The ESRC Centre for Economic Learning and Social Evolution (ELSE) is an interdisciplinary research centre based at University College London devoted to the study of those areas of human behaviour in which economics and psychology come together. The Centre was founded by Ken Binmore in 1995, and has recently been given a further five years of core funding by the ESRC. Psychologists and economists are concerned with substantially the same questions about behaviour: What motivates people? How do motivations guide our actions? How do we learn about new environments? How do we store and use information? And how do these issues affect individual and collective outcomes? Over the life of the Centre, we hope to develop a common view of important aspects of human economic behaviour. In addition, our research sometimes uses mathematical methods, and researchers from the UCL mathematics department form an important part of the Centre's work.
Our research is grouped into three themes:
Industrial organization: We make a distinctive contribution to this mature field by drawing on insights from psychology, marketing, and models of bounded rationality in our analysis. Applications include the consumer choice of highly complex items (supermarkets, financial products), sales techniques, the apparently excessive simplicity of some retail strategies, and the effect of over-confidence and other behavioural biases on market outcomes.
Individual decision making: Combining the theoretical and empirical resources of economics, cognitive psychology and evolutionary psychology, we investigate whether recent research on bounded rationality has underestimated the degree to which agents can achieve optimality in decision-making. Our work focuses on the ways in which learning, imitation and advice enhance performance, and we re-examine prominent, but potentially misleading, evolutionary models of economic decision-making.
Interactive decision making: We investigate how people deal with strategic situations, both by conducting laboratory and field experiments, and by mathematical modelling. We aim to advance our understanding of learning behaviour by eschewing common simplifying assumptions, and to study how people may employ simple "heuristics" in interactive decision problems.