Prof. Sven Rady, PhD

Hausdorff Chair

E-mail: sven.rady(at)
Phone: +49 228 73 62080
Fax: +49 228 73 62086
Institute: Department of Economics
Research Areas: Research Area B1
Research Area C2

Academic Career

1982 - 1989

Studies in mathematics and physics at the universities of Konstanz, Bonn, Paris VII (France)


Diploma in Mathematics, University of Bonn

1990 - 1991

European Doctoral Program in Quantitative Economics, University of Bonn

1991 - 1995

European Doctoral Program in Quantitative Economics, London School of Economics, England, UK

1994 - 1996

Lecturer in Economics, London School of Economics, England, UK


PhD in Economics, London School of Economics, England, UK

1996 - 1999

Assistant Professor of Economics, Graduate School of Business, Stanford University, CA, USA; promotion to untenured Associate Professor in 1999, on leave 1999 - 2001

1999 - 2011

Professor of Economics, LMU Munich

Since 2011

Hausdorff Chair for Mathematical Economics (W3), University of Bonn

Research Profile

My research is concerned with the dynamics of individual decisions and the resulting equilibrium processes when economic agents are uncertain about the environment in which they operate and can learn about it through experimentation. Particularly interesting dynamics arise from informational spillovers between the agents. Examples are research teams, R&D alliances between firms, or open source projects. Generalizing classic models of optimal sequential choice of experiments, I consider multiple agents who face identical two-armed bandit problems and observe each other’s actions and payoffs. While it is natural to use the posterior belief about these characteristics as the state variable for Markov perfect equilibria ([1], [2], [3], [4]), in current work I investigate the consequences of allowing for non-Markovian behavior.

While I will continue to investigate multi-agent bandit problems in my future work, I will put stronger emphasis on payoff externalities and market interactions. Building on [3], I intend to address more general correlation structures between the characteristics of the different agents’ risky projects. Using the methods developed in [5] and [6], I plan to study experimentation with restless bandits whose characteristics change stochastically over time, so that there is an incentive to learn even in the very long run. Further research into the dynamics of two-sided market platforms with cross-group externalities will build on [7]. More broadly, I plan to investigate information aggregation in large decentralized markets where information is dispersed and participants search and learn at the same time.

Research Projects and Activities

DFG Collaborative Research Center SFB/TR 15 “Governance and the Efficiency of Economic Systems”
Project leader for two projects:

1. “Incomplete Markets, Market Interactions and Social Comparisons”, 2004 – 2011
2. “Strategic Acquisition and Transmission of Information”, 2008 - 2015

DFG Cluster of Excellence “Hausdorff Center for Mathematics”
Principal investigator (since 2012) and member of the Board of Directors (since 2013)

DFG Collaborative Research Center SFB/TR 224 “Economic Perspectives on Societal Challenges: Equality of Opportunity, Market Regulation, and Financial Stability”
Project leader for two projects:

1. “Decentralized Markets”
2. “Platform Markets”

Selected Publications

[1] Godfrey Keller, Sven Rady, Martin Cripps
Strategic experimentation with exponential bandits
Econometrica , 73: (1): 39--68
DOI: 10.1111/j.1468-0262.2005.00564.x
[2] Godfrey Keller, Sven Rady
Strategic experimentation with Poisson bandits
Theor. Econ. , 5: (2): 275--311
DOI: 10.3982/TE595
[3] Nicolas Klein, Sven Rady
Negatively correlated bandits
Rev. Econ. Stud. , 78: (2): 693--732
DOI: 10.1093/restud/rdq025
[4] Godfrey Keller, Sven Rady
Theor. Econ. , 10: (1): 175--202
DOI: 10.3982/TE1670
[5] Godfrey Keller, Sven Rady
Optimal experimentation in a changing environment
Rev. Econom. Stud. , 66: (3): 475--507
DOI: 10.1111/1467-937X.00095
[6] Godfrey Keller, Sven Rady
Price Dispersion and Learning in a Dynamic Differentiated-Goods Duopoly
RAND J. Econ. , 34: (1): 138--165
Publisher: JSTOR
[7] Martin Peitz, Sven Rady, Piers Trepper
Experimentation in Two-Sided Markets
J. Eur. Econ. Ass. , 15: (1): 128--172
[8] François Ortalo-Magné, Sven Rady
Housing market dynamics: on the contribution of income shocks and credit constraints
Rev. Econom. Stud. , 73: (2): 459--485
DOI: 10.1111/j.1467-937X.2006.383_1.x
[9] Paul Heidhues, Sven Rady, Philipp Strack
Strategic experimentation with private payoffs
J. Econom. Theory , 159: (part A): 531--551
DOI: 10.1016/j.jet.2015.07.017

Publication List

RePEc Publication List (external link)


• Review of Economic Studies (Associate Editor, 2000 - 2007)
• Berkeley Electronic Journals in Theoretical Economics (Associate Editor, 2006 - 2010)
• Berkeley Electronic Journals in Theoretical Economics (Co-Editor, 2010 - 2013)
• Journal of Mathematical Economics (Co-Editor, 2013 - 2019)
• Mathematics of Operations Research (Associate Editor, 2016 - 2018)


1983 - 1988

Scholarship, Studienstiftung des Deutschen Volkes

1991 - 1992

Grant for doctoral studies abroad, German Academic Exchange Service (DAAD)


Research Scholarship, COLONIA Scholarship Foundation (Germany)

1993 - 1994

Graduate Fellowship, Economic and Social Research Council of the UK


Participant in the Review of Economic Studies May Meetings (Brussels-London-Toulouse) with paper “Optimal Experimentation in a Changing Environment”


Teaching Award of the State of Bavaria

2008 - 2010

Research Professorship at the University of Munich under the auspices of GRK 801 (10/2008 - 03/2009) and LMUexcellent (04/2009 - 09/2010)

Selected Invited Lectures


Minicourse “Strategic Experimentation”, Yonsei University, Seoul, South Korea


Minicourse “Strategic Experimentation”, University of Texas at Austin, USA


Semi-plenary talk, International Conference on Game Theory, Stony Brook, NY, USA



Goethe University Frankfurt


University of St. Gallen, Switzerland

Selected PhD students

Markus Reisinger (2004): “Three Essays on Oligopoly: Product Bundling, Two-Sided Markets, and Vertical Product Differentiation”,
now Professor, Frankfurt School of Finance & Management

Ferdinand von Siemens (2004): “Inequity Aversion and Incentives: Three Essays in Microeconomic Theory”,
now Professor, University of Frankfurt

Nicolas Klein (2010): “Learning and Experimentation in Strategic Bandit Problems”,
now Associate Professor, University of Montreal, QC, Canada

Jan Knoepfle (2020): “Essays in Microeconomic Theory”,
now Postdoc, Aalto University, Helsinki, Finland

Supervised Theses

  • Master theses: 19
  • Diplom theses: 101
  • PhD theses: 12
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