90457 - Economics of Ratings and Rankings

Learning outcomes

In recent years, first in markets for trust services (financial, insurance, health, education, social) and then in markets for ordinary services and durable goods, quantitative indicators have been developed to reduce information asymmetries, to foster competition and, more generally, to promote allocative efficiency. The increased availability of data on the characteristics of services and goods, as well as of their users, is likely to lead to a further increase in the use of these indicators and therefore to a growing need to verify their allocative effects. Moreover, there will be rising problems due to potential conflicts of interest on the head of the third-party certifiers. The course will provide the students with the law and economics tools to understand the effects of different types of performance indicators and of the different forms of regulation of the markets for certification as well as of the different types of public agencies’ interventions.

Course contents

Markets with asymmetric information: private and public regulatory tools

• Allocative effects of asymmetric information
• Contractual solutions and market regulation
• Quality disclosure and third-party certification
• Accreditation, ratings and rankings
• Credit Rating Agencies

The effects of ratings and rankings

• Financial and insurance markets
• Professional services (health, education and legal services)

Readings/Bibliography

The reading list and the slides for this course will be available on Virtuale.

Teaching methods

Classroom lectures.

Assessment methods

Students who regularly attend lectures during the final two class sessions will be required to give a 15–20 minute presentation on one of the topics covered in the course (maximum score: 20 points).

At the end of the course, all students must take a written test consisting of 2–3 open-ended questions (maximum score: 12 points).

Students who choose not to give an in-class presentation will instead take a written test on the day of the exam. This test will require them to develop a short essay based on an outline provided by the instructor, to be completed within 90 minutes (maximum score: 20 points).

Students may choose the assessment method that best aligns with their academic background. However, they are expected to engage with the proposed topics with a high level of rigor and appropriateness, considering the interdisciplinary nature of the issues discussed.

Academic dishonesty in any form will not be tolerated. In order to take the exam, students must be registered on Almaesami.

Students with specific learning disorders (SLDs), or with temporary or permanent disabilities, are strongly encouraged to contact the appropriate university office in advance (https://site.unibo.it/studenti-con-disabilita-e-dsa/it ). The office will evaluate individual needs and recommend any necessary accommodations. These recommendations must be submitted no later than 15 days prior to the relevant academic activity for approval by the course instructor, who will assess their appropriateness in light of the course’s learning objectives.

The grade will go from 30 to 18, depending on the level of understanding of the relevant material, and the quality of the writing output. Student have the right to refuse a passing grade only once.

 

30-27

-Outstanding grasp of the course material.

-Excellent writing output

26-23

-Substantial understanding of the course material.

-Good writing output

25-22

-Decent understanding of the course material.

-Decent writing output

21-18

-Sufficient understanding of the course material.

-Sufficient writing output.

Negative assessment

-Scarce understanding of the course material.

-Scarce writing output.

Teaching tools

Blackboard and chalk. Slides.

Office hours

See the website of Luciano Messori