- Docente: Filippo Massari
- Credits: 5
- SSD: SECS-P/01
- Language: English
- Teaching Mode: Traditional lectures
- Campus: Bologna
- Corso: Second cycle degree programme (LM) in Economics and Economic Policy (cod. 8420)
Learning outcomes
At the end of the course, the student can use, derive, and understand the logic of rational decision theory (e.g., Expected Utility, Bayes' rule). Students will be able to recognize and work with the main behavioural economic models of decision-making (e.g., Ambiguity Aversion, Prospect Theory) and to understand the implications of the law of large numbers applied to repeated decisions.
Course contents
Individual decisions
- Basics of statistical inference and rational decisions (Strong law of large numbers, Bayes' Rule, Expected Utility, Gambling theory)
- Biased decisions and behavioural decision models (Ambiguity aversion, Prospect theory, Biases in learning)
Collective decisions
- financial markets (Efficient market hypothesis)
- common biases in financial markets
Readings/Bibliography
There is no unique textbook for this course.
I will provide slides capturing the main ideas from a number of papers and textbooks.
A non-exhaustive list of suggested readings is the following
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Surowiecki, James. ”The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business.”
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Taleb, N. Nicholas. The Black Swan: The Impact of the Highly Improbable Fragility.
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Darrell, Huff, and Irving Geis. ”How to lie with statistics.”
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Kahneman, Daniel. ”Thinking, fast and slow. Macmillan”.
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Binmore, Ken. “Rational decisions.”
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Thorp, Edward O. “Beat the dealer: A winning strategy for the game of twenty-one”
Teaching methods
lectures
Assessment methods
Maybe presentations for partial credits.
Oral exams.
Teaching tools
slides
Office hours
See the website of Filippo Massari