is the Nomura Professor of Finance and a Professor of Finance at the MIT Sloan School of Management and a research associate at the National Bureau of Economic Research. Hui Chen is a co-editor of the Annual Review of Financial Economics.

References

  1. ↑ „Ein Dekan des California Institute of Technology (Caltech) kommt nach Lausanne“, Eidgenössische Technische Hochschule Lausanne, 4. Juli 2007
  2. ↑ „Im Anleger-Hirn“, Neue Zürcher Zeitung, 10. Dezember 2007
  3. ↑ "Revolutionary markets research focuses on the other AI". Financial Review. 2018-09-21. Retrieved 2018-11-10.
  4. ↑ "Emerging insights into the way we choose". Pursuit. 2016-05-20. Retrieved 2018-11-10.
  5. ↑ Peter Bossaerts (3 December 2013). The Paradox of Asset Pricing. Princeton University Press. ISBN   978-1-4008-5066-2.
  6. ↑ "Prof Peter Bossaerts". findanexpert.unimelb.edu.au.
  7. ↑ Bossaerts, Peter; Plott, Charles (2004-06-01). "Basic Principles of Asset Pricing Theory: Evidence from Large-Scale Experimental Financial Markets *" (PDF). Review of Finance . 8 (2): 135–169. doi:10.1023/b:eufi.0000035190.24818.e5. ISSN   1572-3097.
  8. ↑ ASPAROUHOVA, ELENA; BOSSAERTS, PETER; ROY, NILANJAN; ZAME, WILLIAM (2016-11-10). ""Lucas" in the Laboratory". The Journal of Finance. 71 (6): 2727–2780. doi:10.1111/jofi.12392. ISSN   0022-1082. S2CID   13912491.
  9. ↑ Bossaerts, Peter; Fine, Leslie; Ledyard, John (October 2002). "Inducing liquidity in thin financial markets through combined-value trading mechanisms". European Economic Review. 46 (9): 1671–1695. CiteSeerX   10.1.1.26.5637 . doi:10.1016/s0014-2921(02)00240-4. ISSN   0014-2921.
  10. ↑ Preuschoff, Kerstin; Quartz, Steven R.; Bossaerts, Peter (2008-03-12). "Human Insula Activation Reflects Risk Prediction Errors As Well As Risk". Journal of Neuroscience. 28 (11): 2745–2752. doi:10.1523/JNEUROSCI.4286-07.2008. ISSN   0270-6474. PMC   6670675 . PMID   18337404.
  11. ↑ Hampton, Alan N.; Bossaerts, Peter; O'Doherty, John P. (2008-05-06). "Neural correlates of mentalizing-related computations during strategic interactions in humans". Proceedings of the National Academy of Sciences. 105 (18): 6741–6746. Bibcode:2008PNAS..105.6741H. doi: 10.1073/pnas.0711099105 . ISSN   0027-8424. PMC   2373314 . PMID   18427116.
  12. ↑ Meloso, Debrah; Copic, Jernej; Bossaerts, Peter (2009-03-06). "Promoting Intellectual Discovery: Patents Versus Markets". Science. 323 (5919): 1335–1339. Bibcode:2009Sci...323.1335M. doi:10.1126/science.1158624. ISSN   0036-8075. PMID   19265019. S2CID   26498821.
  13. ↑ Bossaerts, Peter; Murawski, Carsten (December 2017). "Computational Complexity and Human Decision-Making". Trends in Cognitive Sciences. 21 (12): 917–929. doi:10.1016/j.tics.2017.09.005. ISSN   1364-6613. PMID   29149998. S2CID   3591258.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.