Humboldt-Universität zu Berlin - School of Business and Economics

We live in a world full of uncertainty. Uncertainty about the future influences present decisions for individuals, businesses, institutions and nations. Financial market fluctuations threaten household wealth, real estate, and the value of bonds and shares. Unforeseen technical innovations destroy the market position of well-established firms. Business cycle fluctuations endanger employment. Economic policy is constantly challenged by growth risks. These uncertainties exemplify a phenomenon known as economic risk . It is ubiquitous in economic decisions and contexts. Consequently, a precise understanding of economic risk is a prerequisite for improving the economic prospects of individuals, firms or entire nations.

The aim of the Collaborative Research Centre is to answer the general research questions: What are the essential economic risks and which consequences do they have? Which individual risks are households and firms exposed to? Additionally, the question of containment, distribution and insurance of these risks is a subject of the Collaborative Research Centre. The participating scientists bring together insights from a number of different research areas such as economics, business administration, statistics and econometrics, as well as applied mathematics. Using empirical, experimental and theoretical methods, the researchers analyse the main economic risks, how they can be quantified and evaluated. Further examples of problems are the limits to insurability and the following questions: What role do financial markets play in the allocation of risks? What are the consequences of risks affecting the economy as a whole? How can macroeconomic risks be managed by monetary and fiscal policy? As a novel infrastructure, the Financial and Economic Data Center (FEDC) provides data, central computing capacity, software, as well as a portal for numerical algorithms and research results for the participating and visiting researchers.

Funding period: 2005-2016

Participating members of the School: Wolfgang Härdle (speaker), Tim Adam, Ralf Brüggemann, Michael C. Burda, Ingolf Dittmann, Joachim Gassen, Lutz Hildebrandt, Brenda López Cabrera, Bartosz Mackowiak, Thomas Post, Alexandra Spitz-Oener, Vladimir Spokoiny, Alex Stomper, Roland Strausz, Weining Wang, Nikolaus Wolf

Further participating institutions: Freie Universität Berlin, Technische Universität Berlin, Universität Potsdam, German Institute for Economic Research (DIW), Weierstrass Institute for Applied Analysis and Stochastics (WIAS), Berlin Social Science Center (WZB)

Further information: Website

One of the basic requirements to understanding economic processes is a strong relationship between empirically oriented data analysis and economic modelling. Economic theory provides ideas and measurable hypotheses, quantitative analysis is used to develop tools for empirical verification, and applied mathematics helps in theevaluation of the results and development of new methods.Many economic problems have already been extensively investigatedempirically under constant conditions. On the other hand, it isrelatively little known about the mechanisms for changing economicstructures. The study of economic processes over time necessitates being both specific and planning long-term models. Therefore, more and more simulated and artificial economic situations which can be experimentally checked, are needed. Using computers we can use methods such as bootstrapping to gain more precise information on current economic dynamics or to simulate future economic situations. Mathematical methods help to bridge the gap to real economic situations. The main aim of the collaborative research centre is to investigate the dynamics of economic processes in connection with economic theory development using a quantitative-empirical approach.

Funding period: 1994-2003

Participating members of the School: Wolfgang Härdle (speaker), Michael C. Burda, Lutz Hildebrandt, Joachim Schwalbach, Vladimir Spokoiny, Richard Stehle, Elmar Wolfstetter

Economic development in the last decade of the 20th century is characterised by two phenomena: the revolution in the information and communication technologies and the rapid internationalisation of markets (globalisation).

The impacts of these are studied within three project divisions.

Project Division A "Strategic Interdependence and Design of Institutions" covers the fundamental theoretical part of our research approach. Research focuses on contract and competition structures such as auctions and tournaments that are intensely used, for instance, in electronic commerce.

In Project Division B "Corporate Governance" organisational and decision problems in enterprises and between shareholders and management are investigated.

Research in Project Division C "Market Organisation" asks first which market structures follow from the behaviour of the market participants within the new environments, and second, how the government should help shaping these environments towards increasing the efficiency of allocation decisions.

The core instruments used in the research are game and contract theories as well as mechanism design with applications in industrial, information and institutional economics, but also capital market theory. Empirical analyses will be delivered within controlled experiments, structured case studies and estimates of structural econometric models.

The research topics of the Transregional Collaborative Research Centre are not only in the focus of international attention in the scientific arena. The business and political scenes are also very interested in the research results; for instance in the results of research on auctions, or on the effects of e-commerce on the industrial and regional as well as the international economic structure.

Funding period: 2004-2015

Participating members of the School: Tim Adam, Ulrich Kamecke, Lars-Hendrik Röller, Roland Strausz, Elmar Wolfstetter

Further participating institutions: Ludwig-Maximilians-Universität Munich (speaker), Freie Universität Berlin, Rheinische Friedrich-Wilhelms-Universität Bonn, Universität Mannheim, Max Planck Institute for Tax Law and Public Finance Munich, Max Planck Institute for Research on Collective Goods Bonn

Further information: Website

Quantitative economics often faces the challenge of modelling high dimensional, unstructured data and nonstationary time series. The standard tool sets that are based on a low parameter dimension and a growing number of observations are not applicable and one needs to use adaptive techniques and local stationary models to match data phenomena. The IRTG investigates how high complexity and dimensionality can be downscaled to lower dimensional structures. The dynamic of which can be understood via dimension reduced statistical modelling. The key goals is the development of new statistical and econometric theory to create a broader field of analysis supported by e.g. time varying machine learning or network techniques. The computational methods will be provided on a free accessible platform that allows for transparent and reproducible scientific research. Areas of application include neuroscience, high frequency finance, time varying clustering of unstructured data, dynamic topic modelling, sentiment reactions and herding effects. For realistic adoption of these new tools one needs to eliminate, or at least relax, Gaussianity assumptions via various types of regularizations. A new estimation theory based on functional structural sparsity will allow a fair balance between model interpretability, distributional flexibility and structural complexity. A typical example is time varying Lasso with predictable and economically interpretable sparseness parameter. A graph based view on time series data is necessary if one considers e.g. the dynamics of social or systemic risk networks. Here the IRTG contributes via research on combinatorial inference on e.g. which nodes are central and which nodes are infectious in the sense of creating similar sentiments in a financial context. Such analysis is also demanded in the rapidly growing crypto currency system, where one likes to identify market movers and dynamic survival rates of crypto currencies. To achieve these research goals the qualification programme requires a multi facet course programme that involves solid mathematical and statistical training in combination with modern machine learning skills. Short courses augmenting knowledge on current topics in dimension reduction, dynamic sparseness and networks are held by visiting researchers.

Funding period: 2013-2023

Participating members of the School: Wolfgang Härdle (speaker), Michael Burda, Stefan Lessmann

Further participating institutions: Xiamen University, China

Further information: Website

The Research Training Group focusses on the interdependences in the regulation of markets with the aim of arriving at a holistic view and awareness of regulatory policies. More specifically, the project studies the interdependence of regulation in and between the three classical market segments: (1) product markets, (2) labour markets, (3) financial markets. It focusses not only on the feedback effects of regulation within and across these market segments but also on feedback effects of unregulated product characteristics on regulated ones. Moreover, the Research Training Group intends to study the interdependence of different regulatory measures in order to determine in how far these measures reinforce or offset each other.

The Research Training Group offers high-level doctoral training according to the best international standards. In order to raise student's awareness in the interdependences in regulation, the programme offers intensive supervision by at least two supervisors from the different fields. To facilitate the recruitment of foreign students, all courses are taught in English. The Research Training Group includes an orientation stage with the basic courses in micro economics, macro economics and econometrics and an advanced stage with specialised and research oriented courses. These courses aim at providing the students with the best foundation for doing independent research.

A key feature of the programme is the joint workshop in which participating students present their research and practitioners outside of narrow academia give presentations about their views of regulation. From these more practical presentations, the programme's participants can learn about the fundamental questions that matter most to practitioners and discuss possible approaches how to address these questions from an academic point of view. Summer schools and a visiting scholar programme complement the training programme.

Upon entering the Research Training Group, students receive intensive supervision by a mentoring programme of young researchers and two PhD supervisors. The aim of supervision is to prepare students for independent research as quickly as possible. Students leave the programme after completing a dissertation consisting of three research papers. The programme expects students to present their work in local workshops and international conferences and to disseminate it initially in the programme's working paper series and ultimately in international, peer-reviewed journals. The programme provides financial assistance to achieve these goals. The programme's placement director and a career-platform support its graduates in their next career step. It offers financial support to its top students for attending the international academic job markets.

Funding period: 2011-2016

Participating members of the School: Roland Strausz (speaker), Tim Adam, Michael C. Burda, Joachim Gassen, Alexandra Spitz-Oener, Lutz Weinke

Further participating institutions: Freie Universität Berlin, Technische Universität Berlin, European School of Management and Technology (ESMT), German Institute for Economic Research (DIW), Berlin Social Science Center (WZB)

Further information: Website

The availability of Internet-based electronic services and the development of corresponding new markets is a fact. Parallel to this growing consolidation in practice, the scientific community has identified a variety of problem areas.These problem areas have a middle- or long-term perspective and aretherefore amenable to scientific research even in an application context that is characterised by very short development cycles. Many of these problem areas are inherently interdisciplinary, such as:-- development of suitable query languages and more sophisticated search engines;-- Internet-based integration of legacy information systems using suitable middleware;-- adaptation of database techniques for transaction management and fault tolerance to the loosely coupled information system architectures that are typical for this domain;-- development of efficient market and payment mechanisms.By founding the Berlin-Brandenburg research training group, the DFG started one of the first German research centres in this area. The college is an interdisciplinary institution, bringing together faculty from computer science and business administration. There is a strong practical orientation, due to numerous contacts between participating faculty, local industry, and various government agencies. By involving faculty from all three Berlin universities as well as the Brandenburg Technical University in Cottbus, the college also has a regional integration function.

Funding period: 1996-2005

Participating members of the School: Oliver Günther (speaker)

A major reason for the success of Anglo-Saxon universities is their targeted training of young scien-tists in clearly structured and intensively led postgraduate study programmes. The Berlin-based Research Training Group "Applied Microeconomics" takes inspiration from these models. It pro-motes a small number of particularly qualified doctoral candidates. The Research Training Group begins with basic theoretical training in the subjects of microeconomics, statistics and economet-rics, finance and industrial organisation. This is followed by special courses in addition to the core subjects, mainly from the areas of the labour market, social policy, public choice, financial markets, industrial organisation, as well as intensive dissertation support. Scientists from the Charité medical faculty and of the Max Delbrück Center for Molecular Medicine in the Buch district of Berlin are involved in this Research Training Group.

Funding period: 1995-2002

Participating members of the School: Ulrich Kamecke (speaker), Charles Beat Blankart, Michael C. Burda, Wolfgang Härdle, Lars-Henrik Röller, Joachim Schwalbach, Bengt-Arne Wickström

The recent severe recession has led to a reassessment of labour market policies across many industrialised countries. Technological change and changes in the division of labour, trade liberalisation, increasing labour mobility, demographic changes, low fertility rates, changes in labour force participation as well as labour market reforms have reshaped the way economies and their labour markets operate. The central purpose of the Priority Programme is to develop a deeper understanding of the challenges facing labour markets in Germany in particular and throughout Europe in a global context.

The Priority Programme addresses pertinent research issues on the link between trade, technology and demographic changes as they affect wages and employment. In an international perspective, the Priority Programme will analyse empirically the way the German labour market works with particular emphasis on labour market flows, on the role of institutions and policies, on the explanation for the increase in inequality, on demographic changes and on the links to education and important non-economic motives and outcomes.

An understanding of these issues is key for policies relating to skills development of the population at all ages, family issues and gender in the labour market, demography, child development, health, social policies, crime, immigration, as well as the macroeconomic performance of the labour market. The challenges posed by competition and potential immigration combined with demographic developments will not only affect various labour market groups in different ways, but also force human resource management practices to adapt.

The Priority Programme will take an interdisciplinary approach linking economic research with research in sociology and in human resource management and organisation in business administration. Building on theoretical contributions, the Priority Programme mainly involves empirical research making use of large micro-data sets with an emphasis on a comprehensive descriptive analysis or on estimating causal effects in the treatment-control group paradigm.

A particular focus will be given to projects that investigate labour market flows from micro- and macro-economic perspectives. Trademarks of this Priority Programme are the access to individual-level and firm-level labour market data of exceptional quality, state-of-the-art experiments and the close link to the policy debate.

Funding period: since 2014

Participating members of the School: Michael Burda (only 1st funding period), Bernd Fitzenberger (speaker), Alexandra Spitz-Oener

Further information: Website

Computer systems pervade all parts of human activity and acquire, process and exchange data at a rapidly increasing pace. As a consequence, we live in a Big Data world where information is accumulating at an exponential rate and often the real problem has shifted from collecting enough data to dealing with its impetuous growth and abundance. As the speed improvement of single processing cores has basically stalled, the hardware industry keeps on increasing the number of processors/cores per board or graphics card, and also invests into improved storage technologies. This means our algorithms must become massively parallel using memory access patterns with high locality. More and more often, we will not even be able to consider all available data. These are challenges that need new algorithmic ideas. The Priority Programme wants to improve the situation by bringing together expertise from different areas. On the one hand, recent hardware developments and technological challenges need to be appropriately captured in better computational models. On the other hand, both common and problem specific algorithmic challenges due to big data are to be identified and clustered. Considering both sides, a basic toolbox of improved algorithms and data structures for big data sets is to be derived, where we do not only strive for theoretical results but intend to follow the whole algorithm engineering development cycle. Concrete algorithmic challenges include exploiting parallelism (multicores, GPUs, clouds) and memory-hierarchies (hard-disks, flash-memory, caches), dealing with large-scale dynamic data updates, processing compressed and encrypted data, approximation and online processing under resource constraints or reducing the consumption of energy by algorithmic measures. What distinguishes our initiative from most previous work is that we do not only want to tackle certain problems in isolation but aim to find solutions for several aspects at once: for example, given a concrete application challenge, how can we use massive parallelism, memory-hierarchies, specific data features and novel algorithmic techniques to yield better overall performance. Right from the start, a close interaction with various applications areas (like bioinformatics and information retrieval) will make sure that besides fundamental problems, a bunch of practically relevant questions will be tackled for the benefit of several communities.

Funding period: since 2014

Participating members of the School: Max Klimm

Further information: Website

For a long time, a public discussion on the lack of flexibility of the German labour market and persistently high unemployment has persisted. The multifaceted modifications of the general framework have caused very different reactions on the supply and demand side of the labour market and also within labour force groups and firms. Consequently, the heterogeneity of labour market conditions concerning the skill structure of labour, professions, firms, industries and regions is growing. Problems of inflexibility that hamper and inhibit the adjustment across sub-segments are evident. These observations lead to new challenges, since the greater and more frequently emerging rigidities of the labour market have to be met in a sophisticated way.

The prior objective of the Priority Programme is to reveal capabilities for more flexibility as well as to figure out the relations between different dimensions of heterogeneous labour markets and their flexibility. Making labour markets more flexible means to create conditions in such a way as to enable the economy to respond faster and more efficiently to new developments and challenges.

The central research idea is to be: Historically grown institutions have produced rigidities, particularly in the labour market, which have an impact on the adjustment of the labour force (in persons and hours), of wage compensation and of the skill level of employees. Adjustments will typically occur where restraints are lowest. This Priority Programme will, on the base of economic, business- and social-economic analysis, investigate the labour market theoretically and empirically (using econometrics and experiments) to gain new insights.

Funding period: 2004-2010

Participating members of the School: Bernd Fitzenberger (vice speaker), Michael C. Burda, Alexandra Spitz-Oener

Using both theoretical and empirical work, this priority programme aims to explore the diverse rela-tionships between product markets, on the one hand, and financial labour markets or markets for information and insurance services, on the other. The inclusion of input markets, with their specific imperfections, in the analysis of industrial structures is intended to substantially expand upon re-cent research into industrial organisation, the focus of which has, for the most part, been partially analytical. The economic evaluation of market results and, by extension, economic recommenda-tions to improve them are to be taken into consideration in the projects of this priority programme.

Funding period: 1995-2001

Participating members of the School: Bernd Fitzenberger, Joachim Schwalbach

Agricultural sectors in developed countries undergo a far-reaching structural change, which is driven by technological change, globalisation, new societal demands and a paradigm shift of the agricultural policy. The objective of the Research Unit is the integrative economic analysis of these adjustment processes. Already existing theoretical and methodological approaches for the analysis of the transformation process in the agricultural sector should be supplemented, further developed and consolidated. The result is a closer view regarding the agricultural structure change. The outcome is an enhanced picture and a better identification of causalities between exogenous factors, political instruments and corporate decision-making. And it is an essential precondition to predict and to govern structural change in terms of social objectives. Examples of unsolved research questions are:

(1) How can the persistence of farm structures overtime and the design of organisational structures within a value added chain be explained, and which relevance inhere political and institutional factors in that course?
(2) Which consequences emerge from a new orientation of agricultural politics towards policies for rural areas and their sectoral adjustment processes?
(3) Which perspectives do the production of renewable energies offer the agricultural sector?

An important feature of the Research Unit is the joint application of various quantitative methods, amongst others partial and general equilibrium models, multi-agent-models, and econometric models. The linkage of these approaches facilitates the analysis and the evaluation of complex policy scenarios.

Thus, a new generation of analysis instruments should be available for the study of complex social change processes after conclusion of the work of this Research Unit.

According to the basic adjustment of the research project methodical-theoretical realisations form an emphasis to the structural change. Furthermore, answers to current agricultural and environmental questions are aimed at. Addresses of the results besides the scientific community are therefore also decision makers in agricultural policy and Agribusiness.

Funding period: 2007-2015

Participating members of the School: Christian D. Schade

A central challenge at the interface of statistics and various branches of science is the development of methods for large data sets, complex data structures and high dimensional predictors. The aim of this Swiss German Research Unit is the development and investigation of new statistical procedures (statistical regularisation methods) for complex data structures as they appear in many areas of application.

Our major focus will be on methods, which result from qualitative constraints on the structure and geometry of the data model. Our fundamental claim is that statistical regularisation by qualitative constraints represents an unifying method for modelling of data structures, which is, on the one hand, flexible enough to recover important features of data and, on the other hand, specific enough to control the prediction or classification error.

Each of the fourteen subprojects deals with specific aspects of this goal. In cooperation with members of the Research Unit and with external partners specific areas of application will be tackled. This includes problems from systems biology, medical event analysis, astrophysics, material science, atmospheric research, forest science, labour market policy, biophotonics, medical imaging and empirical economic research.

These apparently different topics will be treated from the unifying perspective of statistical regularisation. In all of these disciplines statistical methods have been developed rapidly during the last years and only recently surprising commonalities become visible. Although these areas seem to be different at a first glance: The researchers expect that the common mathematical language and statistical methods will allow discovering further hidden commonalities. Therefore, the Research Unit is interdisciplinary, consisting of statisticians, mathematicians, computer scientists and economists, who collaborate closely.

Funding period: 2008-2017

Participating members of the School: Bernd Fitzenberger

Further information: Website

Data is becoming available in increasing quantities online, particularly in the form of measurement data (sensor networks, production, RFID, Smart Dust, etc.) and transaction data (retail, assembly, etc.), but also hidden in unstructured text. This data is generally collected completely automatically and provides an increasingly detailed reflection of the real world ("Internet of Things") and its mo-mentum. What’s more, there are web-based services that access this data depending on the con-text and situation, and generate higher-quality information via syntheses and complex evaluations (e.g. via data mining methods, semantic web techniques or application-specific software such as ERP or CRM). It is increasingly the case that such data is imported directly into technical equipment for the production of goods and into computer-integrated devices, especially for communication and transportation. Users and the information systems surrounding them are in continuous dia-logue. This opens up many interesting fields of application, while also presenting science with new challenges in relation to the technical, legal and economic bases of such "ubiquitous" information systems as well as their social impact.
The "Ubiquitous Information" Centre founded in November 2005 devotes its attention to these highly interdisciplinary challenges. It aims to conduct a conceptual, structural and analytical study of systems that take advantage of this new momentum of data, services and processes for complex applications and make it manageable. The wide-ranging subject areas are covered in the Centre by the participating scientists from the relevant disciplines: business administration, computer science, psychology, law, economics and business informatics.
The Centre also includes, among other things, the joint Ko-RFID project ("Collaborating in RFID-enabled Value Chains") funded by the Ministry of Economic Affairs, as well as Berlin's Research Center for Internet Economics (InterVal) funded by the Federal Ministry of Education and Re-search, in which scientists deal with application fields and business models in ubiquitous computing as well as with issues of data protection and security.

Funding period: 2005-2015

Participating members of the School: Bettina Berendt, Michael C. Burda, Helmut Gründl, Oliver Günther, Marcel Paulssen, Lars-Hendrik Röller, Christian D. Schade

Today, the large number of complex tasks and problems within the fields of economics can only be solved through a combination of means: economic expertise, the application of advanced quantitative methods and modern computing technology. With this idea in mind C.A.S.E. was created. It serves as an institutional framework, bringing together extraordinary high qualified researchers from the different universities and scientific centers in Berlin, with a background in statistics, mathematics and economics to find solutions for a better economic understanding.

Participating members of the School: Wolfgang K. Härdle (director), Michael C. Burda, Bernd Droge, Joachim Gassen, Michele Gazzola, Lutz Hildebrandt, Franz Hubert, Daniel Klapper, Brenda Lopez Cabrera, Ostap Okhrin, Christian D. Schade, Alexandra Spitz-Oener, Vladimir Spokoiny, Richard Stehle, Weining Wang, Bengt-Arne Wickström, Nikolaus Wolf

Further information: Website