2023
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From small-town Canada via Princeton to Monash
Dr Dan McGee.Dr Dan McGee grew up in a small town in Canada not far from Niagara Falls. After a few years of working in industry in Toronto he was accepted into the doctoral program at Princeton University. He landed in Melbourne just over two months ago to become a research fellow in the department of Economics.
Dr McGee’s research spans economic theory, behavioural economics and political economy.
His PhD thesis focuses on applying tools of game theory to try to understand discrimination, prejudices and stereotyping.
“The underlying idea is that although discrimination is morally wrong, it can yield economic benefits for discriminators, so in that sense prejudices and stereotyping are not irrational or accidental. If we understand how this process works then we can change incentives to discourage discrimination,” Dr McGee said.
“For example, one question is not only ‘What do I think these group labels mean?’ but ‘What do I think other people think of me?’ Even when the beliefs are not objectively true, and even when the stereotyped group does not believe the stereotypes to be true, they can still have an effect because the discriminators believe in them and will act on them.
“Then the stereotyped group will respond, anticipating this discriminatory treatment. So we understand how stereotypes can be harmful without having to rely on assuming the stereotyped group is less capable or that they become convinced that they’re less capable than the rest of society. We see this sort of behaviour everywhere, especially where people are competing for desirable rewards, like university admissions or top jobs.”
Why are you interested in this topic?
“I think these topics are of general importance to society, understanding why discrimination and prejudice is so persistent. We should wonder why people hold onto stereotypes in the face of contradictory evidence.
“In our classic understanding, economic incentives should drive out bad information, but what happens when bad information is beneficial to some people? So I bring these interests together with formal modelling tools from game theory to explain why people behave this way.
“It flips the classical explanation, rather than driving out bad information, competition can make it persistent. A lot of these ideas have been floating around in the social sciences, but have not been explored with these economic tools, so I try to formalise these intuitions in a useful framework.”
Why did you come to Monash?
“I learned about the research reputation of the department during my PhD and recognised it as an active and productive environment. It’s ambitious. Also, there’s a notable focus on behavioural economics, there are many people working on economic theory, political economics, and people with interests in group inequality, stereotyping, and segregation, so (when considering) my offers, Monash looked attractive.”
“The position I was offered gave me more freedom to pursue my own research interests, rather than only being someone’s research assistant. As a young academic, it’s important to establish yourself as an expert in an area and have a unique perspective, which so far I feel I can do here.”
What do you hope to achieve during your two years here?
“One of my aspirations during this fellowship is to expand the skills I have as an economist. I’m a theorist by training and work with formal models, but the trend in economics is joining theory and empirical models to show real empirical evidence.”
“It’s no longer good enough to tell a good story about a model, people are asking for proof. And when you present empirical evidence, to explain why, what’s causing your findings? So I’m excited to work on applied theory with the research group and take some of my theory to the data, whether this is evidence using lab or field experiments, or collecting empirical data.”
What do you like to do when you are not working?
“My biggest hobby is cooking. I’m a fairly experimental cook and baker. At the moment I’m cooking a lot of Thai curries so another big plus coming to Melbourne is that the South Asian food here is great.”
“I play ultimate frisbee and I’ve found myself a local league to play in. Melbourne is a lovely city and it’s nice to be connected to a larger city rather than a small town like where Princeton is.”
A year of huge changes for Dr Filip Premik
Dr Filip Premik.In the past few months, so much has changed for Filip Premik. He completed his dissertation, became Dr Filip Premik, married his girlfriend in the US and moved to Melbourne to take up the position of lecturer at Monash Business School’s Department of Economics. Now he’s ready to get to work.
“When you change jobs and move to a new country there is a lot of idle time so now it’s time for me to really push workwise. I’ve talked to several people about collaborations and I hope to make some discoveries,” Dr Premik said.
Dr Premik did both his undergraduate and Master’s degrees at the Warsaw School of Economics in Poland. He worked for the National Bank of Poland for a few years, before an opportunity to pursue a PhD program in the US presented itself.
“I was looking for an adventure so I thought why not? The University of Minnesota is known for macroeconomics but despite working for the Polish Central bank for a few years, my research rarely concentrates around typical macro questions. But there is a small but vibrant Industrial Organisation community in Minnesota and I was very happy to be part of it.”
His research focus is on industrial organisation, applied micro economics and empirical auctions, and his job market paper focused on switching costs in an environment where buyers repeatedly purchased goods that had the same purpose but could be differentiated; specifically, city buses.
Whenever bus companies need to replace buses, they never replace all of them at once because it’s too expensive and risky. The public bus operators are also not able to pick just any bus but need to organise auctions.
These auctions may be organised in a way that allows public bus operators to favour one potential bidder over others. So Dr Premik’s paper tracks the degree of favouritism and shows that it responds to changes in the bus fleets, with the brands that are already in the fleet those that the operators prefer in this discriminating auction. This suggests that there is a “switching cost: associated with a new brand.
Dr Premik uses favouritism to quantify the switching cost and suggests how to change the environment to improve the welfare of the publicly funded companies.
How did you come up with the idea of public city buses?
“Public transport is kind of my hobby! I always liked buses and when I was young, I was chasing buses around Warsaw. At some point I had been on almost every single bus in Warsaw and ridden at least one stop. But then they renewed their fleet and I was too old to keep doing it. When I was looking for a good topic for my PhD dissertation in Minnesota I thought maybe I can use this. And when I managed to get the data for the auctions it just evolved.”
Why did you choose to come to Monash Business School?
“During the job market period I was applying everywhere. It’s hard to know what places are like just from reading university websites. Monash was the only Australian university I knew about beforehand. When I came here for the interview, I really liked it. The research environment is very good. I know it’s far away but for me Minnesota was already far away from Warsaw so this is fine. I’m enjoying it so far.”
“My wife is also an economist and she got a post as an associate professor in Canada. We met in math camp at the start of our PhDs, and even shared the same PhD advisor. A very romantic story! Unfortunately, we got split up in the job market, but we thought we needed to give it a chance. I hope she will one day come here as there are quite a few universities to choose from in Melbourne.”
You’ve only been here for about two months but what do you make of Melbourne so far?
“Compared to Minneapolis, Melbourne is very different and doesn’t share many undesired specifics which I truly wanted to avoid. [FP1] Instead, there’s interesting nature, great food and finally the coffee is also good!”
What do you look forward to in Melbourne - have you been on the buses?
“Yes of course! From my new apartment in Caulfield, I will be able to see the station so maybe I will become a train spotter. I also like to go out and explore so I hope to do some weekend trips and discover the wildlife.”
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Profile: Professor Moshe Hazan
Prof Moshe Hazan.Professor Moshe Hazan is an Israeli macroeconomist who specialises in demographics and gender differences. He will join the Department of Economics at Monash Business School in early September.
“I never planned to leave Tel Aviv but now I am very excited to join Monash and live in Melbourne. It’s a new beginning and new beginnings are always exciting,” he says.
Professor Hazan was born in Israel and completed his PhD at the Hebrew University in Jerusalem. After a postdoc at MIT, he spent another ten years at the Hebrew University before Moving to Tel Aviv University. He also served more than five years as a voting member on the Monetary Policy Committee of the Bank of Israel. Recent political developments in Israel pushed him to look for a job outside of his home country.
“We made a family decision to move. I knew that Monash was hiring. My visit to Monash was great: I felt immediately that this is a place where I can find people to work with, be very happy socially, and contribute from my experience to its further development. I’m very sad to leave the Economics department in Tel Aviv but I think Monash is going to be amazing,” Prof. Hazan says.
His broad research interest is in gender differences and demographics. This area has many consequences for many areas and Prof. Hazan focuses on a lot of topics.
One main area is the consequences of the Second World War on the working lives of women. It is well known that for the first time for the adult generation of women during the war, they were encouraged to seek employment outside of the home as the men went to war.
What is perhaps less well-known is that the generation of women who were still children during the war, met with a very crowded job market after the war. As many older women never left the labour market once the war was over, according to US data. Therefore, the generation after the war found it much harder to find work and many decided to return to the home to raise children.
“It was tough for young women after the war to find work and this lasted up until the end of the 1950s. These results showed the very different consequences for different generations of women. Then, once the war generation retired, even younger generations went out to work and fertility levels were lower but the generation after the war missed out on this,” he says.
Another of Prof. Hazan’s research topics is the consequences of the increasing income inequality on fertility. Previously, highly educated women chose to have fewer children or no children at all. But as services such as nannying, after school care, cleaning became relatively cheaper - along with time-saving innovations such as take away meals - more highly educated women could purchase services and outsource a large part of raising children.
“The traditional negative effect of highly educated women and fertility has disappeared. Instead, income inequality increases the demand for home care services.”
His last main project is about married women’s economic and legal rights historically. More specifically, the impact of the abolishment of coverture on investment portfolios and household decisions on fertility and child education. In common law countries, such as America, Britain and Australia, a married woman’s legal existence was merged with her husband’s.
Any real estate assets still belonged to the woman but were managed by the husband. All financial assets automatically belonged to the husband. Once this legal doctrine was abolished, there were major impacts on society between 1850 and 1920.
“In one paper, we compared data from different states in the U.S. which abolished coverture at different times to see the effects it had on investment portfolios, and state level interest rate and credit, and on structural change away from agriculture.
“We found that rights led to shifts in portfolios towards financial assets, to lower interest rates and higher credit, consistent with a positive supply shock. Finally, it led to higher employment in non-agriculture, and especially so in sectors that were capital intensive.
“In another paper, we look at the consequences for households’ decisions on fertility and education of their kids. We find that gender equality led to reduced fertility and more investment in children’s education.
“The reduction in fertility comes mostly from states with high maternal mortality rates, suggesting that husband and wife disagreed over their willingness to tolerate such risks in having additional children. Importantly, I find it very interesting to see how all these consequences played out in society,” he says.
Prof Moshe Hazan will spend some time on holiday in Europe before flying to Australia in late August. He has not yet decided on what area to live in but hopes to be close to the city to remind him of his bustling hometown of Tel Aviv.
What are you looking forward to in Melbourne?
“I just hope my kids will fit in at school, the rest will be fine. I’m confident Melbourne will be awesome. And I look forward to getting to know a lot of people in the department.”
After your experience at the Central Bank of Israel, will we hear you comment on the Reserve Bank of Australia?
“I will need to spend some time learning about the Australian economy but after that, I’m sure I won’t be able to stop myself.”
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Tributes to Professor Klaus Abbink
Department of Economics staff and students have come together to pay tribute to Professor Klaus Abbink who passed away recently. He is greatly missed.
Professor Lata Gangadharan
Klaus Abbink had an extremely creative mind and he pioneered many strands of research in economics. He designed innovative experimental approaches to understand corruption, conflict and anti-social behaviour, and these experimental paradigms have been used extensively since, and represent many important economic phenomena.
He sometimes looked reserved and stern, but Klaus had a subtle sense of humour and a nice flair for the dramatic. This came through in the remarks he made and also in the titles he chose for his papers: “The pleasure of being nasty”; “How to choose your victim”; “Al Qaeda at the bar: Coordinating ideologues and mercenaries in terrorist organizations”; “Letting the briber go free: An experiment on mitigating harassment bribes”; “Arms Races and conflict”.
His papers were easy to read and were about issues that many connected with. Not surprisingly, he had publications in the American Economic Review, Economic Journal, European Economic Review, several excellent field journals and also in general interest journals such as Nature Communications and Management Science. He was kind and compassionate and very generous with his time. Students and colleagues found his research and his somewhat unconventional ideas inspiring. He encouraged students to test for power and account for heterogeneity analysis long before it was seen to be fashionable. His research influenced many young scholars and will be remembered as an important contribution to understanding the dark side of human beings.
Klaus was at Monash for more than a decade. In his time here, he was the Director of MonLEE, he was a Ph D milestone coordinator, coordinated seminars for the Behavioural, Experimental and Theory group, and taught the third-year course in Experimental Economics. He has left a significant footprint in the department, and we will miss him.
Professor Gaurav Datt
Klaus: A couple of personal reflections
(1) “You want it darker”
Klaus reminded me of the Leonard Cohen song “You want it darker”. He was an investigator of the dark side of humanity. Not that this was all he worked on, but what lies behind the dark side of individual and social behaviour was a recurring theme he returned to in many of his papers. I recall my first exposure to this was a seminar by Klaus in the Economics Department, not long after I came to Monash. The paper he presented, published years later as “How to choose your victim”, introduced the key question by historical reference to the once commonly-accepted Custom of the Sea, which codified cannibalism by shipwrecked sailors using a random draw to select a victim to be killed and eaten, to enhance the chances of other sailors’ survival. Klaus pointed out that the choice of the victim was seldom random. Clearly, not your regular day at a seminar. You can read the paper, but the conclusion was sober: “Our results show that spontaneous formation of mobs is easy, and surprisingly many subjects are inclined to be a part of it, showing little concern for the consequences for the victim. Nominations of victims are frequent even if the gains from it are minimal, and individuals do not hesitate to pick a fellow group member who is already poorer than themselves. In this case, the victim’s relative poverty only serves as a focal point and a coordination device…” I cannot but notice the parallels with cow vigilante lynchings in India.
Klaus was not shy to push his research into the uncomfortable realm that other researchers may be wary of treading. That’s one thing that set him apart.
(2) Simple and direct
I have only one joint paper with him, which in fact is yet to be published. What I remember most about working with him on this paper is his insistence on simplicity and directness, both of the experimental approach for the underlying research, and later, of the writing of the paper itself. I believe there are several other examples of his work of which this is also true. Simplicity and directness was also a feature of Klaus himself. His day-to-day life always seemed pared down to the essentials. Few of us would have visited his apartment, but if you stepped into his office, its sparseness was unmistakable. Likewise, he wasn’t given to social niceties and had no time for political correctness. Some found that awkward on occasion, but the straightforward candour had a very refreshing element to it. He was a bit of a recluse, so it was difficult to get to know him at a personal level. But if he was a hermit, he was a kind one. Klaus, we will remember you and we will miss you.
Professor Andreas Leibbrandt
The saying is that anonymity can reveal one’s true self. My first contact with Klaus was when he refereed one of my papers (he never told me or even signalled it; he would have never done that, but I knew). He wrote one of the nicest referee reports that I have ever received: “This is a very good paper, I recommend publication (…) The study does NOT need additional treatments or sessions.
I immediately liked Klaus. He was always a vocal advocate for simplicity, clarity, and efficiency. While this may not come as a complete surprise given his upbringing in Germany and training under Reinhard Selten, he rigorously applied these principles to his experimental research and personal life. He moved to Hughesdale because it is “equal distance to Caulfield and Clayton”, he did not unpack his boxes in his office because he (rightfully) believed that he will have to move his office, and he did not say ‘Hi’ or ‘See you’ when meeting.
One day, I thought I got him when he showed up with his new car, a swanky Mercedes 500SL. However, again it made perfect sense because ‘It is the only car where I can stretch my long legs’.
Klaus was a great supervisor and teacher for his students. He was very patient and provided consistent care and equal effort for everyone that crossed his path. Students and colleagues learnt a lot from him and how simplicity, clarity, and efficiency are key drivers for generating knowledge and staying on track. Struggling or thriving, disadvantaged or privileged, he helped them all. While it may have sometimes looked like he did not need others to care for him, he really appreciated small gestures. I believe he only extended the rental contract in his first apartment because the porter always handed him a printout of the weather forecast (which he often showed me and we both made fun of a typical Melbourne forecast with sun, clouds, rain and a wide temperature range).
He was not an idealist. In a period in which almost all researchers in his field worked on social preferences, hoping to uncover the good in us, he was one of the pioneers to study the dark side of human motivation. He believed that to give the good a chance, we need to learn to control the bad and if possible make this a sound equilibrium strategy. He was deeply respected by his peers. Everything he said had real substance.
One of the first times I met him, we watched a rugby game together in a bar in the Docklands. I recall how he drew the attention of many (taller) women and how small I appeared by his side. But I never felt small by his side. I doubt that he has made anyone feel small.
The last time I met him, our conversation drifted quickly to topics like the inherent dangers in capitalism and socialism. In addition to his principles and desire for simplicity, clarity, and efficiency, he was fascinated by essential questions. I hope that he can ponder more on these wherever he is while cruising in his Mercedes.
Klaus, thank you for being a part in our journey. We miss you. See you in a different world.
Professor Ranjan Ray
I was shocked and deeply saddened to hear the news of the passing away of our colleague, Klaus Abbink. Having never worked with Klaus, I was an ‘outsider’ to the group of colleagues who co-authored and interacted with him quite closely. Nevertheless, from our conversations and having seen him participate in departmental events such as meetings and milestone seminars by our PhD students, Klaus left a lasting impression on me. He was a very helpful guide to doctoral students and I heard many of them express their appreciation for his mentoring role.
There are two particular events that I will always remember about Klaus. The first was his trip to India, I think to the city of Hyderabad, that he made in connection with his research on bribery. When we met after his return to Melbourne, I was quite struck by his perceptive remarks on India and Indian society. The second was a seminar that was organised at short notice by the CDES in Monash. A junior scholar working in Ashoka University in Delhi once wrote to me that she is visiting a relative in Melbourne and wondered if a seminar could be organised at short notice. I asked Gaurav and he promptly organised a CDES seminar by this scholar. She was not a ‘prominent speaker’ nor someone with an ‘outstanding research record’ but her topic, on the dietary pattern of India’s lower castes, seemed quite interesting. Only three or four people turned up (besides Gaurav and myself) and that included Klaus. He was the last person who I expected will turn up since I didn’t associate his research interests with development. Not only did Klaus attend the sparsely attended talk but his questions and comments were some of the most insightful and helpful.
Klaus spoke little, especially in meetings, but when he did speak his comments could be quite decisive. When Klaus joined the department with Stephen King as the Dean, we were on an upward trajectory in our research standing but hadn’t quite established ourselves. Klaus played a big part in Monash Economics having the high ranking internationally that it enjoys today. In the passing away of Klaus, we have lost a valuable colleague. If his life was not cut sort, he could have contributed so much more to Monash and the wider academic community beyond Monash. My regret is that I didn’t make greater effort to know Klaus more closely. If I did, I could have learnt so much more from him. May his soul rest in peace.
Associate Professor Vai-Lam Mui
Klaus' Silent Smiles
I could not recall exactly when this happened. But toward the end of Klaus' job visit to Monash more than a decade ago, I and several colleagues took him to the Faculty club for lunch. At that time, the University already made him an offer and my recollection was that he already indicated that he would accept. When walking with him, I teased him: "Your appointment increases the average height of the Economics Department, both figuratively, and literally." He did not say anything, but offered me a mild, silent smile.
In one of my visits to him in the hospital late October last year, I asked Klaus whether I could bring him any of his favourite food that might cheer him up, and he said: “gummy bears.” Fortunately, Woolworths carried the "original since 1922" Haribo German gummy bears. When I went back to give him the gummy bears the next day, he gave me a silent, but big, smile. Digging through my emails, according to an update email sent out by Sascha less than 2 hours after I left Klaus the gummy bears, "part of the gold bear sweetie bag is already empty."
I still found the sad news surreal, but when I thought of Klaus, I tried to recall his silent smiles, in the above, and other occasions throughout the years.
Dr Ben Grodeck
I am deeply saddened by the news of Klaus' passing. Klaus played a pivotal role in my development as an economist (and a thinker in general) throughout my PhD journey. He was always happy to give me feedback on my weird and wacky ideas, even encouraging them. His perspective on experimental design was invaluable. I was also fortunate to TA for Klaus' experimental economics class (twice). He gave me the freedom to add my own personal touch to the tutorials, and I think we made a fantastic team.
Klaus was the chair of my dissertation committee. I'll always remember his comments after each of my milestones, which left me with a glow and the motivation to finish my PhD. I was truly lucky to have him as a mentor.