Lecture: How economic insecurity distorts economic decision-making

This lecture is part of the Economic Insecurity: Causes, Consequences and Actions (EICCA) research project.

The lecture will take place with a networking reception. Registration is mandatory and open until 23 March 2026. To register, please contact karan.singhal@uni.lu

About the lecture:

Economic insecurity and instability affect not only what we decide, but how we decide. Sustained exposure to precarious economic environments can induce a chronic engagement of impulsive, automatic processes at the expense of deliberative reasoning, resulting in systematic decision biases. At the same time, by increasing uncertainty about the consequences of choices, insecurity amplifies noise in deliberative decision-making. This lecture reviews recent experimental evidence from neuroeconomics and behavioral economics showing how economically unstable environments trigger faulty heuristics rooted in the architecture of human cognition, thereby degrading the very cognitive infrastructure needed to escape precarious situations. It further discusses how increased noise in individual decision-making erodes the ability of analysts and policymakers to infer preferences from observed choices and to evaluate the effects of economic policies.

About the speaker:

Carlos Alós-Ferrer is Chair Professor of Economics at Lancaster University Management School.