The major goal of this course is to provide students with a better and more rigorous understanding of a number of economic and social phenomena that characterize contemporary advanced economic systems. Several important issues (including consumers' and investors' bounded rationality as well as the so called "happiness paradoxes") can be fruitfully analyzed through the lens of the major theoretical constructs and empirical findings (including experimental evidence) obtained in the last years within the framework of behavioural economics. These topics will be addressed through lectures as well as various forms of interactive teaching managed through the E-learning platform.
1. Introduction. What is 'behavioural economics'? Origins and methodology of behavioural economics. The two 'souls' of behavioural economics: bounded rationality and non-selfish rationality. Behavioural economics and experimental economics (lab experiments, field experiments and lab-in-the-field experiments).
2. Part One. From full rationality to bounded rationality. Decision making under certainty: preferences and utility. The major cognitive and behavioural biases. Judgment and decision making under risk and uncertainty. Cognitive biases and economic behavior. Dual Process Theories: System 1 and System 2. Framing effects, loss aversion, endowment effect, intertemporal choices and present-biased preferences. Opportunity costs, anchoring effects, money illusion and sunk cost fallacy. Default effects: evidence from organ donations. The relationship between rationality and emotions in economic decision making: neuroeconomic evidence. Law of small numbers, gambler's fallacy and hot hand fallacy. Policy implications, 'asymmetric paternalism' and 'nudge' agenda.
3. Part Two. From selfish rationality to non-selfish rationality. Standard game theory and behavioural game theory. Experimental evidence on 'social preferences'. Social norms and 'pluralistic ignorance'. Subjective well-being paradoxes within advanced economies.
"Economia Comportamentale. Guida alla Teoria della Scelta", E. Angner, Hoepli, 2017 (Chapters: 1, 2, 3, 5, 7, 10, 11, 12 and 13).
Further teaching materials will be provided online (e.g. papers from the website lavoce.info), through the E-learning service, within the specific webpage prepared for this course.
60-minute written exam, aimed at testing students' understanding of a number of economic and social phenomena that characterize contemporary advanced economic systems and that can be fruitfully addressed through the lens of the major theoretical constructs and empirical findings (including experimental evidence) obtained in the last years within the framework of behavioural economics. The exam will be based on a) multiple choice questions; b) an open question and c) an exercise based on behavioral game theory topics.
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