Research Summary

While large parts of both macro and microeconomics are based on the presumption of a single representative agent, innovative research in both areas has increasingly come to acknowledge the importance of heterogeneity in human behavior for economic outcomes. Such heterogeneity can take many forms: cross-cultural differences in preferences, differing attitudes towards risk, fairness and reciprocity or persistent heterogeneity in income, wealth and abilities. Heterogeneity in household or country portfolio choices, the incomplete sharing of household- or country-specific risks in financial markets or the role of different cultural attitudes towards work for long-term growth experiences are further important examples.
In the ProDoc we draw together a wide range of different perspectives on heterogeneity, ranging from behavioral approaches to more classic ways of modeling heterogeneity. A common theme of the research in the ProDoc will be to explore the implications of heterogeneity in human behavior for aggregate or macroeconomic outcomes broadly defined.
The ProDoc’s principal investigators are Proff Ernst Fehr, Reto Foellmi. Mathias Hoffmann, Ulrich Woitek and Fabrizio Zilibotti. Based in Zurich and Bern (Foellmi), this group of researchers is uniquely placed for a doctoral school dedicated to these topics. University of Zurich (UZH) is home to some of the leading groups worldwide in behavioral and political economics. UZH researchers have also made leading contributions on the link between income distribution and macroeconomics and on the role of cultural heterogeneity for long-term economic growth. They were also among of the first to explore the role of preferences for reciprocity and fairness for aggregate outcomes. Other thematic strengths of the faculty include cultural economics, economic history, international economics, labor economics, pension economics, public finance and regulatory economics, all of which emphasize the role of heterogeneous behavior in various ways. In many of these subareas there is critical mass of researchers. For example, UZH alone has 5 groups working on various aspects of macroeconomics.