Professor of Experimental Finance and Decision Neuroscience Honorary Fellow, Florey Institute for Neuroscience and Mental Health Bossaerts pioneered the use of controlled experimentation with human subjects in the study of asset pricing. He initially focused on the Capital Asset Pricing Model (CAPM), used throughout the financial industry to evaluate risk/return trade-offs and portfolio performance evaluation; later on he developed the methodology to test the core dynamic model used in finance, macro-economics and central banking to understand the link between asset prices, aggregate income, aggregate consumption, and business cycles (the "Lucas" model).
This research was published in the main journals of finance (Journal of Finance, Review of Financial Studies, Review of Finance) and economics (Econometrica, Journal of Political Economy). The contributions led to a grant from the U.S. National Science Foundation to organise a conference with the exclusive goal of educating the best and brightest asset-pricing theorists on the use of experimental methodology. Recently, Bossaerts has started work on policy issues (using markets to promote intellectual discovery; merits and drawbacks of opaque, decentralised markets; algorithmic trading and human-robot interface; for this, he received seed grants from the U.S. National Science Foundation and the Foundation of the French Central Bank. Bossaerts also pioneered the development of neuroeconomics and decision neuroscience. The former investigates the neurobiological foundations of decision and game theory, which has exclusively worked at the "computational level" (to use a term coined by D Marr and T Poggio from MIT); the latter puts biology in a more central position, realising that there is biological diversity that maps into behaviour that is not captured by traditional decision and game theory (including Prospect Theory). Bossaerts focuses on decision making under uncertainty, where "uncertainty" refers to both "risks created by Nature" (over which the decision-maker has no control — even if the decision-maker may think otherwise) and "strategic risks." His contributions have been published in top neuroscience and general science journals (Neuron, Journal of Neuroscience, PLoS Computational Biology, Proceedings of The National Academy of Sciences,...), and he pioneered the publication of decision neurocience in finance (Journal of Finance). Prior to working on experimental finance and decision neuroscience, Bossaerts contributed to financial econometrics and econometric theory (publications in, a.o., Econometric Theory and Mathematical Finance), game theory (Review of Economic Studies) and asset pricing (Review of Financial Studies, Review of Economic Studies, Journal of Finance,...). Bossaerts received his PhD from UCLA. He started his academic track at Carnegie Mellon University, and before going The University of Melbourne, he spent most of his career at the California Institute of Technology (Caltech). He has also had positions at Tilburg University, Yale University, EPFL and the University of Utah. He held a number of academic-administrative positions, including Chair ("Dean") of The Humanities and Social Sciences at Caltech. In 2010, he was elected Fellow of The Econometric Society, and in 2017 Fellow of the Academy of The Social Sciences in Australia (ASSA). See http://bmmlab.org
Find out more about Peter Bossaerts' experience
Peter Bossaerts' highlights
Peter Bossaerts' selected work
Displaying the 3 most recent projects by Peter Bossaerts.
Displaying the 112 most recent scholarly works by Peter Bossaerts.
Computational Complexity and Asset Pricing
Peter Bossaerts, Elizabeth Bowman, Felix Fattinger, Harvey Huang, Carsten Murawski, Anirudh Suthakar, Shireen Tang, Nitin Yadav
Conference Proceedings | 2020 | SSRN Electronic Journal
We study how markets help spread knowledge about solutions to the standard but computationally hard problem of maximizing value ov..
Separating Probability and Reversal Learning in a Novel Probabilistic Reversal Learning Task for Mice
Jeremy A Metha, Maddison L Brian, Sara Oberrauch, Samuel A Barnes, Travis J Featherby, Peter Bossaerts, Carsten Murawski, Daniel Hoyer, Laura H Jacobson
Journal article | 2020 | Frontiers in Behavioral Neuroscience
The exploration/exploitation tradeoff – pursuing a known reward vs. sampling from lesser known options in the hope of finding a be..
Is Hardness Inherent In Computational Problems? Performance Of Human And Digital Computers On Random Instances Of The 0-1 Knapsack Problem
Nitin Yadav, Carsten Murawski, Sebastian Sardina, Peter Bossaerts
Conference Proceedings | 2020 | Proceedings of 24th European Conference On Artificial Intelligence
Perception of intentionality in investor attitudes towards financial risks
Peter Bossaerts, Shinsuke Suzuki, John P O'Doherty
Journal article | 2019 | Journal of Behavioral and Experimental Finance
Traditionally, financial market participation has been treated as analogous to playing games of chance with a physical device such..
Uncertainty and computational complexity
P Bossaerts, Nitin Yadav, Carsten Murawski
Journal article | 2018 | Philosophical Transactions of the Royal Society B: Biological Sciences
Modern theories of decision-making typically model uncertainty about decision options using the tools of probability theory. This ..
Behavioral contagion during learning about another agent’s risk-preferences acts on the neural representation of decision-risk
P BOSSAERTS, S Suzuki, E Jensen, J O'Doherty
Journal article | 2016 | Proceedings of the National Academy of Sciences
Our attitude toward risk plays a crucial role in influencing our everyday decision-making. Despite its importance, little is known..
From behavioural economics to neuroeconomics to decision neuroscience: The ascent of biology in research on human decision making
P Bossaerts, C Murawski
Journal article | 2015 | Current Opinion in Behavioral Sciences
Here, we briefly review the evolution of research on human decision-making over the past few decades. We discern a trend whereby b..
Displaying the 3 most recent news articles by Peter Bossaerts.
Honours, Awards and Fellowships
FASSA - Fellow of the Academy of the Social Sciences in Australia
NOTINLIST - Not in List