Stelios Kotronis

I am an economist working in the Risk & Financial Stability Department of the European Insurance and Occupational Pensions Authority (EIOPA). My work focuses on analysing financial market developments and risks related to insurance sector.

I am also a Honorary Professor in Economics in Durham University Business School and external member of Durham Research in Economic Analysis and Mechanisms (DREAM). The research group focuses on three prominent areas: a) Economic Design and Policy, b) Economic Behaviour in Dynamic Environments and c) Industrial Organization. 

I hold a PhD in Economics from the University of Southampton.

Contact details:

EIOPA - European Insurance and Occupational Pensions Authority

Westhafen Tower, Westhafenplatz 1

60327 Frankfurt am Main | Germany

Tel: +49 69 9511 19 729

Stelios[dot]Kotronis[at]eiopa[dot]Europa[dot]eu

RESEARCH

Research Interests

Role that uncertainty, information and bounded perception have on single- and multi-agent decision making, Information Aggregation, Insurance Economics, Game Theory.

Published Papers

•  Information Aggregation Under Ambiguity: Theory and Experimental Evidence, with Spyros Galanis and Christos A. Ioannou

          Review of Economic Studies

We study information aggregation in a dynamic trading model with partially informed and ambiguity averse traders. We show theoretically that separable securities, introduced by Ostrovsky (2012) in the context of Subjective Expected Utility, no longer aggregate information if some traders have imprecise beliefs and are ambiguity averse. Moreover, these securities are prone to manipulation, as the degree of information aggregation can be influenced by the initial price, set by the uninformed market maker. These observations are also confirmed in our experiment, using prediction markets. We define a new class of strongly separable securities which are robust to the above considerations, and show that they characterize information aggregation in both strategic and non-strategic environments. We derive several theoretical predictions, which we are able to confirm in the lab.

• Updating Awareness and Information Aggregation, with Spyros Galanis

        B.E. Journal of Theoretical Economics

The ability of markets to aggregate information through prices is examined in a dynamic environment with unawareness. We find that if all traders are able to minimally update their awareness when they observe a price that is counterfactual to their private information, they will eventually reach an agreement, thus generalizing the result of Geanakoplos and Polemarchakis [1982]. Moreover, if the traded security is separable, then agreement is on the correct price and there is information aggregation, thus generalizing the result of Ostrovsky [2012] for non-strategic traders. We find that a trader increases her awareness if and only if she is able to become aware of something that other traders are already aware of and, under a mild condition, never becomes aware of anything more. In other words, agreement is more the result of understanding each other, rather than being unboundedly sophisticated.

Working Papers

• The Cross-Sectional Risk Exposure of Insurance Companies (with Matteo Leombroni and Ciaran Rogers)

Using novel regulatory data from the European Insurance and Occupational Pensions Authority (EIOPA), we study the cross-sectional risk exposure of EU insurance companies using a factor approach.

• Insurance companies as shock absorbers in the mutual fund sector: contrarian investment behavior and market stabilizer (with Falko Fecht and Huiting XU)

We study the investment behavior of European insurance corporations with respect to mutual funds. We aim to identify how insurers react to distress in funds in which they own a stake, and whether they trade in the same or opposite direction compared to other investors.

• Designing Informative Securities for Dynamic Markets with Myopic and Ambiguity Averse Players

• Experiment on Information Aggregation Under Ambiguity