November
From small-town Canada via Princeton to Monash
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
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.”