RICHARD BLUNDELL… Editors’ Message Dear Friends

TSEMag #1 { Autumn 2012 }

RESEARCH HIGHLIGHTS VOTE DIFFERENTLY SICK OF OUR LIFESTYLES TIME TO VALUE YOUR LIFE

HOT TOPIC INDIA: ECONOMICALLY TERRIFYING?

PARTNERSHIPS OUR SOCIALLY RESPONSIBLE INVESTMENTS

EVENTS TSE LAUNCHES THE TIGER FORUM

ALSO… ECOLE TSE • NEWS FLASH • CULTURE Meet RICHARD BLUNDELL… editors’ message Dear Friends,

t is with great pleasure that we We shall let the magazine speak for Emma Rothschild, professor of present you our new TSE magazine itself for this first edition, but we are History at Harvard and Cambridge, I - a quarterly publication aimed to sure that you will find, as we do, that has written a fascinating piece on bring you a dynamic, diverse and the range of subjects is a timely Adam Smith and his links with thought-provoking insight into the reminder of the breadth and depth Toulouse. Bruno Sire, President of activities of our community. TSE is all of the work undertaken at TSE and our host University, Toulouse 1 about economics, this ever-challenging the commitment of the school as a Capitole, brings us up to speed on science that drives our research, whole to the all-important and the new TSE building which will connecting the 160 members of our emerging social issues of today’s welcome us in 2015. three research centres - the ARQADE, world. the GREMAQ, and the LERNA. Last but not least, thanks to each and Jean TIROLE, President - TSE We extend our thanks to all the every member of TSE for their Yet TSE is much more - thanks in contributors of this first edition, in commitment, to our institutional particular to the undergraduate and particular to our external contributors, founders (CNRS-EHESS-INRA-UT1) graduate programmes of our “École who very kindly and with delightful and our partners for their highly TSE”, as well as the new enthusiasm accepted to take part in valued support, and of course to you multidisciplinary institute of advanced this new adventure. all for your continued interest. studies in social sciences, the IAST, Richard Blundell, Chairman of the and the venerable institute of industrial TSE Scientific Council, accorded us economics, the IDEI. Through this an inspirational and charming magazine we seek to provide a interview on his impressive career. unique platform for all these compelling branches that make up Christian GOLLIER, Director - TSE our community within the University of Toulouse 1 Capitole.

04 08 10 12 14 18 20 22 RESEARCH HIGHLIGHTS HOT TOPIC EVENTS THE BIG INTERVIEW PARTNERSHIPS ÉCOLE TSE NEWS FLASH CULTURE Karine Van der Straeten Interview with TSE Richard Blundell Our socially A new director Joining our ranks… Paul Seabright Vote differently: 4 voting Jean-Paul Azam launches the TIGER Forum. Crossroads in economics and responsible Jean-Philippe Lesne. At TSE and the IAST. Deciphering the war systems tried & tested. India: econometrics. investments And the winners are... of the sexes. Catarina Goulão economically terrifying? The FDIR Chair. Awards and prizes. Emma Rothschild Sick of our lifestyles. Following in the footsteps Tuba Tuncel of Adam Smith in Toulouse. Time to value your life.

Quarterly magazine of Toulouse School of Economics, 21 allée de Brienne - 31015 Toulouse Cedex 6 - Tel.: +33 (0) 5 67 73 27 68 - Commissioning editor: Christian Gollier - Production editor: Joel Echevarria - Editor-in-chief: Jennifer Stephenson - Graphic Design - Layout - Prepress: A La Une Conseil - Reporter: Marie Lepesant - Iconography: Studio Tchiz Photography: ON - Rémi Benoît, Patrick Dumas, Survival intl., TSE, UT1 - Printed by: Fabrègre - Circulation: 3400 copies - Printed on recycled paper certified «PEFC» - ISSN & French Press commission n°s under request.

02 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 03 RESEARCH HIGHLIGHTS RESEARCH HIGHLIGHTS Karine Van der Straeten Catarina Goulão Vote differently: 4 voting Sick of our lifestyles systems tried & tested of deaths in high-income countries are caused by non- A team of researchers in economics and political science made the most communicable chronic diseases (NCDs), that’s to say non- 87% infectious medical conditions such as cardiovascular diseases, of the 2012 French presidential elections to test out a number of different voting systems. They were looking to deepen their understanding of diabetes, asthma, and many cancers. This staggeringly high how electoral systems influence voter choices. We examine the feedback prevalence rate points to NCDs as the major cause of death with the study’s co-director Karine Van der Straeten, CNRS Research all over the world, except for Sub-Saharan Africa. Director at the TSE-GREMAQ research centre. In a recent paper, Catarina Goulão and Agustín Pérez-Barahona introduce a theoretical framework that contributes to the understanding of NCD epidemics, investigating the social dimension behind this modern-world problem.

How did you carry out the study? What conclusions do you draw from How are NCDs spread? transmission of NCDs, agents choose lower Does your NCD epidemic model apply Karine Van der Straten. During the three these results? The causes of NCDs are as diverse as health conditions and higher unhealthy worldwide? RECAP weeks leading up to the first round of France’s KVDS. It is still too early to draw any clear genetics, age, or even modifiable risk factors activities than what we consider to be socially The economic mechanisms behind NCD presidential elections, we asked French-speaking conclusions from the experiment, but we have such as smoking, lack of physical activity and optimal. epidemics are still far from being understood, internet users to vote in a mock election for the managed to collect some detailed data that we unhealthy eating. The considerable rise in the but we observe that our model is consistent > The candidates had new President of France. They were allowed to try are still analysing. Nonetheless, these official prevalence of NCDs over just a few decades How does your work influence policy? with the existence of regional discrepancies somewhat similar out four different voting systems: the two-round preliminary results seem consistent with findings cannot be linked solely to genetic mutations Our aim is to understand the economic in the prevalence of obesity and NCDs. For outcomes in both runoff system currently used in France, the that had already been observed in experiments or aging, because we observe that young implications of NCDs, and determine which example, France has a low, albeit rising, the two-round and proportional system used in Mexico, the carried out in France and elsewhere in Europe. people are also affected by NCDs, typically policy instruments can be used to enhance obesity rate of about 12% compared to 30% proportional runoff alternative vote method used in Ireland Centrist or more consensual candidates are in the form of obesity. Since these risk factors welfare. Taxes on unhealthy activities can in the United Kingdom. We are attempting to systems and the (candidates are ranked and then successively at a disadvantage in the runoff electoral are modifiable, NCDs can be qualified as be used to restore the social optimum, via a further the understanding of these disparities alternative vote method. eliminated) and the endorsement electoral system, which requires a strong voter base. «socially, not biologically» transmitted. In decrease in the probability of modifiable risk between countries. system that is not currently being used in any A centrist candidate like François Bayrou is highly our paper, we focus on intergenerational factors being transmitted. Examples include > François Hollande was country (all voters can endorse as many favoured by many voters, but few rank him as one transmission, providing an economic model taxes on cigarettes, junk food or soda. elected irrespective of the candidates as they like and the one with the most of their top choices. On the other hand, in the to determine to what extent modifiable risk electoral system used. endorsements is elected). endorsement system, which allows voters to factors - or habits - transmitted from one Don’t these so-called “fat taxes” voice their preferences more accurately by generation to the next are responsible for penalise the poor? Tell us about your findings... > François Bayrou was assessing each candidate, François Bayrou is NCD epidemics. One could argue that “fat taxes” penalise KVDS. In our experiment, François Hollande ranked higher in the ranked much higher. Take diet as an example. The probability of the poor, as they are more likely to buy lower was elected every time, regardless of the endorsement voting developing certain NCDs later in life depends quality foods because they are less expensive. voting method. The candidates received quite method than in the on how one eats as a child. However, children However, this is quite a narrow analysis, as similar scores in the two-round runoff system, the runoff system. do not generally choose what they eat, but we do not simply care about the finances proportional system and the alternative vote rather they eat what their parents feed them. of poorer people, but also their health, and method. But although 46% of voters in the Parents are not necessarily aware of the “fat taxes” clearly have a benefit on health, endorsement method clearly elected François Learn more... impact of these choices on their children’s reducing unhealthy consumption. Moreover, Hollande, François Bayrou came in second with The “Plural Voting” study is part of a health. Eating habits are hence transmitted the capital raised via these taxes can in turn 41% of the endorsements, followed by Nicolas broader research programme involving from one generation to the next, introducing subsidize health investments which often Learn more... Sarkozy and Jean-Luc Mélenchon, who both political scientists, psychologists and a negative externality and potentially leading target the poor, and have a generally positive received a comparable number of endorsements «Intergenerational transmission economists from Europe and North America. to NCDs in the case of unhealthy habits. impact on society. (each voter endorsed an average of 2.5 candidates). of non-communicable chronic Researchers are closely examining In general we find that, due to the social However, it should be noted that since participation 25 election periods in five countries over diseases» forthcoming in The in the experiment was voluntary, our sample of seven years to see how policy is affected by Journal of Public Economic Theory. test voters was neither random nor representative. various electoral systems. Catarina Goulão (TSE-GREMAQ, The results you see here have been adjusted, so to INRA) and Agustın Perez-Barahona speak, by votes in the first round of the real-life http://voteaupluriel.org (INRAAgroParisTech and École elections in May, but they should be interpreted Polytechnique). somewhat loosely. 04 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 05 RESEARCH HIGHLIGHTS RESEARCH HIGHLIGHTS Tuba Tuncel About Time to value our researchers your life

Benefit-cost analysis is a useful tool for evaluating public policies. When those policies are designed to reduce mortality risk, it is necessary to compare the value of reducing mortality risk with the costs of the project.

Our project investigates how people value a that reduce the risk of dying in a traffic accident, reduction in mortality risk depending on how the lower the mortality risk across all age groups by risk reduction is distributed over time. The study the same percentage. is based on an innovative paper by Nielsen et al. Other policies, like those that reduce air pollution, (2010) entitled ‘How would you like your gain in reduce the chance of dying more as the baseline life expectancy to be provided?” We will survey a risk of dying increases, i.e., as people get older or random sample of the French population on how their health deteriorates. Lastly, policies aimed at RECAP they see these issues. The objective of this work reducing the exposure to chemicals or radiation is to help understand public preferences for that cause cancer are not able to immediately Karine Van der Straeten Catarina Goulão Tuba Tuncel > Our project investigates different patterns of mortality risk reduction. This lower risk; their effect is felt over time. CNRS researcher, deputy director of the TSE- With a PhD in economics from the CORE research PhD candidate who joined James Hammitt’s how people value a may lead to a more accurate assessment of the GREMAQ research centre, and member of the centre at the Catholic University of Louvain in team in 2011 after obtaining a Masters degree in IAST. Belgium (2006), Catarina joined TSE in 2007 as environmental economics and natural resources reduction in mortality benefits of different policies. TSE-GREMAQ We have already observed that the value of a Her work brings together cutting-edge research an INRA research director at the from the Ecole TSE. risk depending on how in economics and political science, mainly laboratory. She uses quantitative methods to study the risk reduction is lower mortality risk can change depending on concentrating on the theory of collective decisions, the economics of health and public financing. distributed over time. when it occurs. Some policies, such as measures modelling political institutions and the experimental study of political behaviour. Karine has published articles in both French and international journals, like the Revue Française de Science Politique, Experimental Economics and Learn more... The Journal of Public Economics. In 2009, she was awarded the CNRS bronze Publications medal. Nielsen, J.S., S. Chilton, M. Jones-Lee, and H. Metcalf, «How would you like your gain in life expectancy to be provided? An experimental approach» James Hammitt Journal of Risk & Uncertainty, 2010. Professor of economics and decision sciences within the department of health policy and management of Harvard. Hammitt, J.K. and K. Haninger, James is currently on a multi-year scientific placement at the «Valuing fatal risks to children and TSE-LERNA research centre, supervising a team of PhD and adults: Effects of disease, latency, and post-doctoral researchers. With a PhD in public policy from risk aversion» Harvard (1988), James is a former mathematician at the Rand Corporation, and is renowned for his research in risk analysis. Journal of Risk & Uncertainty, 2010. He has published over 100 articles in journals such as Nature, Science, and leading economics publications. Hammitt, J.K., «Valuing changes in mortality risk: Lives Tuba Tuncel with her PhD supervisor, James Hammitt saved vs. life years saved» Review of Environmental Economics & Policy, 2007.

06 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 07 HOT TOPIC HOT TOPIC India: PROFILES economically terrifying? Interview with Jean-Paul Azam

How do you link terrorism and been eyeing up the Adivasis’ land, as it boasts economics? an abundance of mineral resources, particularly Jean-Paul AZAM Jean-Paul Azam. In the wake of the September bauxite. This is giving rise to violence that is 11 attacks, I wanted to find out if terrorism was putting the indigenous population in the direct > Jean-Paul Azam Jean-Paul Azam, professor at TSE, specialises in a conventional conflict. In 2005, I published line of fire. completed his PhD development economics, mostly in African an article describing how it derives from basic in economics at LSE in 1980 and is now a professor of countries. He has been studying a conflict microeconomic concepts. A terrorist sacrifices his How did you analyse the situation? economic sciences at the life for future generations. Since that behaviour JPA. We conducted econometric tests that helped affecting an indigenous population in central University of Toulouse 1 is rational, we can find a rational way of ending us develop a theory of provocation. The presence Capitole and a researcher at and eastern India. it. The response to transnational terrorism – of minerals leads to violence. It is perpetrated by when a citizen of a poor country attacks a rich the local government, which is supporting clashes the TSE-ARQADE laboratory country – is international aid. According to our between police forces and Maoist militants living (Quantitative Research Lab research, countries that receive aid and focus on in the Adivasis territories. The real goal is to Applied to Economic building educational drive the inhabitants from the forest so mining Development). As a senior capital produce fewer companies can move in. member of the Institut terrorists. Conversely, Universitaire de France, he countries with a strong studies economic and political Our job is How can your analysis help the American military development in poor countries, not to advise situation? presence produce focusing on international aid, FURTHER READING governments, Our job is not to advise governments, but more terrorists. JPA. migration, ethnic discrimina- but rather to rather to inform voters. Our scientific evidence tion, conflicts and terrorism. inform voters. will allow them to vote responsibly. The article Why did you Publications that we will be publishing with Kartika Bhatia Alpa Shah, choose to study should influence civil society in India, which «In the Shadows of the State. India? incidentally is fully capable of making itself heard. Indigenous Politics, Environmentalism, JPA. In 2009, a and Insurgency in Jharkhand» young student from Duke University Press Books, USA, 2010. India, Kartika Bhatia, came to see me on the Felix Padel and Samarendra Das, recommendation of «Out of This Earth. East India Adivasis the economists Jean and the Aluminium Cartel» Drèze and Michael Orient Blackswan, New Delhi, 2010. Walton. She told me Kartika Bhatia the story of the Adivasis, a /LEARN MORE... > Kartika Bhatia group of different Indian tribes Jean-Paul Azam and Kartika Bhatia, travelled from New Delhi to living in the forests of central «Provoking Insurgency in a Federal State: complete her final year of and eastern India. Over the Theory and Application to India» graduate school at TSE, where past few years, Indian and TSE Working Paper, no. 12-316, August 2012. she began working with Jean- foreign industrialists have Paul Azam on the Naxalite conflict in India, initially for her Master’s thesis and now for her PhD dissertation. 08 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 09 EVENTS EVENTS

PAST EVENTS TSE launches UPCOMING EVENTS

11-12 May 2012 11-12 October 2012 Financial Econometrics Conference (TSE). the TIGER Forum! Behavioural Environmental Economics Conference (IAST - IDEI - INRA - ANR). 12-13 June 2012 Identity & Incentives in Organizations 18-19 October 2012 Symposium (IAST - ANR). Development Economics Workshop (TSE - EUDN). 14-16 June 2012 «Social Interactions, Identity and Wellbeing» Conference (IAST - CIFAR). 22 November 2012 Long-term care Workshop (TSE - IDEI - SCOR). 21-22 June 2012 Industrial Organisation & Food Processing Industry Conference (IDEI - INRA). 17-18 January 2013 The Economics of Energy Markets Conference (TSE IDEI). 28-29 June 2012 Market Power in Vertically Related Industry Workshop (ANR - DFG). Mark this new annual rendezvous in your place for economic science, reputed for its 12-13 July 2012 diaries – beginning with 5-7 June 2013, the scientific excellence and ability to provide Risk & choice: a conference in honour of first week of June each year is now to be the keys to understanding the major issues The programme for the first forumis still being finalised, but it is already packed: Louis Eeckhoudt (TSE). known as the TSE TIGER Forum week. of our times. Why TIGER? To express the fields of At the heart of TIGER, TSE researcher > 3 international scientific conferences moderated by TSE researchers: 6-7 September 2012 expertise that TSE, today among the Marc Ivaldi and his colleagues have • “Pricing long-term projects and assets in an uncertain world”, organised by Christian Risk Management and Financial Markets top 10 centres of research in economics created a forum where the world’s leading Gollier, Conference (TSE). worldwide, has become renowned for: economists can rub shoulders at scientific • “The economics of intellectual property, software and the Internet”, co-organised by “Toulouse - Industry - Globalisation - events, open round tables, prestigious Jacques Crémer and Paul Seabright, 28-29 September 2012 Environment - Regulation”. The TIGER prize awards and cultural highlights. • “Information processing in macroeconomics and finance”, organised by Franck Portier, Conference Celebrating the 65th Birthday of Forum aims to become the global meeting JP Florens (TSE). > a plenary session on a current topic where corporate leaders, elected officials and representatives of civil society can exchange ideas with major figures in global Tuesday Wednesday Thursday Friday Saturday economics, 4 June 5 June 6 June 7 June 8 June > the award ceremony for the prestigious Laffont Prize organised by the IDEI and the Toulouse City Hall (recent winners include Robert Townsend, Robert Wilson, TSE SCIENTIFIC OPENING SCIENTIFIC TIGER PLENARY CULTURAL Roger Myerson, Richard Blundell and Stephan Ross), COUNCIL SESSION CONFERENCES SESSION PROGRAMME

> a gala evening in a distinguished Toulouse setting where economics meets with SCIENTIFIC JEAN-JACQUES SCIENTIFIC culture, CONFERENCES LAFFONT PRIZE CONFERENCES

> the TSE Scientific Council meetingincluding 3 Nobel Prize winners. DÎNER DES GALA DINNER CONFÉRENCIERS Contact: [email protected] Marc Ivaldi

10 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 11 THE BIG INTERVIEW THE BIG INTERVIEW Meet Richard Blundell: world-renowned economist and econometrician, celebrated internationally for his pioneering work in microeconometrics applied to the analysis of labour supply, welfare reform and consumer behaviour.

How would you describe your work? Richard Blundell. What really inspires me is the I have always had a keen interest in intersection between economics and econometrics. understanding household behaviour. That is seeing how ideas from economic theory work out when confronted by data on the observed Dan McFadden and Jim Heckman. Back in the UK, actions of economic agents. Then putting the together with a group of wonderful colleagues and results to work in addressing key policy questions. students, I was fortunate to be given the More specifically, I have always had a keen interest opportunity to help build the vibrant research in understanding household behaviour - whether it group at UCL and IFS. be consumer choice, individual and family labour An ongoing highlight over the years has been > How do individuals and discovering the power of careful microeconometric supply decisions, or the life-time allocations of families deal with adverse income and savings. These various aspects of analysis to deliver a rigorous understanding of economic shocks? household behaviour raise many fascinating economic behaviour. Really though, when it comes economic and econometric questions. The answers down to what matters, it is seeing talented to which are key in the policy debate concerning students and younger colleagues become great > How does family labour tax and welfare design, as well as in public policy economists and econometricians. The fact that supply interact with the more generally. they continue to let me work with them is the icing on the cake! workings of the tax and benefit system?

A careful microeconometric analysis can > How can we avoid deliver a rigorous understanding of unnecessary parametric economic behaviour. restrictions when modelling heterogeneous decisions?

How does this work feed into Tell us about your links with TSE > How can we robustly public policy? RB. Of course, my links with TSE are long-standing assess whether consumers and remain very strong. We share a leading pan- RB. The key to getting my research into the policy behave rationally? domain has been my association with the Institute European doctoral programme ‘ENTER’ and have for Fiscal Studies. IFS has established itself as a key many joint research projects and interests. source of rigorous policy research on taxation, Toulouse is a wonderful city and TSE has a > What are the returns welfare reform, education policy, inequality, phenomenal economics and econometrics group. I to education for different pension and savings policy etc. Since 1986, when I have been visiting here since the early 1980s when types of individuals? Richard Blundellbecame the IFS Research Director, I have split my Jean-Jacques Laffont was establishing the new time 50-50 between UCL and IFS. This has provided research group in economics at Toulouse. Richard Blundell is… an exceptional research environment for bringing We shared many similar ideals in research, aiming > How do savings decisions together theory, econometrics and policy. to build institutions in Europe to compete at the adapt to changes in David Ricardo Chair of Political very top levels internationally and with much of retirement ages? Economy at University College the research embedded in strong empirical and London (UCL), What do you consider to be the highlights policy foundations. Hopefully my relationship with > How do retirement Best young European of your career? TSE will continue and flourish! decisions themselves economist in 1995 (Yrjö RB. My research path began through my Jahnsson Award), interactions with the brilliant economist Terrence respond to changing Gorman, while I was studying at LSE. He was economic circumstances? Research Director at the always willing to challenge any point of view and Institute for Fiscal Studies really understood the power of economic modelling (IFS), in gaining insights into human behaviour. Most Director of the ESRC Centre for importantly he stimulated my interest in the study the Microeconomic Analysis of of consumer behaviour. Public Policy, My career really took off after a series of early visits to North America: in particular to UBC, Berkeley, Chairman of the TSE Chicago, Toronto, MIT and Princeton, where I was Scientific Council. lucky enough to meet and discuss ideas with many inspirational colleagues, perhaps most notably

12 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 13 PARTNERSHIPS PARTNERSHIPS

Our socially UPCOMING SRI EVENTS

WHAT IS SRI? responsible investments «Socially responsible investment (SRI) is the application In 2007, the multidisciplinary teams at the Institute of Industrial Economics (IDEI) and the Ecole of sustainable development Polytechnique created the Sustainable Finance and Responsible Investment Chair (FDIR). to financial investing. In other words, it is a type Sebastien Pouget, TSE researcher and professor of finance at the University of Toulouse 1 Capitole (IAE), is of investing that accounts co-director of the FDIR chair. He talks to us about the chair’s objectives. for factors related to Environmental, Social and Governance criteria (also 11-12 October 2012 known as ESG criteria) > The TSE-IDEI Conference in Toulouse on and, of course, traditional behavioural economics, the environment and financial criteria». SRI. Get the programme: [email protected] *source: French Ministry of Ecology, Sustainable Development and Energy. Interview with Sébastien Pouget

Why did you create a chair on this subject? What types of issues does the chair address? Sebastien Pouget. A growing number of institutional SP. The main research themes focus on understanding and private clients are starting to encourage portfolio what inspires investors to gravitate toward SRI, defining managers to make a meaningful commitment to and measuring what makes an investment socially sustainable development by favouring investments that responsible and the impact SRI has on investors, companies have established and controlled extrafinancial, and society as a whole. By definition, these issues are environmental and social impacts. These multidisciplinary and combine elements of economics, managers are also looking for analysis tools psychology and sociology. They draw upon a number of and extrafinancial investment strategies to fields in economic science (environmental, labour and complement the financial instruments already risk economics, public economics, financial economics, 11-20 October 2012 in their arsenal. The FDIR chair’s objective etc.). The diverse and cross-cutting nature of the research > SRI Week under the High Patronage of the is to further the understanding of what carried out at TSE and the IDEI make these research centres French Ministry of Ecology, Sustainable Deve- motivates socially responsible investing an ideal base for developing research within the FDIR chair. lopment and Energy. (SRI), and provide both the conceptual and empirical bases for this type of investment. What influence does SRI have on the financial The chair is that much more important given the markets at this time? challenges currently facing our planet, such as SP. The latest figures issued by Eurosif suggest that climate change and inequalities between rich and about 10% of the assets being managed in Europe poor countries. are socially responsible. So, SRI is shifting from being a niche market to an integrated part of the approaches used by many portfolio managers. FURTHER READING Publications With the participation of Nicolas Treich, «Cahiers de l’évaluation n°6 : la notation extra-financière» (Valuation Journal No. 6: Extrafinancial Rating), FDIR WEBSITE www.idei.fr/fdir Cahiers de l’ILB, special FDIR Chair edition

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New partnerships An ambitious building project Thomas-Olivier Léautier, IDEI-TSE and Jean-Yves Roure, EDF The University of Toulouse 1 Capitole, co-founder of the Jean-Jacques Laffont-TSE Foundation, is the historical home of the researchers who created Toulouse School of Hervé Ossard, Director IDEI EDF & IDEI Economics, initially at the Arsenal Campus and from 1994 onwards at the Manufacture win prize for corporate learning des Tabacs building, where TSE continues its activities today. The IDEI, collaborative research centre Bruno Sire, President of UT1 Capitole, gives us the latest details on what will be the third, closely linked to TSE & its researchers, and very exciting, stage in the TSE building history. has recently established a series of new A corporate training programme designed for EDF by contracts. Hervé Ossard, Director of IDEI, Thomas-Olivier Léautier (TSE-IDEI researcher and Interview with bruno sire th shares the details with us. IAE-UT1 professor) wins the 13 Corporate University Xchange Prize for Excellence and Innovation. How did this new building project for TSE come How did you choose the architects? about? BS: The French university autonomy act (French A partnership has been formed with Qualcomm (USA) in the field Bruno SIRE: There are several milestones in the government, 2007) allowed us to directly hire a general of innovation economics, focusing on intellectual property and development of our university that led us to reconsider contractor to construct the 11,000 m2 building. We information technologies. This agreement complements a number the building programme, which had originally been launched an international design competition and the of existing research partnerships with industrial actors in the The EDF Corporate University for This distinction, which was planned as part of the Contrat de Projet Etat-Région winner was an Irish architectural firm named Grafton (Silver “digital society” field, significantly boosting the development of Management, which caters for awarded in May at the University (Contract for Regional and State Projects, or CPER) in 2007. Lion, Venice Biennale 2012). They designed an amazing the IDEI/TSE research in this area. the group’s 12,000 managers, of Wharton in Philadelphia, was First of all, the creation of the TSE Foundation in 2007, then building from an architectural standpoint that fits nicely A new partnership has also been established with RFF (Réseau has just won the 13th Corporate given in recognition of a training the transformation of the UT1 Economic Sciences faculty into the city and perfectly reflects a sense of international Ferré de France), the owner and manager of the railway system University Xchange Prize for programme designed by and into the “École TSE” in 2011, and finally the creation of scholarship and knowledge sharing. A monument, if you in France. In addition, another agreement has been met with Excellence and Innovation, a carried out by Thomas-Olivier the IAST multidisciplinary research centre, funded will, to economics research that creates an image for our RTE (Réseau de Transport d’électricité), the French company global benchmark in terms of Léautier, TSE-IDEI researcher by the national Investissements d’Avenir university of an open society in line with the times. The that manages the high-voltage and very high-voltage electricity corporate learning. and Professor at the Management programme (Investments for the Future), also in building materials selected by Grafton are a tour de force transport network. These two companies are interested in research School (IAE) of the University of 2011. that is a successful reinterpretation of the region’s Every year the Corporate on network economics, long-term investment valuation and, more Toulouse I Capitole. Professor architectural style. The building will accommodate around University Xchange, which specifically, factoring for risk in economic decisions. Léautier, who is a specialist in What types of architectural constraints 400 people in the offices and project rooms, plus it provides consists essentially of American Partnerships have also been signed with the following French energy economics, designed were you forced to deal with? space for meetings, dining areas, amphitheatres and company universities, distributes organisations: La Banque Postale, ERDF (Électricité Réseau this programme for the leaders of BS: We chose a wonderful site in terms of its reception rooms. Distribution France), the Caisse des depots (Deposits and prestigious awards that are ERDF, a subsidiary of the EDF spatial location and surrounding environment. Consignments Fund) and the Autorité des Normes Comptables decided on by a jury of experts Group. The successful programme The new building needs to better tie together the Does the new building have to meet high (Accounting standards authority) . from global businesses, to is focused on the economics of Arsenal Campus’ central building and the expectations? Within our executive training activities, a project is underway reward the best training local licensing mechanisms in the Manufacture des Tabacs buildings, as well as BS: Yes, in fact it does. It will offer a work environment with the Préfecture of the Midi-Pyrénées Region (DIRECCTE), programmes in the fields of electricity distribution industry. provide a general feeling of cohesiveness and a meeting the standards of ergonomics and comfort of the the Toulouse Chamber of Commerce and Industry, and strategy, leadership and the new entrance to our campus. We also had to major international universities, and we all hope its dynamic companies in the aerospace industry. The project focuses on development of managers respect the constraints inherent to the site itself and radiant atmosphere will create a stronger sense of currency risk management (euro-dollar) in the aerospace sector. and future managers. (historically listed perimeter, waterway bordering belonging to the outstanding research and academic one side, 15th century fortress wall) and enhance community that is TSE today. The IDEI is currently involved in some 40 partnerships. Bruno SIRE, one of Toulouse’s iconic districts (Eglise Saint- President, University of Toulouse 1 Capitole Pierre des Cuisines, one of the oldest quarters in www.idei.fr southern France, and the Place Saint-Pierre). www.ut-capitole.fr

16 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 17 ÉCOLE TSE ÉCOLE TSE

Lights up KEY FIGURES on the new director 1,500 students in L1 and L2 (two-year 7 specialities in the graduate preparatory programme after high school). programme: Economic theory and Jean-Philippe Lesne was recently named Dean of the “École TSE”, our econometrics, Economics and Competition Law, 150-200 students in each TSE class year Development economics and public policies, Economics teaching faculty. A graduate of Polytechnique and ENSAE with a PhD in (L3-M1-M2, final year undergrad + two Masters of markets and organizations, Financial markets and economics from TSE, since 2008 he has been senior vice-president at BVA, years). intermediaries, Statistics and Econometrics, a market and opinion survey institute. With his extensive experience as a 80 nationalities in the graduate Environmental and natural resources economics. professor and corporate manager, Lesne is keen on educating world- programme. class economists and statisticians who are tuned into market needs.

Interview with JEAN-PHILIPPE LESNE But there is still a selection process? TSE won the IDEFI call for projects (Ini- JPL. Of course. It is mostly for students entering tiatives of excellence in innovative What are your plans for for example by inviting corporate leaders their third undergraduate year but also in the education). What changes will this the school? and experts to come talk about their jobs. graduate programme for applicants from French bring about? Jean-Philippe Lesne. We or foreign universities who want to attend the JPL. Let’s take two examples. We are going to have to take the best of both of And does that change anything in school. Some people are surprised and even of- introduce problem-based learning, which is France’s 200 year-old systems terms of student relations or atten- fended when they learn we apply a selection already widely used in engineering sciences but of higher education: the ding TSE? process within the university system. That is be- not so much in our field. The professor puts the Grandes Ecoles system and the JPL. Yes, without a doubt. First and fore- cause they do not understand it well, or pretend students in groups to solve a real problem rela- university system. most, the school belongs to the students. not to get it... but we stand by this selection ted to their coursework. In the long-term, we Education and research have They have to be an active part of their own method, which is a measure of excellence and plan to involve companies to set the problems to always gone hand in hand in education through, for example, feedback does not create hang-ups, even more so since all be solved. We are also planning to use experi- the universities. That is espe- they can give from internships, the junior the students coming out of our two-year prepa- mental economics to teach economic concepts: cially true at TSE; its economics enterprise programme, or activities with the ratory programme are offered several academic «serious games» help students to become more research centre is among the top Student Association (BDE). But the am- paths, mainly in economics and management. actively involved in their own learning. 10 in the world, meaning we can biance at the school should maintain the put some of the best economists in the benefits of the university system. There are Are you currently visible on the inter- classrooms. So, our school attracts students no competitive entrance exams, instead we national scene? from all over the world, many of whom go prefer an application-based selection pro- JPL. We already have an extensive foreign stu- into academic careers after their PhD. cess that rewards the hard work of the dent recruitment programme, and now we have But we also want to give the school the ad- students during their first two undergrad to increase career opportunities abroad. In the vantages of the Grandes Ecoles which are years. Another advantage, welfare-wise, is longer term, we are thinking about creating Learn more... able to round off the students’ education the modest tuition fees we apply, on the dual-degree programmes with major internatio- using close relations with industry and a same level as all public universities. The ab- nal universities. dynamic alumni network to give them clear sence of a post-high school selection system TSE AND IDEFI careers goals. That is why we encourage coupled with these low tuition costs enables any initiative that fosters links with the out- us to attract a very broad population of • Project: «FREDD»: young students, including those with more FoRmer les Economistes De Demain side world, including internships, gap years, junior enterprise, etc. We are also creating difficult financial and cultural backgrounds. (Training the Economists of the Future) Through all this, we aim to uphold the aca- € an alumni association to create strong • Budget: 7 million networks, helping our grads stay in contact. demic level of excellence while continuing to • Duration: 7 years (2012-2019) Lastly, we are building stronger ties between fulfil our role in promoting diversity. the school and the economics community, www.ecole.tse-fr.eu

18 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 19 NEWS FLASH NEWS FLASH

“BEST ARTICLE” PRIZES IN TRANSPORT ECONOMICS SENIOR JUNIOR JUNIOR Joining At the Kuhmo Nectar Conference of the International Transportation TSE CHAIR TSE CHAIR TSE CHAIR our ranks... Economics Association (ITEA) in Berlin, 18-22 June 2012: And the With the academic year 2012-13, TSE and IAST are proud to welcome our new faculty winners are... members:

PhD in economics PhD in finance from the PhD in economics from Marc Ivaldi, TSE-EHESS researcher and expert in Antonio Russo, PhD student from MIT and assistant University of Chicago, Northwestern University, professor at the Booth School of Business, Daniel Garrett specialises infrastructure economics, and Daniel Coublucq, PhD at TSE, received the Junior University of Chicago Marianne Andries in theoretical economics student at TSE, received the Best Paper Overall Researcher Best Paper 2012-2013 TSE award for their article «Static-Dynamic Efficiency award for his article «Voting VISITING PROFESSOR since 2005, Thomas specialises in financial and industrial economics. Chaney is internationally asset valuation and Tradeoff in the US Rail Freight Industry: Assessment on Road Congestion Policy». recognised for his work behavioural finance. of Open Access Policy.» . in international trade Mike Riordan economics. > University of Columbia > Industrial economics THREE Augustin Landier, TSE SENIOR BEST JUNIOR HONORIS researcher specialising in MEMBER OF Michel Le Breton, professor RESEARCHER finance, and co-winner of economics and TSE CAUSA THE IUF DOCTORATES Alissa Macmillan David Thesmar (HEC researcher, was reinstated IAST 2012-2013 IAST recently finished her PhD Paris) were awarded the for his second five-year term POST-DOC VISITING PROFESSORS in religious studies at Best Junior Researcher as a senior member of the Brown University. Her Prize by the Institut Louis Institut universitaire de research focuses on Bachelier and the Institut France by the French Thomas Hobbes and Simone Sepe Europlace de Finance. Ministry of Higher Education religion, philosophy and > University of The prize honours young and Research. religion in the modern Arizona researchers who have era, pragmatism, > Law published articles in the top JUNIOR specialised international IAST CHAIR naturalism, and religious theory. revues. Jörgen Weibull > Stockholm School of NOMINEE FOR Every year, Objectif RECIPIENT In recent months, TSE Jordanna Matlon THE TROPHÉES OF THE 2012 IAST Economics News awards trophies Patrick Rey, TSE researcher, Chairman Jean Tirole was obtained her PhD DES FEMMES R. BARRE POST-DOC > Evolutionary to exceptional women was awarded the Raymond awarded three Honoris in sociology from 2012 CHAIR economics to honour their Barre Chair by the J. causa doctorates, from the University of accomplishments and W. Goethe University the University of Rome 2 California, Berkeley. dedication to their field. in Frankfurt. He gave a «Tor Vergata», the Athens Based on visual Karine Van der Straeten, conference entitled “General University of Economics sociology, she studies Robert Barsky CNRS researcher at the TSE- concepts and influences and Business, and the people’s livelihoods > University of from Germany, France and University of Mannheim. PhD in economics from the University of Southern and ways of life in the GREMAQ laboratory, was Vanderbilt the United Kingdom in the California, Mohamed Saleh focuses on economic urban outskirts. nominated in the Female history, development economics and political > Literary theory Researcher category. European Union” to the economics. French-German Society in Frankfurt, Germany on 22 May.

20 TSE Mag { Autumn 2012 } TSE Mag { Autumn 2012 } 21 CULTURE CULTURE Paul Seabright Deciphering the Following in the footsteps of war of the sexes Adam Smith in Toulouse Emma Rothschild, professor of history at Harvard University, In his book “The War of the Sexes: How talks in her book «The Inner Life of Empires» about economist Conflict and Cooperation Have Shaped Men and Women from Prehistory to the REVIEWS Adam Smith’s ties to Toulouse. Present”, TSE researcher Paul Seabright tackles the age-old issue of the war of «From the mating habits of praying The 18 months that Adam Smith spent in Toulouse in 1764-1765 were of the sexes through the lens of various mantises to the battlefield of decisive importance in his life, and their trace is to be found throughout research fields. corporate boardrooms, The Wealth of Nations. Paul Seabright takes us on a fantastic journey across time and Paul Seabright shows that clashes disciplines to uncover why - and between the sexes are, paradoxically, how - men and women have the product of their cooperation. learned to work together, and what forces still keep them apart in The author modern society.» Men and women today have an unprecedented Linda Babcock, co-author of «Women opportunity to achieve equal power and respect. But if Don’t Ask: The High Cost of Avoiding we are to finally escape the legacy of our primate Negotiation, and Positive Strategies for The author ancestors and achieve greater harmony and equality Change» > Born in 1958 in England, between the sexes, we first need to understand the Paul Seabright holds a PhD mixed inheritance of conflict and cooperation in economics from the developed in our remote evolutionary past. Drawing on «The War of the Sexes is a delight to University of Oxford. He has biology, sociology, anthropology, and economics, read. Paul Seabright launches taught at the University of Seabright shows that conflict between the sexes is, a charm offensive on those who Cambridge and the Ecole paradoxically, the product of cooperation. The would prefer not to think that «I have begun to write a book in order to in many respects a profoundly French book, and it was in Polytechnique in Paris, is the evolutionary niche – the long dependent childhood – gender differences have any author of «The Company of carved out by our ancestors requires the highest level pass away the time» Smith wrote to David Toulouse, according to Smith’s first biographer, that he biological basis, and an intellectual “had an opportunity of correcting and extending his Strangers: A Natural History of of cooperative talent. But it also gives couples more to offensive on those who think that Hume, soon after he arrived, and a few information concerning the internal policy of France.” It Economic Life» (Markus Haller fight about. Men and women became experts at these differences are large and weeks later, he looked to a life of «gayety was in Toulouse that he was able to observe, for the first Editions, 2010), and regularly influencing one another to achieve their cooperative intractable.» and amusement.» He made friends, in time, the regulation or “police” of commerce, and it was contributes to public debate, ends, but also became trapped in strategies of in Bordeaux, as well as among his enterprising new particular, with three Norwegians, who notably via Le Monde and The manipulation and deception in pursuit of sex and Terri Apter, author of «Working Women friends, that he observed the long-distance commerce Economist. Professor of economics partnership. In early societies, economic conditions Don’t Have Wives» later became officials and reformers of the that is so central to The Wealth of Nations. > Emma Rothschild is at the University of Toulouse 1 moved the balance of power in favour of men, as they Danish Asiatic Company. Capitole, Seabright is currently Economic history is a cyclical inquiry, and the past few professor of history at cornered scarce resources for use in the sexual bargain. years, like the 1890s and the 1930s, have brought an Director of the IAST (Institute for «Come on a journey from the Today, conditions have changed beyond recognition, He visited Bordeaux; he travelled on the way home with increased interest in financial history, and in the history Harvard University and Advanced Studies in Toulouse). Pleistocene to the present - a yet inequalities between men and women persist, as an acquaintance who was between postings in West of economic thought. This has even inspired new Director of the Joint Centre fascinating trip that uses the Seabright’s research in the brains, talents, and preferences we inherited from Florida and Bombay; in Toulouse, the young conversations between historians and economists. Adam for History and Economics behavioural economics provides a economic causes and consequences «English gentlemen» organized a horse race beyond the Smith is far more interesting as depicted in these our ancestors struggle to deal with the unpredictable at the University «natural history of the economy»; forces unleashed by the modern information economy. of our reproductive choices to Embouchure, which was said to have attracted 30,000 conversations than the abstract dogmatist of laissez- by delving into prehistory and explain relations between men and spectators. faire who loomed over so much of 20th century political of Cambridge and Harvard. economics. He was an observer of events around him, reinterpreting Darwinism, he women through the ages. Smith was a celebrated moral philosopher, when he “Sexonomics” is the title of the French and in particular of information, risk and regulation. He identifies keys to understanding I recommend this book to anyone arrived in Toulouse, with no more than a mild interest in «The Inner Life of Empires» edition of “The War of the Sexes” was happy in Toulouse in 1764, and he is well-suited to the behaviour of men and women economic life, as part of his study of legal history. The (2011), dedicated to Adam (Princeton UP 2012). “Sexonomics” was interested in the battle of the sexes TSE almost 250 years later. in the market economy, proving Wealth of Nations, which he completed ten years later, is Smith and his friends. - it’s a great read.» that male domination and gender published in France by Editions Alma on wars are far from inevitable. 4 October 2012. Anne C. Case, Princeton University

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