Ateneo - UPO

Behavioral Economics increases the explicative power of economic theory by introducing more realistic psychological fundamentals. Object of the course is that of introducing the approach and methods of behavioral economics, with a particular attention to the experimental approach, analysing its main contributions and applications, and its new lines of research. The course will introduce the subject, its methodology, with particular attention to experimental economics.
It will survey the topics of: (1) Individual choices under risk and uncertainty. Expected utility Theory. The axiomatic approach. Expected utility in the Machina triangle. The main paradoxes of choice. Experiments and theoretical developments in non-expected utility theory. (2) Prospect Theory. (3) Intertemporal choice. (4) Elements of behavioural finance.

All the material will be distributed during the course.

Object of the course is that of introducing the approach and methods of behavioral economics, with a particular attention to the experimental approach, analysing its main contributions and applications, and its new lines of research.
The course will introduce the subject, its methodology, with particular attention to experimental economics.

Knowledge of quantitative methods at the introductory level

There will be lectures and exercises

Written exam with exercises

Individual choices under risk and uncertainty. Expected utility Theory. The axiomatic approach. Expected utility in the Machina triangle. The main paradoxes of choice under risk. Experiments and theoretical developments in non-expected utility theory. Prospect Theory.
The main paradoxes of choice: framing effect, preference reversal, endowment effect.
Elements of behavioural finance.

To provide a knowledge of the economy in an interdisciplinary perspective, highlighting its relations with psychology