The Behaviour, Incentives and Contracts (BIC) programme covers the broad field of microeconomics: the analysis of behaviour, both individual and strategic, theoretical and empirical; the design of mechanisms, both private and public; the analysis of information and incentives. Although this may sound abstract, there is a wide range of application, from marriage and divorce to bankruptcy law; from Public Private Partnerships to Treasury Bill auctions; from the evolution of cooperation to the nature of contracts; from monetary theory to constitutional design; from labour relations to investment activity. Many of these issues are directly policy relevant in their own right. Equally important, because microeconomic analysis permeates all economic thinking, the other two programmes, Macroeconomics, Financial Linkages and the Regions and Work and Well-being, both directly benefit from the strong core group of researchers in this field.
Foundations
The programme builds on the existing core strength in economic theory, based primarily at the University of Edinburgh, combined with the more geographically dispersed strength in applied and empirical microeconomic analysis at Heriot-Watt University and elsewhere.
User Engagement
The ubiquity of issues to do with the economics of information, incentives and contracts ensures that the programme has the potential to generate considerable interest from, and interaction with, a wide range of user groups extending well beyond the usual academic networks. For example: private institutions, especially financial, are very interested in the work on contracting; government, at all levels, is of course deeply concerned with incentive questions, competition and regulation, and the public/private interface; central bankers around the world, and international organisations such as the Bank for International Settlements in Basel, are keen to know more about our work on money and trust. It appears that there is no shortage of demand for this kind of research. Bringing together demand and supply involves effective communication and interaction. As noted elsewhere, some programme activities will be explicitly designed with this in mind, e.g. the inclusion of policy sessions in mini-conferences; master classes; and public lectures. Regular non-technical summaries of the programme’s research outputs and activities will also be provided (in conjunction with an email alert service). The more applied focus of the majority of planned new appointments will greatly enhance this effective communication and interaction.