Research Center

Global Cooperation and Social Cohesion

In the course of the past century, humanity has confronted a multitude of seemingly intractable global problems. These include economic challenges, such as financial crises and persistent poverty, but also social, environmental, and political issues. Market failure is the explanation offered by mainstream economics for the persistence of many global problems. Accordingly, economists commonly advocate policies that offer individuals full compensation for the benefits and costs they generatethrough taxes and subsidies, redefinition of property rights, and various laws and regulations. The invisible hand, along with the associated explanation for market failures, presupposes that people are purely self-interested, have stable preferences, and behave perfectly rationally. The view underlying this research center is that the conception of human motivation and decision making in traditional economics is outdated and inconsistent with current evidence from other disciplines, such as neuroscience, cognitive science, cognitive psychology, developmental psychology, behavioral economics, and other fields. For example, people are not exclusively self-interested since they have capacity for fairness, empathy, compassion, and caring. They are not exclusively rational because most of their behavior is substantially motivated by emotions and heuristics. They are not exclusively individualistic since their preferences are significantly determined by the social groups to which they belong. This research center analyzes the impact of social interaction and behavioral responses of individual agents on the emergence of global economic problems and considers the design of possible solutions in view of these results.



Christian Kaernbach
Catharina Probst
Prof. Dr. Thilo van Eimeren