UCL is to establish a new Centre for the Study of Decision-Making Uncertainty with an initial $250,000 grant from the Institute for New Economic Thinking.
The new Centre will address the ongoing intellectual and policy challenges unleashed by the global financial crisis, and will be the first in the world to focus on why individuals and groups think and act in specific ways when faced with uncertainty.
Announced during the first international trip of new UCL President and Provost Professor Michael Arthur to the USA, the Institute for New Economic Thinking has also said that it will give $1 in additional funding for every $2 UCL raises from other donors towards the new Centre.The funding was announced at a high-level roundtable held at European bank BNP Paribas in New York City, organised by UCL in conjunction with UCL alumnus Mark Howard, Head of US Credit Analysis and Strategy at the bank’s offices in New York.
The event saw UCL alumni, friends and corporate partners from across the US gather to hear the thoughts of investor George Soros and former Governor of the Bank of England, Lord King of Lothbury, on the necessity of new economic thinking as the world economy recovers. The event was chaired by UCL President and Provost Professor Michael Arthur.
It will be headed by visiting Professor of Psychoanalysis at UCL, David Tuckett. Professor Tuckett has written extensively on financial markets and risk and the role of the unconscious and emotions in affecting financial decision making. In particular, the Centre will examine the social, psychological and neurobiological factors that affect decision-making in finance and elsewhere.
Professor Tuckett is already working with the Bank of England on several pilot projects, including new methods to measure risk building in financial institutions, similar to the kind which occurred before the financial crisis.
The Centre will also utilise Big Data to build a more accurate picture on a macro scale of financial decision making and sentiment. For example, Professor David Tuckett has recently led research analysing ten years of Reuters news reports about Fannie Mae, revealing a gradual but striking disconnect between conviction and ‘reality’.
The research has found that between 2005 and 2007, stories about Fannie Mae became relatively full of excitement and increasingly free of anxiety – share price and sentiment rose together despite the levelling out of actual house prices. This was followed in 2008 with a huge reversal in sentiment which also tracked declines in share prices. It is a revolutionary new approach to economics: systematically showing how narratives develop independently of the facts yet with very real consequences for financial markets.
Receive the Funding Newswire each Tuesday, our Policy Bulletin each Thursday, and news about bridging Europe’s east-west innovation gap twice a month in The Widening. 
A unique international forum for public research organisations and companies to connect their external engagement with strategic interests around their R&D system.