Behavioral and Experimental Economics

Purpose of the course The course introduces to developments in experimental economics and in behavioral models of decision making. It also aims at teaching how to run experiments in the lab.
The course has two parts. The first part deals with individual behavior and its experiemntal study. Applications to marketing, finance and organizational behavior are developed.
The second part reconsiders basic concepts of strategic interaction in game theory in the light of the experimental evidence on interactive behavior and explores alernative behavioral models of interactive strategic choice. Applications to negotiation, labor contracts, trust and incentives are developed.

Prerequisites Students are expected to have basic notions of expected utility theory and some familiarity with the basic concepts of game theory.

Part I: Individual behavior
• Expected utility: biases and violations
• Bias in probabilistic reasoning
• Time and decision making
• Some alternatives to expected utility. Prospect theory; Regret theory; Experimental evidence on non-EU models.
• The allocation of attention
• Applications: consumer behavior, investor behavior, medical decision making; policy implications of behavioral analysis ...
Intermezzo: runing lab experiments
Part II: Interactive decision making
• Strategic reasoning in games and its critique. (Dominance and iterated dominance; Backward induction and sub-game perfect equilibria).
• A model of bounded rationality with limited reasoning steps: the “Cognitive Hierarchy” model
• Learning in interaction
• Motivation and fairness. Inequality aversion. Fairness equilibria. Cooperation in public goods and in the commons.
• Applications: bargaining; understanding labour contracts; market entry; trust; incentives

The teacher will distribute a readings package at the beginnign of the course.

Evaluation will be based on class participation (20%), a written exam (40%) and an experiemntal project (40%)

Teaching method There will be fifteen lectures on experimental methods and results, and basic models of behavioral economics; the course will include laboratory sessions to introduce students to experimental practice. Studnets will have to design and run an experiment.

English

Accessibility, Disability and Inclusion
Accommodation and support services for students with disabilities and students with specific learning impairments

Ca’ Foscari abides by Italian Law (Law 17/1999; Law 170/2010) regarding support
services and accommodation available to students with disabilities. This includes students with
mobility, visual, hearing and other disabilities (Law 17/1999), and specific learning impairments (Law 170/2010). If you have a disability or impairment that requires accommodations (i.e., alternate testing, readers, note takers or interpreters) please contact the Disability and Accessibility Offices in Student Services: disabilita@unive.it.

written and oral