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Second cycle
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Single cycle
degree courses
Faculty of Economics Science
Course unit
ECM0013169, A.A. 2013/14

Information concerning the students who enrolled in A.Y. 2012/13

Information on the course unit
Degree course Second cycle degree in
EC1935, Degree course structure A.Y. 2012/13, A.Y. 2013/14
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Degree course track ECONOMICS AND PUBLIC FINANCE [002PD]
Number of ECTS credits allocated 6.0
Type of assessment Mark
Course unit English denomination BEHAVIORAL ECONOMICS
Department of reference Department of Economics and Management
Mandatory attendance No
Language of instruction English
Single Course unit The Course unit CANNOT be attended under the option Single Course unit attendance
Optional Course unit The Course unit can be chosen as Optional Course unit

Teacher in charge ANTONIO NICOLO' SECS-P/01

ECTS: details
Type Scientific-Disciplinary Sector Credits allocated
Educational activities in elective or integrative disciplines SECS-P/01 Political Economy 6.0

Course unit organization
Period First semester
Year 2nd Year
Teaching method frontal

Type of hours Credits Teaching
Hours of
Individual study
Lecture 6.0 42 108.0 No turn

Start of activities 23/09/2013
End of activities 25/01/2014
Show course schedule 2017/18 Reg.2014 course timetable

Examination board
Board From To Members of the board
3 Commissione AA 2016/17 01/10/2016 30/09/2017 CHILLEMI OTTORINO (Presidente)
CAGGIANO GIOVANNI (Membro Effettivo)
GALAVOTTI STEFANO (Membro Effettivo)
MANENTI FABIO (Membro Effettivo)
2 aa1516 01/10/2015 30/09/2016 CHILLEMI OTTORINO (Presidente)
CAGGIANO GIOVANNI (Membro Effettivo)
GALAVOTTI STEFANO (Membro Effettivo)
MANENTI FABIO (Membro Effettivo)
1 Commissione A.A. 2014/15 01/10/2014 30/09/2015 CHILLEMI OTTORINO (Presidente)
CAGGIANO GIOVANNI (Membro Effettivo)
GALAVOTTI STEFANO (Membro Effettivo)
MANENTI FABIO (Membro Effettivo)

Prerequisites: A basic knowledge of microeconomic theory is required
Target skills and knowledge: Standard models in economics build on a simple but powerful model of behavior. Individuals make choices so as to maximize a utility function, using the information available, and processing this information appropriately. Individuals' preferences are assumed to be time-consistent, affected only by own payoffs, and independent of the framing of the decision. In the last decades laboratory and field experiments have raised serious questions about these assumptions. This course begins by providing an overview of standard theory of individual decision making. We then analyze models which depart from the standard one assuming that agents care about other agents’ payoffs, exhibit an attitude toward risk that depends on framing and reference points and are affected by emotions
Examination methods: Grading for the class will be based on students’ presentation and a short written exam (50%) and a research project (50%).
Assessment criteria: Evaluation of students' ability in (i) reading and understanding a research paper on this topic, (ii) understanding the theoretical contributions presented during the course (iii) devoloping new research ideas
Course unit contents: Lecture 1 Introduction to behavioral economics
Della Vigna S. Psychology and Economics: Evidence from The Field, Journal of Economic Literature, 2009, Vol. 47, pp. 315-372.
Lecture 2 Standard theory of individual decision making
Mas Colell, Whinston and Green Microeconomic Theory chapt. 1 and 3.
Lecture 3 Status quo, Loss Aversion and Endowment Effect. Laboratory and Empirical Evidence
Kahneman, D., J. L Knetsch, and R.H. Thaler. 1991. Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias. Journal of Economic Perspectives 5(1): 193–206.
Madrian B and D. Shea The power of Suggestion: inertia in 401(k) participation and saving behavior, Quarterly Journal of Economics, 66:1149-87.
Tversky, A. and D. Kahneman (1991), Loss Aversion in Riskless Choice: A reference-dependent Model. Quarterly Journal of Economics, 106:1039-61.
Lecture 4 Consideration sets
Eliaz, K. and R. Spiegler (2011) Consideration Sets and Competitive Marketing, Review of Economic Studies 78, 235–262.
Lecture 5 Categorization
Manzini, P. and M. Mariotti (2007), Sequentially Rationalizable Choice, American Economic Review, 97: 1824-1839.
Manzini P and M. Mariotti (forthcoming), Categorize Then Choose: Boundedly Rational Choice and Welfare, forthcoming in the Journal of the European Economic Association.
Lecture 6 Standard decision theory Under Uncertainty: Expected Utility
Lecture notes
Lecture 7 Non-expected utility theory: prospect theory
Lecture notes.
Kahneman, Daniel, and Amos Tversky (1979) Prospect Theory: An Analysis of Decision Under Risk, Econometrica, 67, 263-91.
Lecture 8: Intertemporal Choices
Loewenstein G. and R. Thaler, (1989), Anomalies: Intertemporal Choice,” Journal of Economic Perspectives 3 pp. 181-193
Frederick, S., G. Loewenstein, and T. O'Donoghue, (2002), Time Discounting and Time Preference: A Critical Review. Journal of Economic Literature 40(2): 351-401.
Lecture 9: Temptation and Procastination
DellaVigna, S. and U. Malmendier. 2006. Paying Not to Go to the Gym. American Economic Review 96(3): 694–719.
DellaVigna, S., and U. Malmendier (2004) Contract Design and Self Control: Theory and Evidence. Quarterly Journal of Economics 119(2): 353–402.
O’Donoghue T. and M. Rabin, “Doing it now or later,” American Economic Review 89 (1999), 103–124;
O’Donoghue T. and M. Rabin, “Choice and Procrastination,” Quarterly Journal of Economics 116 (2001), 121-160
Lecture 10 Social preferences: Inequity aversion
Fehr, E. and Schmidt, K.M. 1999. A Theory of Fairness, Competition, and Cooperation, Quarterly Journal of Economics 114(3): 817–868.
Lectures 11-12 Reciprocity
Charness, G., and M. Rabin. 2002. Understanding Social Preferences with Simple Tests, Quarterly Journal of Economics 117(3): 817–869.
Camerer, C.F., and E. Fehr. 2004. Measuring Social Norms and Preferences using Experimental Games: A Guide for Social Scientists. Institute for Empirical Research in Economics University of Zurich Working Paper No. 97.
Levitt, S.D., and J.A. List. (2007), What Do Laboratory Experiments Measuring Social Preferences tell us about the Real World? Journal of Economic Perspectives 21(2): 153–174.
Lecture 13 Reciprocity and Mediocrity
Montinari N, A. Nicolò and R. Oexl (2012) Mediocrity and Induced reciprocity, Jena Economic Research Paper n. 53.
Lecture 14 Behavioral Political Econmomy
Corazzini L., S. Kube, M.A. Maréchal and A. Nicolò (2012), Elections and Deceptions: An Experimental Study on the Behavioral Effects of Democracy, wp Institute for Empirical Research in Economics University of Zurich n.421
Lecture 15-18: Introduction to Experimental Economics
Lecture notes
Lecture 19-21 Students Presentation
Planned learning activities and teaching methods: Lectures and laboratory activities to learn how to run an experiment in economics
Additional notes about suggested reading: There is no required textbook for this class, but you are encouraged to read papers on the syllabus. Slides for the lectures will also be posted on the website of the course. You are strongly encouraged to actively attend each class
Textbooks (and optional supplementary readings)