B1431 - STRATEGY, BEHAVIOR, AND POLICY IN ECONOMICS

Learning outcomes

The course has three main objectives: (i) explain how economists learn from empirical evidence, and how lab, field, and natural experiments can help establishing causation; (ii) teach the intuition behind some intermediate game theoretical concepts; (iii) show a wide range of applications and topics in economics

Course contents

Erasmus students: Please note that you cannot take this course if you have not yet taken a course in Microeconomics (a formal requirement at EPOS) AND a course in econometrics (a de facto requirement given the content of the course).

The course will provide a broad range of examples on how economic theory and experiments can be used to understand pressing societal problems as well as to inform governments, firms, and consumers. The applications will range from media bias to environmental conservation, from discrimination to education and social housing.

For each topic, we will start from simple theoretical models and will then discuss experimental evidence -- both supporting the model or showing potential limitations of the theory. While we will usually start from simple laboratory experiments and in-class demonstrations, the main focus of the course will be on field experiments.

Note that this syllabus may be subject to changes; thus, please make sure you are checking the most updated version of the syllabus on Virtuale.

Topic 1: Inequality

Mandatory readings:

Almås, I., Cappelen, A.W. and Tungodden B (2020) Cutthroat Capitalism versus Cuddly Socialism: Are Americans More Meritocratic and Efficiency-Seeking than Scandinavians? Journal of Political Economy, 128:5, 1753-1788: https://doi.org/10.1086/705551

Excerpt from: Cappelen, A. W., Falch, R., and Tungodden, B. (2020). New chapter: Fair and unfair income inequality, Handbook of Labor, Human Resources and Population Economics, 2020 (see Virtuale)

Excerpt from: Fehr, E., and Schmidt, K. M. (2005). The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories, Munich Discussion Paper, No. 2005-20. https://doi.org/10.5282/ubm/epub.726 (see Virtuale)

Glennerster R., and Takavarasha, K. (2013) Running randomized evaluation: A practical guide. Excerpt from chapter 7 and 8 (see Virtuale):

Excerpt from: Stantcheva, S. (2022). How to Run Surveys: A guide to creating your identifying variation and revealing the invisible (see Virtuale)

Lecture notes (available on the opportunity insights, first three lectures): https://web.archive.org/web/20220511204620/https://opportunityinsights.org/course/ [https://web.archive.org/web/20220511204620/https:/opportunityinsights.org/course/]

Report on MTO (paragraphs 1.1, 1.2, and 1.3): https://www.huduser.gov/publications/pdf/mtofhd_fullreport_v2.pdf

Additional readings:

NYT: on upward mobility [https://www.nytimes.com/2015/05/04/upshot/an-atlas-of-upward-mobility-shows-paths-out-of-poverty.html] and racial mobility [https://www.nytimes.com/interactive/2018/03/19/upshot/race-class-white-and-black-men.html]

Scientific reference: social mobility [https://www.science.org/doi/10.1126/science.aal4617] (Science) and impact of neighborhoods [https://academic.oup.com/qje/article/133/3/1107/4850660] (QJE)

Atlas: available here [https://www.opportunityatlas.org/]

Topic 2: Climate Change

Mandatory readings:

Andre, P., Boneva, T., Chopra, F. & Falk, A. (2024). Misperceived Social Norms and Willingness to Act Against Climate Change: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_101_2021.pdf

Barrett, Scott. Why Cooperate? The Incentive to Supply Global Public Goods, Oxford University Press, Incorporated, 2007, Introduction (see Virtuale)

Herrmann, B. et al. (2008) Antisocial Punishment Across Societies. Science 319,1362-1367: https://doi.org/10.1126/science.1153808

Rustagi, D., Engel, S., & Kosfeld, M. (2010). Conditional Cooperation and Costly Monitoring Explain Success in Forest Commons Management. Science, 330(6006), 961–965. http://www.jstor.org/stable/40931871

Additional readings:

The Core: The Economy 2.0, Chapter 4, sections 4.1, 4.3, 4.4, 4.6, 4.7, 4.8, 4.9, 4.14 (Book available online, https://www.core-econ.org/project/the-economy-2-0-microeconomics/ )

Fischbacher, U., Gächter, S. and Fehr, E., (2001), Are people conditionally cooperative? Evidence from a public goods experiment, Economics Letters, 71, issue 3, p. 397-404, https://EconPapers.repec.org/RePEc:eee:ecolet:v:71:y:2001:i:3:p:397-404

Topic 3: Workplace

Mandatory readings:

Bloom, N., Liang, J., Roberts, J. and Ying, Z.Y. (2015) Does Working from Home Work? Evidence from a Chinese Experiment ,The Quarterly Journal of Economics, 130 (1), 165–218: https://doi.org/10.1093/qje/qju032

Heinz, M., Jeworrek, S., Mertins, V., Schumacher, H., and Sutter, M. (2020) Measuring the Indirect Effects of Adverse Employer Behaviour on Worker Productivity: a field Experiment, The Economic Journal, 130 (632), 2546–2568, https://doi.org/10.1093/ej/ueaa038

Kube, Sebastian & Maréchal, Michel & Puppe, Clemens. (2008). The Currency of Reciprocity - Gift-Exchange in the Workplace. American Economic Review. 102. 10.2139/ssrn.1160170: https://www.aeaweb.org/articles?id=10.1257/aer.102.4.1644

Additional readings:

Fehr, E., and Goette. L. (2007) Do Workers Work More if Wages Are High? Evidence from a Randomized Field Experiment. American Economic Review, 97 (1): 298-317: https://www.aeaweb.org/articles?id=10.1257/aer.97.1.298

Topic 4: Political Economy

Mandatory readings:

Bail et al. (2018) Exposure to opposing views on social media can increase political polarization. PNAS, 115 (37), 9216-9221: https://doi.org/10.1073/pnas.180484011 [https://doi.org/10.1073/pnas.1804840115]

Charles A. Holt. Markets, Games, and Strategic Behavior: An Introduction to Experimental Economics, Chapter 19 (see Virtuale)

Chen, Y. and Yang D. Y. (2019) The Impact of Media Censorship: 1984 or Brave New World? American Economic Review, 109 (6): 2294-2332: https://doi.org/10.1257/aer.20171765

Gerber, A.S., and Greenx D.P. Field Experiments on Voter Mobilization: An Overview of a Burgeoning Literature, Chapeter 9, in Banarjee A.V. and Duflo E. Handbook of Economic Field Experiments, volume 1 (see Virtuale)

Additional readings:

Fujiwara, T. (2015) Voting Technology, Political Responsiveness, and Infant Health: Evidence from Brazil. Econometrica, 83(2): https://doi.org/10.3982/ECTA11520

Topic 5: Development, Education, and Gender

Mandatory readings:

Alesina, A., La Ferrara, E. and P. Pinotti (forthcoming) Revealing Stereotypes: Evidence from Immigrants in Schools, American Economic Review: https://michelacarlana.com/wp-content/uploads/2023/08/AlesinaCarlanaLaFerraraPinotti_August2023.pdf

Bursztyn, L., González, A. L., & Yanagizawa-Drott, D. (2020). Misperceived social norms: Women working outside the home in Saudi Arabia. American Economic Review, 110(10), 2997-3029: https://www.aeaweb.org/articles?id=10.1257/aer.20180975

Sule, A. and Mumcu, I. (2024) Nurturing Childhood Curiosity to Enhance Learning: Evidence from a Randomized Pedagogical Intervention. American Economic Review, 114 (4): 1173-1210: https://doi.org/10.1257/aer.20230084

Additional readings:

Banerjee, A. V., & Duflo, E. (2012). Poor economics: a radical rethinking of the way to fight global poverty. Paperback edition. New York, PublicAffairs, Chapter 4 (see Virtuale)

Topic 6: Asymmetric Information

Mandatory readings:

Balafoutas, L., Beck, A., Kerschbamer, R., & Sutter, M. (2013). What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods. The Review of Economic Studies, 80(3), 876–891. http://www.jstor.org/stable/43551449

Charles A. Holt. Markets, Games, and Strategic Behavior: An Introduction to Experimental Economics, Chapter 23 (see Virtuale)

Additional readings:

Bolton, G. E., Katok, E., and Ockenfels, A. (2004). How effective are electronic reputation mechanisms? an experimental investigation. Management Science, 50(11):1587–1602. https://www.jstor.org/stable/30047967

Topic 7: Intertemporal Decision Making

Mandatory readings:

Andreoni, J. Kuhn, M.A., List, J.A., Samek, A., Sokal,K., anx Sprenger, C. (2019) Toward an understanding of the development of time preferences: Evidence from field experiments, Journal of Public Economics, 177: https://doi.org/10.1016/j.jpubeco.2019.06.007 .

Angner E. (2012) A course in behavioral economics, Chapters 8 and 9 (see Virtuale)

DellaVigna, S. and Malmendier, U. (2006) Paying Not to Go to the Gym. American Economic Review, 96 (3): 694-719: https://doi.org/10.1257/aer.96.3.694

Readings/Bibliography

The material for the exam includes both the slides and the required research papers and book chapters. The slides provide some context for each topic discussed in class and offer guidance for reading the required papers. The additional readings reported in the syllabus refer to papers mentioned in the slides and can offer further understanding of the general context if some points are not clear enough from the slides themselves (especially for non-attending students).

For most topics, you are required to carefully read some research papers (i.e., mandatory papers). It is important to focus on the introduction, design, and identification of the causal effect. You are not required to study all the econometric analyses, just make sure to understand the regression tables reported in the slides. Yet, it is important that you pay attention to the sample selection, attrition, and details of the implementation affecting the analyses and conclusions one can draw from the data. Remember, the main point of the course is to learn how to use lab/field experiments and RCTs to establish a causal effect.

To download published papers, you need to be connected via AlmaWIFI. If you are not on campus, please use the library webpage and your UniBo credentials: https://sba.unibo.it/en/homepage -- select AlmaSmart, Single search in AlmaStart for print and online library resources (books, articles, journals, databases, AlmaRE, and AlmaDL Collections).

Teaching methods

The course comprises both traditional lectures and a hands-on laboratory part.

Students will have the chance to play simple experiments in class.We will also discuss and analyze data from prominent research papers.

The class is designed to be highly interactive and students are expected to prepare presentations, videos/podcasts, and short essays.

Assessment methods

Final written exam of about two hours, or two midterm exams of about one hour each. The second (and final) midterm can be taken only at the first exam session at the end of the semester.

Each paper and pencil exam will consist of multiple choice questions and open questions.

Only students with a sufficiently high grade in the first midterm exam (i.e., 18 or higher) will be admitted to the second one: other candidates must proceed to the full exams.

For students taking the midterm exams (esami parziali), the final grade for the course will be the arithmetic average of the grades in the two midterm exams.

For students taking the full exam, the grade of the exam is the final grade.

The grading system is on a 0-30 scale:

<18 fail
18-23 sufficient
24-27 good
28-30 very good
30 cum laude: excellent

Candidates are required to register via the University's electronic service (AlmaEsami), where grades will be published.

After exams are graded, students will have the chance to see their graded exam on a date determined by the lecturer.

Students will be allowed to reject their final grade for the course at most ONCE. Notification of the intention to reject a grade must be sent via email, within the deadline indicated by the lecturer.

Teaching tools

Slides, lecture notes, and readings will be available on the platform VIRTUALE: https://virtuale.unibo.it/

Office hours

See the website of Stefania Bortolotti