BEHAVIORAL ECONOMICS

1. Knowledge and understanding

The course aims to build consciousness on the roots of complexity in human behaviors, with reference to their consequences on dynamic perspectives of economic relations. Main contributions of related literature will provide the methodological approach to understand socio-economic relations, by comparing theoretical models and empirical data.

2. Applying knowledge and understanding

The course will analyze both the micro- and the macro-economic perspective, by underlining, respectively, the behavioral approach in the individual choice paradigm. An essential introduction to agent-based modelling will be given, as one of the most adequate tools of analysis in the field.

3. Making judgements

The course will provide students with adequate abilities to reconcile appropriate modelling structures with socio-economic problems at hands. 

4. Communication skills

The course has an experimental nature. It deals with borderline topics and non-standard approaches for economic analysis. Therefore, a specific effort will be done to help students learning the appropriate terminology and the ability to discuss actual aspects of studied concepts. 

5. Learning skills

The course will be a starting point more than a consolidated set of results. All teaching materials, references and presented topics will create a toolbox for many possible future developments, for both further studies and professional applications.

Lectures. 

Although a formal pre-requisite is not required, students are firmly suggested to recap Mathematics for Economics and Fundamentals of Economics.

Firmly suggested

The course aims to present the behavioral approach in the choice paradigm. Thus, the course will provide a broad introduction to the concept of rationality in economics and to the advances of modern literature related to the implementation of bounded rationality and behavioral approaches. The relevance of heterogeneity and interactions in economic models will be studied by means of agent-based models (ABM). 

M. Ogaki, S.C. Tanaka, Behavioral Economics, Springer, 2017.

Written exam. 

Discuss implications of a behavioral approach on the concept of rationality in economics

Explain why the Allais paradox occurs by using the decision weight function of prospect theory