Backbone is the corporate magazine of Erasmus School of Economics Published three times a year, once in print and twice online, the magazine highlights successful and interesting alumni, covers the latest economics trends and faculty research, and reports on school news, events, and student, faculty, and alumni accomplishments.
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Publication Erasmus School of Economics, Erasmus University Rotterdam Editors Ronald de Groot, Naomi Graafland, Henk Goris, Yrla van de Ven, Aleksandra Stuip, KrisKras context, content and design Concept, design and realization Kris Kras context, content and design Illustrations Carolyn Ridsdale Photography & Video Rotterdam Branding Toolkit, Kees Stuip Fotografie, Sophia van den Hoek, Marc Heeman, Daarzijn, Rien Bexkens, Koala Koncepts, Eric van Vuuren
Stories & Opinions
The impact of higher education and research on society, and the interchange between science and everyday life and vice versa, is a well-established and essential aspect of Erasmus School of Economics. The School focuses on making tangible contributions to society, such as support of and advice to governments and businesses and by translating newly obtained knowledge into innovative applications with economic and social benefits.
In order to achieve current and future goals, Erasmus School of Economics needs a continuous supply of talent. The School has effective recruitment strategies, such as the Research Traineeship Programme. The objective of this programme is to give a select group of third-year Bachelor’s students from non-western backgrounds the opportunity to acquaint themselves with academic research and build a career in academia.
Professor of Economic Education
‘The "eternal student" has become rare on campus'
Economics education on the move
The past decade has witnessed huge changes at Erasmus University Rotterdam and Erasmus School of Economics. Some are outward, such as our stunning new campus, which has not only become more beautiful but also much more lively. More importantly, the people and the educational programmes have also changed.
Ten years ago, Erasmus School of Economics welcomed the first international bachelor students in its new International Bachelor in Economics and Business (IBEB) programme. In 2012, this was followed by the successful start of the International Bachelor in Econometrics and Operations Research. In just ten years, the population of international bachelor students at Erasmus School of Economics has grown from scratch to almost 600. Together with the increase in international staff, this has transformed Woudestein campus into a true international learning environment.
A second major change is that the current generation of students likes to be challenged and puts in more than a minimum effort. Over 10% of our bachelor students follow a double degree programme. In addition to the well-established Economics and Law programme, Erasmus School of Economics started the international double degree programme in Econometrics and Economics in 2013. This very demanding programme now welcomes more than 50 students each year. Finally, in 2015 the School introduced the international double degree programme in Economics and Philosophy in collaboration with the Faculty of Philosophy. Student completion rates have also strongly increased. The share of students earning their bachelor's degree in three years (the nominal duration) has increased from 26% in 2006 to 47% for the latest cohort (percentages apply to first year survivors). Four-year completion rates have also increased from 50% in 2006 to over 70%. The “eternal student” has become rare on Woudestein campus.
Last but not least, Erasmus School of Economics strives to continually improve its educational programmes. In the past decade, the exciting field of Behavioural Economics was given a prominent and permanent place in our bachelor’s programme and in our master’s portfolio. This has been quite successful, as currently more than 80 students choose Behavioural Economics as their master’s specialisation. In terms of educational innovation, a major milestone was reached in 2015 with the completion of the Massive Open Online Course (MOOC) in Econometrics which is accessible worldwide through the Coursera platform. Produced by our Econometrics Department, this was the very first MOOC offered by Erasmus University Rotterdam. A major investment programme aimed at stimulating educational innovation and improving the quality of small-scale learning is currently under way. I expect these developments to continue in the coming years. Erasmus School of Economics will pursue its efforts to attract ambitious students from all over the world, challenging them to make the most of their studies, and to improve educational quality. We do this with a single aim in mind: to be the number one choice for the most talented and ambitious students who want to lay a solid foundation for an inspiring career in economics or econometrics.
Philip Hans Franses
Dean Erasmus School of Economics
'One of the great benefits of being an academic is that thinking is free'
When does peak creativity occur?
One of the great benefits of being an academic is that thinking is free, and that one can wonder freely about everything we see around us. And so it occurred to me that I got interested in when people seem to perform best in their lives.
It started with a discussion with colleagues with as main message that if you did not yet have written your best and most cited paper, then chances are very low that you will ever receive a Nobel prize. Indeed, most Nobel laureates in economics seem to have put forward their most important piece shortly after PhD graduation, or at least in their early thirties. Similar insights seem common wisdom across other academic disciplines.
Now, and this is what I wondered, would this also hold for artists? Being an amateur painter myself, without having much success in selling any of my work (well, 0, actually), and thus hoping that the better part is still to come, I was curious to learn when famous painters would have created their master piece.
Defining a master piece as that particular work that was the most expensive ever at auctions, I could collect the dates of their creation for 189 painters. Comparing their age at the time of the master piece with their birth year, I found that the average age of creation was 41.9 years. But, I recognized, this average age is not that much of interest, as perhaps many painters would already have died by then. So, I decided to look at the master piece creation year relative to a full life span (which seemed that no one has ever done before!). That is, if someone became 36 years old, and the best work was created at age 27, then the fraction would be 0.75. Now, and here is the interesting result, the average fraction for these 189 painters turns out to be 0.620, a number which is very close to the golden ratio (0.618).
What happened next was also unexpected to me. First, a leading journal in the area, Creativity Research Journal wanted to publish my results. Next, when it got published, it received an overwhelming amount of media attention, including for example the Scientific American. Some journalists, by the way, misunderstood the results by stating that if they were still to make their best work when they would become 60, that they then would live until the age of 60/0.618 = 97 years. But of course, that is a reversal of the outcomes. Finally, people asked me whether this would also hold for other creative activities?
So, I collected the relevant observations for 89 Nobel laureates in Literature, where the reports of the Noble committee could be used to discern the most Nobel worthy book or poetry. And quite similarly, the average age is 44.8 years, and fraction in life is 0.570. I also collected the same type of data for 100 classical composers, where the work that is most often performed is used as an indicator of the peak master piece. For the composers, peak creativity occurs around 38.9 years and the fraction is 0.613 (remarkable!). Both studies appeared in the same academic journal, by the way.
Now, one may wonder, why is it that we find that creative people peak around 40 and at a fraction 0.6 of their lives? The first number might perhaps be associated with the fact that people’s cognitive skills peak around 40, and start to slow down thereafter. For the fraction 0.6, however, I really have no idea. So, this makes me wondering again…..
Former Head Dean's Office and P&O
‘Research is one of the driving forces behind the Dutch economy'
In 2010, Erasmus School of Economics started the Research Traineeship. Saskia Krijger, initiatior of the traineeship programme: “The objective was to give a select group of Bachelor-3 students with a migrant background the opportunity to acquaint themselves with academic research and to demonstrate that they are fully capable of an academic career. Although around one-third of our students have a migrant background, very few of them take on a PhD or apply for jobs in academia. This means that Erasmus School of Economics is missing out on a huge pool of talent.”
Laila Kakar: Master's degree in Econometrics, currently a working student at PwC
Thanks to my good marks in my third year, I was offered the opportunity to take part in the traineeship programme. The idea appealed to me, but to be honest, I had some doubts at first. I was not quite sure yet which direction I wished to explore. Since I valued any opportunity to develop my personal skills, I decided to take part in the programme anyway. Prior to the programme, Saskia Krijger looked carefully at both the personality and needs of the students, and paired them up with the most suitable coach. It was important for me to have the freedom to come up with my own ideas and be paired up with someone who challenged me. Professor Commandeur was the perfect match. Thanks to him, I learned to enjoy writing papers, and engage in research. He was more than just a supervisor to me; he became my personal coach. He encouraged me to get some work experience as a data scientist with a start-up while still an undergraduate, and to do a post-graduate internship with NIBC Bank.
Take the opportunities you get
Due to my Afghan background, I had a smaller network in the business field than most other students. Thanks to the traineeship programme, I have been able to build up my own network. Take the opportunity and do not be afraid to approach companies. By now I have completed my Master’s degree in Quantitative Finance and I am applying for jobs. I am still not entirely certain which direction I wish to explore. There are so many things I find interesting. In any case, my future job will have to be something I fully support. I want my work to have an impact.”
Emre Karali: Master’s degree in Business Economics, currently doing a PhD
My parents have encouraged me to obtain high marks ever since I was a child. After my parents had moved from Turkey to the Netherlands, they did not have the opportunity to go to university, which is exactly why they wanted me to have a proper career. We fought for my career together. For two years I travelled daily from Enschede to Rotterdam for my studies, with the support of my parents. I used to think I would enter the business community, but I changed my mind thanks to the traineeship programme, which opened my eyes to the world of science. I learned that the field of research affords many opportunities as well. Research is one of the driving forces behind the Dutch economy, and I love the idea of being allowed to contribute to that. In addition, as a researcher you get the opportunity to talk directly to managing directors or managers. People who first enter the labour market are unlikely to find themselves in that position.
This being the case, I applied for a PhD position after obtaining my Master’s degree. Despite the fact that there were only a limited number of positions, which were subject to strict requirements, I managed to get a spot. My family is very proud, partly because of the status upgrade involved. I will never forget my parents faces when they heard the news. My research focuses on how companies can achieve and maintain competitive advantage. I am trying to determine why some companies, such as Google and Apple, manage to successfully change tack, while other companies, such as Nokia, do not. The great thing about doing a PhD is that you can combine science and business. So in a way, I did not have to choose between a position with a company and a PhD. I am getting both now.”
'Ambitious entrepeneurs can use fear of failure as a fuel for success'
Fear of failure, a key to success?
Fear of failure is a well known feeling to many of us, whether it occurs because of an exam or while giving an important presentation. Entrepreneurs are no exception here: entrepreneurial choices can be dominated by fear of failure.
By many, fear of failure in entrepreneurship is seen as an obstacle to be overcome. For example premier Rutte in his Koning Willem 1 lezing on October 1, 2015 calls on Dutch entrepreneurs to be less fearful and take example in their American counterparts. But there are also voices that describe fear of failure as a powerful motivator. Will Smith, actor, musician and entrepreneur, when asked about the key for his success turns the conversation to failure. "I've always had a horrible fear of not achieving …" he told Parade magazine. "All it takes is just one person telling me I can't do it, and I'll use the fear of failure as fuel." Which view is the correct one? Or more precisely, under which circumstances can fear of failure indeed be a motivator?
I argue that fear of failure may be seen and analyzed as a form of loss aversion. For those experiencing such fears, losses (i.e. failures) weigh more heavily than gains (i.e. successes), both of which are measured relative to some reference point. This reference point represents a would-be entrepreneur’s aspiration level for achieving success.
There are two important entrepreneurial decisions to consider. Potential entrepreneurs decide first whether to enter into risky entrepreneurship or opt for a safe employment wage. In a second step, they choose the intensity of investment into their ventures, which can be seen as the actual monetary investments but also investments in terms of working hours. These investments, together with random factors such as luck as well as the level of competition determine the chances of success of each venture.
Considering fear of failure through the lens of loss aversion, we find that while the effect of fear of failure on entry decisions is unambiguously negative, i.e. higher fear of failure discourages entry into entrepreneurship; its effect on entrepreneurial investment is ambiguous and depends crucially on the reference point. Ambitious entrepreneurs with high aspiration levels invest more aggressively with an increase of fear of failure, while entrepreneurs with low aspirations decrease investments as they become more fearful. Thus, while fear of failure is indeed often an obstacle to be overcome, ambitious entrepreneurs can use fear of failure as a “fuel” for success.
The reason that the effect of fear of failure on investment decisions is ambiguous comes from the dual effect that an increase in fear of failure has on investment incentives. On the one hand an increase in fear of failure increases the perceived cost of investment, which depresses incentives to invest. On the other hand, failure becomes more painful, increasing incentives to invest and thereby avoid failing. Entrepreneurs holding high aspirations find failure exceptionally painful, so the latter effect dominates. For entrepreneurs with lower aspirations, the former dominates.
These insights have important implications for the evaluation of fear of failure in entrepreneurship. Viewing fear of failure as a universally bad trait, as premier Rutte seems to suggest, may be too short-sighted. While conquering entrepreneurial fears will lead to more entrepreneurial entry, entrepreneurial investments may well decrease as a consequence, if entrepreneurs carry high aspirations. The effect of this interaction between aspirations and fear of failure on investment represents a novel testable prediction that will hopefully be at the focus of future studies. Indeed, an empirical analysis of fear of failure that fails to account for the reference point will be misspecified and thus produce misleading results.
This opinion article is based on a paper co-authored with John Morgan (University of California, Berkeley), titled “Aspiring to Succeed: A Model of Entrepreneurship and Fear of Failure” (Journal of Business Venturing).