DFG Research Unit - "Design & Behavior"
DFG Research Unit - "Relativity in Social Cognition"
Key Profile Area II of the University of Cologne
People respond to incentives. They do not always do so in a rational or selfish way. Still, economic and social behavior follows systematic and predictable patterns. Devising descriptively relevant theories of 'real' economic behavior (as an alternative to the widely used homo oeconomicus model) is one of the most important and promising challenges in economics and neighboring disciplines. Our research in this area focuses on investigating and modeling bounded rationality (including "economic cognition") and social preferences.
A good understanding of how people respond to incentives opens the door to market and strategy design as an engineering science. See http://economicdesign.uni-koeln.de for our research in behavioral economic engineering.