Behavioral and Experimental Economics

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.

Students are expected to develop an understanding of behavioral models and experimental tools, and to develop applications to management issues.

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

Intro. Thinking about utility. The strategy of paradoxes: Allais.
More paradoxes: preference reversal. First notions of experimental method.
From paradoxes to behavioral models: Risk attitudes, probability, prospect theory
Field experiments. Applications.
Pushing the boundaries: Ambiguity. From behavioral to neuro-experiments.
Time and decision making. Language and time.
Analyzing culture (and nature)
Strategic thinking.  Two perspectives on limited thinking: iterated reasoning and mental models.
Dominance, backward induction. Interactive multiperson experiments.
We are not alone: Social utility and fairness.

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

Evaluation will be based on participation to class work and homework (30%), a written exam (40%), and a project work consisting in the design of an economic experiment (40%).

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 exprimental practice.

English

written

This subject deals with topics related to the macro-area "Natural capital and environmental quality" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development