Professor Eyal Winter

Position

Professor Eyal Winter

Professor of Economics

Key areas of research

Applied Game Theory, Behavioral Economics, Experimental Economics,

Contract Theory, the role of Emotions in Decision Making

 

What attracted you to Economics as a subject and where did you begin your studies and early research work?

People refer to Economics as the science of incentive.  Incentives are present in almost all walks of life, especially in our relationships with other people, and I’m fascinated by how these interactions evolve through the presence of these incentives.

I graduated from the Hebrew University of Jerusalem in Mathematics, Statistics and Economics before going on to study my doctorate in Game Theory.

Were you inspired to build a career in Economics by anything in particular?

I started my career due to a strong interest in Game Theory, but soon transitioned my focus to Behavioural Economics, due to realising that although Game Theory explores the strategic interactions between individuals, it portrays people as being homo-economicus i.e. super-rational, purely logical decision makers which is not necessarily always the case. People are also involved in making irrational decisions; sometimes they act emotionally so it is important to understand how our emotions affect our decision making, particularly in Economics.

What was your initial area of research and why were you particularly interested in this area?

My work has led to collaborations across a number of disciplines; Politics, Psychology and International Relations and, as a result of this research, my book entitled ‘Feeling Smart: Why are emotions more rational than you think?’ will appear early next year. This book explains how emotions help us to manage our businesses’ much better than if we were to take the logical ‘Mr Spock’ approach. We need to understand how they facilitate much of our decision making.

These tactics have long been manipulated by marketing companies but nowadays there is a lot of interest from governments exploring Behavioural Economics to induce people to behave in a more responsible way

I also recently presented to the Behavioural Insights Group in the Cabinet Office which was set up by David Cameron in 2010 to improve public policy and services within the UK. By understanding the psychology of economic behaviour, benevolent government can use it in order to influence the behaviour of the individual.  For example, in two adjacent Scandinavian countries there have been different performances in terms of the propensity of organ donation. In one of the countries, the default option on your driving licence is that your organs are donated and you tick the box if you do not want this to happen whereas in the other country the opposite occurs. There is a much higher amount of organ donors in the first country as opposed to the second for this reason.  Faced with a choice, we are more likely than not to go with a default option.  The Behavioural Insights Team is looking at how to apply this, and other related insights, to other areas of decision making policy.

What was/is your latest research and how if possible does it apply to everyday life?

Working alongside psychologists, I recently published a paper in Physiological Science looking at how we recognise the emotional states of other people and investigating the issue of trust, specifically if it can distort our ability to correctly recognise from facial expressions and social cues, the behavioural intentions of others.  My work involves mathematical modelling but also observational experiments in the lab at the Department of Economics.

In other recent research , I have used the game show  ‘Split or Steal’ which works on the concept of two participants accumulating a large sum of money throughout a trivia game and then completing a simple exercise in which both can decide whether to split or steal the money won. If both choose to split, the money is divided equally between them, but if one decides to steal and the other to split, the one who chose to steal gets the full amount of money and the other gets nothing. If both chose to steal then neither gets any money at all.

The financial incentive is to say steal – no matter what the other person is saying they are always better stealing than with split.

By administering the trust-inducing hormone oxytocin to a group of volunteers and a placebo to another, they were made to predict what the outcome of a Split or Steal situation would be. Those administered with the oxytocin were discovered to exert less effort in the task in comparison to those containing the placebo and were much worse at predicting the outcome.

To be able to predict other people’s behaviour or to be able to recognise deception you need to have a certain degree of suspicion in you towards other people. But the hormone oxytocin, which is known to be responsible for the initial bonding between the mother and her baby, generates a mental state of trust and to some extent harms our vigilance to social cues.

What attracted you to the University of Leicester?

My career has taken me across the globe, having worked in America, Europe and most recently back in Jerusalem, I joined the Economics Department at the University of Leicester in January 2014, attracted by its diversity, youth and history of research.

I knew it was a very strong department. I knew it was a department which put huge emphasis on quality research at international standards.

If you were asked by a prospective student wondering why study economics what would your answer be?

When Nobel Laureate James Tobin was asked to summarize Economics in one word he said "Incentives". Economics is about incentives.  Not only about financial incentives but also, about social and moral ones. Incentives determine our behavior as shoppers, in our workplace, in our love life and in almost any other corner of life.

 

For further information on Eyal, including research papers, please click here.

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