With 463,150 euro the German Research Foundation (Deutsche Forschungsgemeinschaft, DFG) funds the research project “Municipalities and their Expecations on Pay-Offs of Swap Deals”. The project is part of the DFG priority programme “Experiences and Expectations: Historical Foundations of Economic Behaviour”.  Together with a postdoctoral researcher and a doctoral researcher, Christine Trampusch will investigate local authorities’ expectations on swap deals. State and local governments have used derivatives in their public debt management since the mid-1980s but the outcomes of these practices have not always been positive. Significant losses from the use of these financial investments have hit the headlines in past decades: Orange County and the State of West Virginia in the USA, the London Borough of Hammersmith and Fulham in the UK, and the municipalities Hagen and Dortmund in Germany are only some examples of major losses resulting from the use of derivatives instruments. Christine Trampusch’s team will examine expectations which local treasurers have when they conduct swap activities through case studies of selected swap deals in the U.S., U.K., and Germany between the early 1980s and 2014. The project aims at a synthesis of theoretical insights from political science, economic sociology, and behavioral economics in order to enhance our understanding of changing expectations and financial practices in the public sphere. The project is approved for three years and will start in February 2016.