Grant for project on the integration of Finance and PPE (Philosophy, Politics, and Economics)

The interdisciplinary project titled ‘Integrating Finance and PPE: Research, Dialogue, and Teaching’ has received a Research Consortium Grant of $ 64,883.00 (€ 55,135.00) from the PPE Society, hosted at the University of North Carolina. Melissa Vergara Fernández, assistant professor at the Faculty of Economics and Business (FEB), is the principal investigator (PI). The team further includes Ekaterina Svetlova (University of Twente) and Ivan Boldyrev (Radboud University Nijmegen).

Project Overview

This interdisciplinary project combines insights from Philosophy, Politics, and Economics (PPE) to examine asset pricing, a pivotal area of modern finance. Asset pricing is concerned with how assets are valued, risks are assessed, future outcomes are discounted, and capital is allocated. Asset pricing models are integral to investors and firms in regulatory and risk management contexts. By examining the underlying assumptions of these models, the project aims to reveal their normative implications and influence on market practices.

Research Focus

The project will investigate how asset pricing models depend on specific assumptions about risk, uncertainty, and rational behaviour. These assumptions, which are often considered technical, have significant normative consequences. They influence which risks are taken, have an impact on the distribution of costs and benefits among actors and across time, and determine which forms of uncertainty are overlooked.

Objectives

The project seeks to expose the "normative architecture" of valuation and asset pricing, encompassing:

• Ethical commitments

• Methodological norms guiding modelling and evidence

• Practical and institutional norms embedded in market coordination.

By bridging the gap between technical work in finance and their normative aspects, the project offers a cohesive and comprehensive understanding of finance, transcending disciplinary boundaries.

Educational Component

Beyond its contribution to the literature, the project has an educational component aimed at fostering a coherent perspective in both finance and PPE teaching. The goals are twofold:

1. Develop reflective teaching modules for finance courses that integrate technically informed normative analyses of financial theory

2. Strengthen finance studies within PPE programmes

The project will facilitate discussions among finance and PPE scholars to explore the opportunities and challenges of integrating these topics in education.

Vergara Fernández is unequivocal about the project: “Philosophical reasoning is often treated as peripheral to economics and finance. My work is driven by the conviction that it is at the core of any scientific practice. This project further develops that conviction for asset pricing.”

The PPE Research Consortium

The Philosophy, Politics, and Economics Society is an international organization with the mission to encourage the interaction and cross-fertilization of three intellectual disciplines that are, in their history, deeply intertwined. The PPE Research Consortium advances PPE research that focuses on cultivating, dramatically expanding, and supporting a vibrant ecosystem of PPE scholars. In bringing together the analytical tools of the namesake disciplines, along with those of allied fields in the humanities and social sciences, the Consortium seeks to generate a robust repository of interdisciplinary research that aims to address society’s most pressing issues.

Questions? Please contact Melissa Vergara Fernández.