CEU Professors Win European Research Council Starting Grants Worth €3.754 Million

October 2, 2012

Budapest, September 27, 2012—Associate Professor Miklos Koren and Professor Botond Koszegi of the CEU Department of Economics have been awarded the prestigious Starting Grant of the European Research Council (ERC). Professor Koren received €1.314 million for research on “Measuring Knowledge Flows from Developed Countries to Central and Eastern Europe.” Professor Koszegi received €1.275 million for research on “Behavioral Theory and Economic Applications.” Koren and Koszegi are the only recipients of the ERC Starting Grants from Hungary this year. Also, they are two of only four recipients in Central and Eastern Europe, together with one each in Poland and Slovakia.

This brings to three the number of ERC Starting Grants that CEU Department of Economics faculty members have won since last year, including a €1.165 million award to Professor Adam Szeidl in 2011 for his project, “Allocations in Social Networks: Evidence and Theory.” CEU is now home to a world-class research cluster in economics, centered on three interconnected projects:


The project studies how knowledge flows from countries on the technology frontier to Hungary and similar Central and Eastern European countries. For example, a Hungarian firm may reach the frontier by importing advanced-technology equipment and employing foreign managers or experts. The firm might also advance as its managers or workers learn from their peers. Currently, such knowledge flows are poorly understood because links among firms and workers –let alone knowledge transfers –are hard to measure. The research team of several Hungarian economists led by Koren will exploit existing data in innovative ways and conduct a large cross-country survey to ask firms about their inflow of foreign knowledge. This research can 1) help determine if countries on the European periphery can catch up to the technological leaders and 2) identify the most effective methods. The data will also enable researchers to evaluate how trade and immigration policies affect the country’s long-run growth potential.


The project investigates diverse topics in “behavioral economics,” a field that aims to shed light on economic phenomena by improving the psychological accuracy of economic models. One main research agenda emerges from a simple observation: Many products on the market today are sold to consumers with hidden costs deliberately incorporated by sellers. For example, mortgage contracts, which most people do not read or understand fully, can contain fees or clauses in the “fine print” that hurt consumers. How the market for deceptive products works is not well understood. Koszegi and collaborators will investigate incentives that motivate companies to invent and use deceptive methods, help identify the kinds of products most likely to be deceptive, try to answer why the prevalence of deceptive products has increased recently in many industries, consider whether firms have an incentive to educate consumers about the deceptive nature of their competitors' products, and ask whether government intervention can improve outcomes. The other main research agenda, in partnership with CEU colleague Adam Szeidl, is to understand factors that determine which aspects of people’s often complex choices attract their attention and carry more weight. For example, the decision of whether to exercise regularly involves many aspects of a person’s life that occur at different points in time. The researchers will try to understand how individuals weigh such factors when making decisions.

Adam Szeidl – NETWORKS

In this project, Adam Szeidl and co-authors measure the economic implications of social networks –which, although recognized as an important determinant of behavior, are not yet fully incorporated in economics – in several domains. One domain is how conversations with friends shape people's opinions about economically relevant topics, such as politics or the stock market. To understand this process, Adam Szeidl and co-authors experimentally measure which topics people choose to talk about, how far opinions spread in the network, and which views become influential. Results can help explain why some urban legends spread while some technologies fail to diffuse, or why different groups persistently disagree about facts. In a second domain, CEU colleague Miklos Koren and Adam Szeidl measure to what extent Hungarian firms learn about exporting from their neighbors. By passing on knowledge about what it takes to succeed in an export market, initial exporters can create snowball effects, a phenomenon potentially relevant both for explaining macroeconomic facts and for trade policy. In other parts of the project, Adam Szeidl and co-authors explore also how networks create trust over financial transactions; and the “dark” side of social networks, namely, the economic implications of favoring friends.

For a brief video featuring Prof. Koren, Prof. Koszegi and Prof. Szeidl, and also Vanda Mohacsi, European Grants and Projects Officer at CEU, please visit http://www.youtube.com/watch?v=P3YIqSzYryo


The European Research Council has selected 536 top early-career researchers across Europe, backed by a budget of almost €800 million. With grants averaging €1.5 million per project, the funding will enable the most promising scientists to develop their best ideas at the frontiers of knowledge. It will also allow them to build their own research teams, engaging more than 3,000 postdocs and PhD students as ERC team members, thereby supporting a new generation of top scientists in Europe.

The ERC calls target top researchers of any nationality who are based in or willing to move to Europe. In this call, Starting Grants are being awarded to researchers of 41 nationalities who will carry out their projects in approximately 220 institutions in 21 European countries.

In this Starting Grant competition, the ERC received 4,741 applications—a 16 percent rise from last year’s total of 4,080. Also, the budget increased more than 17 percent from 2011, as planned at the beginning of the Seventh Research Framework Program. The number of researchers selected for funding rose by about 12 percent. Just over 24 percent of selected researchers are women—an increase from last year's 21 percent. The average age of selected researchers is 37.

In this call, 44 percent of selected proposals were in Physical Science and Engineering, 37 percent in Life Sciences, and 19 percent in Social Sciences and Humanities. The grantees were selected through peer review by 25 panels comprised of renowned scientists from around the world. The selected projects cover a wide range of topics including social impacts of trans-Mediterranean renewable energy cooperation, laser-based hearing aids, and optical remote sensing technology for civil engineering works.

Commissioner for Research, Innovation and Science Maire Geoghegan-Quinn commented: “In a global knowledge economy we need new ideas to compete. So investing in world-class frontier research and in the next generation of scientists is one of Europe's top priorities. After just five years ERC grants are world-renowned, and help us retain and attract the best of the best.”


European Research Council (ERC)

• Set up in 2007 by the EU, ERC is the first pan-European funding organisation for frontier research. It aims to stimulate scientific excellence in Europe by encouraging competition for funding between the very best, creative researchers of any nationality and age. The ERC also strives to attract top researchers from anywhere in the world to come to Europe. It funds young, early-career top researchers (ERC Starting Grants), excellent scientists who are already independent (ERC Consolidator Grants), and senior research leaders (ERC Advanced Grants). The substantial funding is awarded based on peer review evaluation and can amount to a maximum of  €2 million for a Starting Grant, €2.75 million for a Consolidator Grant, and €3.5 million for an Advanced Grant. The ERC operates according to an “investigator-driven,” or “bottom-up,” approach, allowing researchers to identify new opportunities in any field of research. The ERC, the newest, pioneering component of the EU's Seventh Research Framework Programme ('Ideas' Specific Programme), has a total budget of €7.5 billion from 2007 to 2013. The European Commission has proposed a significant boost of the ERC budget to over €13 billion in the new framework programme “Horizon 2020” (2014-2020).

• The ERC is led by the ERC Scientific Council, comprised of 22 top scientists and scholars. The ERC President is Professor Helga Nowotny. The ERC Executive Agency implements the “Ideas” Specific Programme and is led by Director Pablo Amor.

• For more information, please visit http://erc.europa.eu and http://erc.europa.eu/starting-grants.