Portrait of Vladimir Novak

Vladimír Novák: My Research as a Postdoc at Universita Bocconi

One of our recent graduates, Vladimír Novák, has already achieved a great deal in the field of economic research. Last year, Vladimír successfully defended his dissertation under the supervision of Filip Matejka and lent his hand to participate in the IDEA Anti COVID-19 initiative, which issued many studies on matters related to the coronavirus outbreak. How has his research focus shifted after he joined the team of professor Eliana La Ferrara (former president of European Economic Association and 2020 recipient of Brigid Grodal Award for the best European-based female economist) at Universita Bocconi? What are his current research projects? We asked Vladimír several questions for our blog interview.

“I feel very fortunate that after being supervised by Filip Matejka during my PhD studies, I again have an opportunity to work closely with an extraordinary scholar, this time with Eliana.”

Since September 2020, you have been a Postdoctoral Researcher at Universita Bocconi in Milan. How would you evaluate your first months in this position? 

These first several months have been exciting and inspiring, but also demanding. My postdoc position is associated with the ERC Grant of Eliana La Ferrara titled Aspirations Social Norms and Development. Thus, I feel very fortunate that after being supervised by Filip Matějka during my PhD studies, I again have an opportunity to work closely with an extraordinary scholar, this time with Eliana. However, in contrast with my CERGE-EI experience, I am now involved in a research team that focuses mostly on development economics, which allows me to gain a lot of inspiration for my research and deepen my knowledge as it wasn’t my primary field of expertise. At the same time, it challenges me daily to question many things I have taken as obvious given being previously mostly surrounded by researchers focusing on behavioral and information economics; and I am also trying to improve my skill to explain my research to a broader spectrum of economists.
Vladimír at the Lindau Nobel Laureate Meetings in Germany
What from your CERGE-EI studies has helped you the most in Milan?

I think that an academic's essential skill is the ability to ask big vital questions and simultaneously approach them in a novel and elegant way. Thus, I like to believe that during my CERGE-EI studies, I improved substantially in this direction, but this is a never-ending challenge. Also, I think that I benefit from knowing how to extract the essential bits and pieces from a critique and how to motivate myself.
In your research, you focus also on rational inattention. Can you tell us more about your findings in this area?

My main output in the area of rational inattention to this day is a paper: “The Status Quo and Belief Polarization of Inattentive Agents: Theory and Experiment” that is co-authored with Andrei Matveenko (University of Copenhagen) and Silvio Ravaioli (Columbia University). We show that rational but inattentive agents can become polarized, even in expectations. This is driven by agents’ choice of how much information to acquire and what type of information. We present how optimal information acquisition, and subsequent belief formation, depends crucially on the agent-specific status quo valuation. Moreover, we designed and ran a laboratory experiment that confirms our predictions about the mechanism (rational information acquisition) and its effect on beliefs (systematic polarization). We have recently made a paper available in the IGIER Working Paper series, so anyone interested, please go and read the paper. 

Another project of mine in this area, but still a work in progress, focuses on estimating macroeconomic models with rationally inattentive agents. I compare the performance of a rational inattention DSGE model with an imperfect common knowledge model and a model with price stickiness à la Calvo. The findings show that the rational inattention model matches the data better than the Calvo model and reproduces the persistence more easily than the imperfect common knowledge model. 

What are your other research projects?

Apart from rational inattention, I have focused my research on multi-armed bandits/strategic experimentation. I have published two papers in this area. The first paper, “Scheduling of Multi-class Multi-server Queueing Systems with Abandonments,” was co-authored by Urtzi Ayesta (CNRS, Toulouse) and Peter Jacko (Lancaster University), published in 2017 in the Journal of Scheduling, fits mostly to the Operational research area. We propose there a new scheduling rule for queuing systems in which customers may abandon, that is, the restless case of multi-armed bandits. The second paper, “A Note on Optimal Experimentation under Risk Aversion,” co-authored with Godfrey Keller (University of Oxford) and Tim Willems (IMF), published in 2019 in the Journal of Economic Theory, studies the two-armed bandit case with risk aversion. We show, counterintuitively, that a more risk-averse decision-maker might be more willing to take risky actions. This finding gives reason for caution when inferring risk preferences from observed actions. In an environment where there might be scope for experimentation, observing a greater appetite for risky actions can indicate more risk aversion, not less.

In addition, as I have mentioned previously, I am currently working mostly on the theoretical modeling of aspirations. I hope that I will soon be able to tell you more about my new results in this area.

You joined the IDEA anti Covid-19 project that was launched by CERGE-EI’s think tank IDEA to provide expert ideas and recommendations to mitigate the negative economic effects of the pandemic. Can you briefly sum up your recommendations?

Yes, I was active in the IDEA anti Covid-19 project at the very beginning in March and April, before I left CERGE-EI. At that time, I was involved in one project that quickly tried to translate the first findings and recommendations from the world into Czech to help with the kick-off of more expert-based discussion. Then, in another study, we looked more closely at how to communicate government crisis measures. Now, much more is known about the disease, the situation has evolved, and vaccinations have started, so my main recommendation would be to listen to the experts. For instance, several researchers from CERGE-EI are still very active in the development of new up-to-date recommendations.

This year, CERGE-EI celebrates 30 years from its founding. What do you perceive as the strongest message CERGE-EI gives to its students?

The message of resilience. Once you have the opportunity to meet with the community of people that helped to found CERGE-EI and you learn about their personal paths, how some of them became western-educated economists while there was still communism in Czechoslovakia, or why some of them joined efforts to help to create such an institution, even though at first glance they had nothing to do with Czechoslovakia, you understand more about all the challenges they and the institution had to overcome. Then you are just proud to be a part of that legacy, and you hope that when the time comes, you will be able to show such an act of courage, vision, and persistence.
Thank you, Vlado, for taking your time to chat with us!

 

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