In the first part of the course the key concepts -like bounded rationality, heuristics for complex choices, prospect theory, framing effect- will be introduced. The second part will be focused on a set of applications of this framework to traditional topics in economics as the saving decisions, the wage definition and its rigidity, the free riding and the public goods provision, the role played by incentives and punishment for economic behavior.
A selection of chapters of the following three textbooks:
1) Diamond, Peter, and Hannu Vartiainen, eds. Behavioral economics and its applications. Princeton University Press, 2007.
2) Cartwright, Edward. Behavioral economics. Vol. 22. Routledge, 2014.
3) Camerer, Colin F., George Loewenstein, and Matthew Rabin, eds. Advances in behavioral economics. Princeton University Press, 2004.
Learning Objectives
Students should be able to put in connection the behavioral approach with the neoclassical economic theory. This connection should include both the conceptual framework and the implications for the economic analysis, as well as the consequences in terms of policy. This competence should cover the key issues of economic behavior.
Prerequisites
The exam of microeconomics at the university degree is highly advised, togheter with one or two exams focused on statistical methods. The
course will be most fruitful for those students who have already some knowledge of decision and game theory or, alternatively, for those interested on policy evalutation methods.
Teaching Methods
Mainly lectures. Videos and broadcasts will be used. Seminar activities will be prepared by students and evaluated for the final marks.
Further information
No
Type of Assessment
The final evaluation will be differentiated according to the participation to the lessons by the student. In particular, for whom will follow the lectures by taking an active part, i.e. presenting a scientific paper selected by the teacher, the evalutation of the presentation weigh one-third of the final grade. Those who will not follow the lessons, it is required to present a written essay, to be delivered a week before the final examination, based on the readings suggested by the teacher. The final exam will be oral,
and its outcome weighs for the remaining two-thirds on the final grade.
The oral exam consists of three or four questions. To answer the questions the graphical analysis is necessary.
Course program
The course will be divided in two parts. The first one will introduce some key concepts like bounded rationality, heuristics for complex choices, prospect theory, framing effect. In presenting the main contributions of this strand of the economics literature, students will be introduce to the experimental methods. The second part will be focused on a set of applications of this framework to traditional topics in economics as the saving decisions, the wage definition and its rigidity, the free riding and the public goods provision, the role played by incentives and punishment for economic behavior.