On the one hand, economists rely on hard numbers: GDP, growth rate, exchange rates. On the other hand, their explanations often include soft factors: executive confidence in the economy, consumer sentiment, and investor expectations. The hard numbers are objective, yet soft factors are subjective and depend on each individual. Economists increasingly recognize the need to study these subjective factors. In the first part of this lecture, Baillon will emphasize the key role of subjective truths in modern economics. Baillon will then show that even though they are subjective, the soft factors can still be objectively studied and explain how to incentivize people to reveal their expectations about future events but also their confidence in their expectations. Finally, professor Baillon will demonstrate how to make people reveal truths that are completely unverifiable.
Since October 2014, Aurélien Baillon (1980) has been endowed professor of economics of uncertainty at the Erasmus School of Economics (EUR). He joined the ESE in 2007 after receiving a PhD in economics from Arts et Metiers Paristech in France. His research interests include behavioral economics, experimental economics, learning, risk and uncertainty. Aurélien published, among others, in the American Economic Journal (2011, twice), Journal of Risk and Uncertainty and Games and Behavior. His most recent publication is in the American Economic Journal: Microeconomics with TI fellow Han Bleichrodt.
In March 2015, he was awarded a Starting Grant of € 1.5 million from the European Research Council (ERC) for his research project “Unverifiable Truths”. In 2014, Aurélien received a Vidi grant of € 800.000 by NWO (Netherlands Organisation for Scientific Research) for his research project ‘Beyond rational expectations’, 2014-2019. He received an NWO Veni grant (€ 250.000) in 2010. Learn more about Aurélien on his personal website.