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Research

Research at The Linde Institute currently focuses on three areas: finance, entrepreneurship, and the intersection of economics and computer science.

To foster research, The Linde Institute provides seed funding for projects, experiments, seminars, and conferences, as well as other forms of support. Read below for more information on the three areas of research focus.

Finance

Linde Institute researchers study the economics, mathematics, and behavior of finance. They use their theoretical and technical expertise to analyze large financial data sets, trading algorithms, and high-frequency trading. For example, some have analyzed how computer algorithms that use high-frequency trading strategies affect transaction prices. Other researchers focus on the design and regulation of markets, financial networks, and the flow of information in markets. Another major strength is research in behavioral neuroeconomics, where psychology and neuroscience are used to gain insight into markets, risk-taking, and other economic decisions.

In September 2013, The Linde Institute sponsored a workshop entitled “Conference on Bayesian Methods in Microeconometric Modeling,” organized by Assistant Professor of Economics Ben Gillen, to bring together researchers working to develop and apply Bayesian methods to problems in industrial organization and quantitative marketing such as discrete choice, demand estimation, and inference in strategic models. Speakers included Lane Burgette, associate statistician, RAND Corporation; Andriy Norets, associate professor of economics, Princeton; and Jason Roos, professor of marketing management, Rotterdam School of Management, among others.

Please click here to learn about finance faculty and seminars at Caltech, and here for information on the 2015 Caltech + Finance symposium.

Entrepreneurship

The entrepreneurial firm plays an important role in economic growth and innovation. Linde Institute researchers use methods from both economics and finance to study the behavior and financing of entrepreneurial firms. In one stream of research, the individual’s choice to become an entrepreneur is studied in the context of employment mobility. Another research focus is on the raising of capital for small, high-growth entrepreneurial firms, which is a challenge often solved with venture capital and angel investment. Understanding how this capital matches with entrepreneurial firms and how it impacts performance is an important area for both entrepreneurs and policy-makers.

Existing entrepreneurship research often faces data constraints when approaching these issues. Linde Institute researchers attempt to overcome these data limitations through large-scale automated data collection and web scraping. For example, Linde Institute researchers are currently building a database of survival rates for US-based inventive startups. These data provide a platform to answer new questions about the formation and productivity of entrepreneurial firms.

Economics and Computer Science

Technology is now an inseparable part of modern society. The interplay of computational, economic, and social systems is a central component to strategic decisions by individuals, firms, and organizations. This interconnection matters in the design and analysis of markets and non-market exchange mechanisms, and it also matters to how our information infrastructure evolves. Linde Institute researchers study the consequences of these interactions between economics and computer sciences and train the next generation to reason about this interface via the Social and Information Sciences Laboratory (SISL).

With faculty from Caltech’s Division of the Humanities and Social Sciences (HSS) working in tandem with colleagues in computation and neural systems (CNS) and computing and mathematical sciences (CMS), SISL provides a truly interdisciplinary environment to study how markets and other social systems function in a world in which economics can no longer be separated from the information and communication systems around us.  SISL faculty have published important and influential research in a variety of areas at the boundary of economics, computation, and engineering such as privacy, electricity markets, and social networks.

To learn more about SISL, its faculty, and its events, please click here.