SPP 1859:  Experience and Expectation: Historical Foundations of Economic Behaviour

• Subject Area: Social and Behavioural Sciences
• Term: from 2015 to 2024
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 255716236

Economic decision-making takes place in a complex environment under considerable uncertainty. To reduce this uncertainty economic actors rely on expectations about the future development of key economic variables. The central purpose of this Priority Programme is to investigate how these expectations are formed. Underlying the programme is the basic hypothesis that the formation of expectation is not a uniform, standardised and time-invariant process but depends on specific historical contexts.The Priority Programme aims at a close integration of historical and economic methods. Three questions shall dominate our research: First, how does historical experience shape expectations of the future? Second, do expectations change across space and/or time because of differences in culture, institutions, or technology? Third, how do expectations change in the short-term due to economic crises or exogenous shocks? To answer these questions, we invite scholars from behavioural science, law, psychology and sociology to participate. The common goal of this interdisciplinary approach is the study of historical processes of expectation formation.A central task of this programme will be to identify new historical sources which will help us reconstruct empirically processes of expectation formation. For example, diaries, letters and other personal records will provide insights into how people interpret certain economic situations and how they form their expectations. Private household books and consumption surveys allow conclusions on the timing and causes of actual changes in economic behaviour. Comparable sources such as minutes of board meetings or business correspondence can also be found for companies, central banks, research institutes, or governments. Media analysis promises to provide yet unmined information about how public narratives have influenced individual expectations in the past. It might be also possible to analyse actual economic behaviour in order to understand the underlying expectations. For example, the changing composition of corporate patent portfolios provides information about which technological development paths managers and researchers anticipated for the future.

• DFG Programme: Priority Programmes
• International Connection: Switzerland, USA

Projects

• Belief Foundations and Waves of Optimism and Pessimism: Response to Historical Trends, Disaster Risk and Personal Experiences (Applicant Faia, Ph.D., Ester )
• Competition as the subject of forecasts. Forming expectations of the European Commission as a supranational regulatory authority for merger control in transnational markets (1958-2003) (Applicant Pahlow, Louis )
• Coordination Funds (Applicant Nützenadel, Alexander )
• Country Insurance across 200 Years: the Role of Experiences and Expectations (Applicant Trebesch, Ph.D., Christoph )
• Creating Expectations (Applicants Kriwoluzky, Alexander ;  Schularick, Moritz )
• Determinants and effects of business expectations in Germany after 1980 (Applicants Enders, Zeno ;  Müller, Gernot )
• Devaluation of Experience? Expectation Formation in Small and Medium Sized Enterprises in the Period of Economic Structural Change since the 1970s (Applicant Plumpe, Werner )
• Expectation and Experience. A History of Economic Future (Synthesis Project) (Applicants Nützenadel, Alexander ;  Streb, Jochen )
• Expectation and Forecast. Business Cycle Research in the United States, Germany and the Netherlands, 1920-1960 (Applicant Nützenadel, Alexander )
• Expectations and experience: What governed investment in banking stocks (1897 to 1931)? (Applicant Lehmann-Hasemeyer, Ph.D., Sibylle )
• Expecting Innovation: experiences and expectations as foundation of research strategies in the German iron and steel industry during the 20th century (Applicant Schneider, Michael )
• Expecting Limits and Limiting Expectations – Economic Expertise, Environmental Policy and Consumption, 1970-2000 (Applicant Graf, Rüdiger )
• Exploring the experience-expectation nexus in macroeconomic forecasting using computational text analysis and machine learning (renewal application to "macroeconomic forecasting in great crisis") (Applicants Döpke, Jörg ;  Fritsche, Ulrich ;  Pierdzioch, Christian )
• Great Expectations? Germany's Recovery from the Great Depression, 1932-1936 (Applicants Jung, Philip ;  Kriwoluzky, Alexander ;  Schularick, Moritz )
• Heterogeneity in macroeconomic expectations: the role of individual historical experiences, local conditions, and socio-economic characteristics (Applicants Conrad, Christian ;  Dovern, Jonas ;  Krüger, Fabian )
• Limited by Myopia? Economic Uncertainty and the International Regulation of Sovereign Debt in Times of Crisis (1970-1997) (Applicant Rischbieter, Julia Laura )
• Managing Expectations. Consultancy and Corporate Decision-Making in Germany after 1965 (Applicant Nützenadel, Alexander )
• More than a Feeling: Media Sentiment as a Mirror of Investors’ Expectations at the Berlin Stock Exchange, 1872-1930 (Applicants Burghardt, Manuel ;  Spoerer, Mark )
• Municipalities and their Expectations on Pay-Offs of Swap Deals (Applicant Trampusch, Christine )
• Origins and Consequences of Regional Identity. Evidence from Historical Differences in Political Instability and Fragmentation among German States (Applicant Wahl, Fabian )
• Past Energy Futures. Energy Projections and Decision-Making in the Electricity Sector since 1945 (Applicant Thomes, Paul )
• Personal Experience and Savings Behaviour (Applicants Lehmann-Hasemeyer, Ph.D., Sibylle ;  Streb, Jochen )
• Professional Prognosticators? Market Research and the Formation of Business Expectations in West Germany and the United States after 1945 (Applicant Köhler, Ingo )
• Sky-high expectations: how politics, crisis and knowledge transfer shaped the multinational airline Air Afrique 1961-1990 (Applicant Nützenadel, Alexander )
• Storage for subsistence. Regensburg´s hospital granary (17th - 19th centuries) (Applicant Spoerer, Mark )
• The Anticipation of Expectations – Financial Institutions and the observation of saving behaviour in West Germany and the United States of America (Applicant Hesse, Jan-Otmar )
• The Implications of Experience and Expectations for Demographic Decisions: Germany, 1871-2000 (Applicant Streb, Jochen )
• “The industry of the world’s optimists.” Tourism as a development strategy in Eastern Africa (1950s-early 1990s) (Applicant Lerp, Dörte )
• The Transformation of Money. A Transatlantic History of 'Money Illusion' during the Gold Standard Era, 1870s-1920s (Applicant Teupe, Sebastian )

• Spokesperson: Professor Dr. Alexander Nützenadel