Q&A with Camelia Kuhnen, a Poets and Quants '40 under 40' professor

Camelia Kuhnen, professor of finance in the Kenan-Flagler Business School, was named one of Poets and Quants’ best 40 under 40 professors in 2016. Kuhnen has a background in neuroeconomics and behavioral finance.

Staff writer Katie Rice sat down with Kuhnen to discuss her job and future plans.

THE DAILY TAR HEEL: Could you give me a brief explanation of what neuroeconomics is?

CAMELIA KUHNEN: It is a relatively new research field, which is combining insights from neuroscience and economics to make better sense of economic behavior, of how people make decisions that concern their finances, their labor market outcomes, their consumption choices and so forth.

DTH: And what is behavioral finance?

CK: Behavioral finance has been an effort to put together what we know from psychology and economics or finance to understand financial decision-making.

DTH: How did you become interested in the topics of neuroeconomics and behavioral finance?

CK: The fun thing about doing this sort of work is that you get asked questions that nobody has asked before. Before I did this work with the Stanford neuroscientist, Brian Knutson, nobody had known how the brain trades off risk and reward, when people have to decide what to do with their money ...

Or another example — this is another paper I did in 2009 with a different co-author — we wanted to know: By looking at a person’s DNA, can you predict something about how much financial risk they’re willing to tolerate? And in that paper from 2009 we borrowed some insights from the medical literature about pathological behaviors involving risk-taking ... So it’s fun! You get asked all kinds of interesting questions. And also, because I have this background in neuroscience, I get ideas about research projects that are of interest to the general population of economists out there, even those who really don’t care about the brain.

DTH: How do you combine your research in neuroscience and behavioral finance with what you teach at the business school?

CK: I get to teach these students about the very basics of financial decision-making, or how you’d value an idea or a project. While that can be done in a very dry or mathematical way, there’s also room in that course to bring up neuroeconomics ... I think that none of them expect to see a brain picture on one of the slides in their required finance class. They probably expect a pretty dry and mathematical treatment of finance. So when I bring in neuroeconomics, they appreciate it.

DTH: What are your goals for the future?

CK: I’ve realized as an academic how difficult it is to do work that is interdisciplinary. I also think that some of the most interesting findings that we can come up with as scientists will be at the intersection of disciplines ...

So my goal for the foreseeable future is to continue to do this kind of work, and to try to push for more acceptance of this work ...

When I first became a professor in 2006, I was on this neuroeconomics path. I took it, and I knew exactly what I was doing, and I knew that it was super risky because I was going to write papers that combined two fields. I knew it would be very hard to publish this work, but I thought it was important and I did it anyway. I took a lot of risk that could have easily backfired. It’s important for young researchers to be told by their departments and universities that it is actually okay to pursue this type of work. Risk-taking should be encouraged. To be a true scientist is to have a very, very open mind.

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