Drazen Prelec
Drazen Prelec is Professor of Management Science and Economics at the MIT Sloan School of Management, and one of the leading experts in neuroeconomics, where economics, psychology and neuroscience intersect.
Prelec has been a member of the MIT faculty since 1991, and presently holds appointments in the Sloan School, the Economics Department, and the Department of Brain and Cognitive Sciences, and he is the director of the MIT Sloan Neuroeconomics Lab. He received his Ph. D in experimental psychology and AB in applied mathematics from Harvard University. He has received a number of distinguished research awards, including the John Simon Guggenheim Fellowship.
Professor Prelec investigates the development of normative decision theory and the exploration of the empirical failures of that theory. His research deals with the psychology and neuroscience of decision-making, including behavioral economics and neuroeconomics, risky choice, time discounting, self-control, and consumer behavior. He works on both the development of normative decision theory and the exploration of the empirical failures of that theory, using behavioral and fMRI methods.
A current project on “self-signaling” tries to understand the strange power of non-causal motivation — when individuals favor actions that are diagnostic of good outcomes, even though these actions have little or no causal force. Diagnostic motivation is real, and is probably essential for human self-control. Its cognitive and neural mechanisms are not well understood however.
A second “Bayesian truth serum” project deals with scoring systems for evaluating individual and collective judgment in knowledge domains where no external truth criterion is available. Examples would be long-range forecasts, political or historical inferences, and artistic or legal interpretations. He is developing scoring systems that reward honest judgments, and that can identify truth even when majority opinion is wrong.
Professor Prelec is hosted in Strasbourg by USIAS Fellow 2017 Alan Kirman and will give a public lecture titled "Finding truth when most people are wrong" (see below), on Monday 23 October 2017, 15:30 at the Salle de Conférence of the MISHA.
USIAS public lecture: Finding truth when most people are wrong
October 23, 2017 | From 15:30 until 17:00 | Salle de Conférence, MISHA, 5, allée du Général Rouvillois, Strasbourg
By Drazen Prelec, MIT Sloan School of Management
The question whether to trust the judgments of a few experts or the wisdom-of-the-crowd is not just of scientific but also of political and philosophical interest. Crowd wisdom is usually defined as consensus — the majority vote or the median estimate or forecast. This principle seems fair and simple, but it has a blind spot for information that is new or unfamiliar.
The cost of wrong collective decisions can be high in terms of environmental risks underestimated, or promising ideas ignored. The challenge is to combine the virtues of a ‘democratic’ procedure, which allows anyone, irrespective of credentials, to register an opinion, with an 'elitist’ outcome that associates truth with the judgments of a select few.
Professor Prelec will describe a simple alternative to democratic averaging by a panel or online crowd. The alternative principle is to select judgments that receive more support than predicted by those same people. He will review some recent evidence bearing on this approach, and discuss extensions to forecasting.
