94386 - ANALISI ECONOMICA E COMPORTAMENTALE DEL DIRITTO E DELLE REGOLE

Learning outcomes

In this course students learn to use the tools of economic analysis (positive and normative) to study the impact of legal norms and institutions on markets and on the relations among economic agents. In particular, students learn to design simple models to assess the economic efficiency of legal norms and to analyze the incentives such norms produce. This course focuses mainly on private law and on its impact on the relations among private agents, between private agents and firms and among firms, with special attention to the norms regulating private property, intellectual property, contracts, civil liability and product liability.

Course contents

• During the a.y. 2020-2021, the course will be a monographic course on the "Law and economics of financial markets". The key concepts of law and economics will be applied to the analysis of financial markets and their functioning, given their regulation and the institutions governing them.

  In particular, we will dwell on the following topics:

Agent rationality: how people should behave (especially in financial decisions) and how they behave in reality.
• Expected utility and prospect theory.
• Psychological bias and behavior:
  • Omission bias
  • Availability euristics
  • Loss aversion
  • Confirmation bias
  • Probability weighting
  • Framing
  • Euristic representativeness
  • Overconfidence
  • Definition and measure of risk.
    • Risk and insurance
    • Asymmetric information
  • The theory of efficient markets and its empirical assessment.
  • Speculative bubbles and financial crises.
  • Trading models and financial market mechanisms.

Readings/Bibliography

Primary textbook references are:

• Haeringer (2018), Market Design: Auctions and Matching, MIT Press (solo le parti indicate a lezione)

• Baron, J. (2008), Thinking and Deciding (4th ed.), Cambridge University Press (solo le parti indicate a lezione).

• Shiller, R. (2015), Irrational exuberance, Princeton University Press (solo i capitoli indicate a lezione). Di questo testo esiste una edizione italiana, che è però la traduzione di una precedente edizione.
• Shleifer, A. (2000), Inefficient Markets, Oxford University Press (solo le parti indicate a lezione)

Handouts prepared by the instructor and other materials will be made available during the course.

Teaching methods

Each class is organised in two distinct parts: in the first part an overview of the topic is given by the instructor. In the second part there will be active class discussion.

Class participation is crucial. A detailed schedule with lesson by lesson reading assignments will be provided at the beginning of the course. Students are expected to read the material and participate to the class discussion.

Assessment methods

1.Class participation (10%), assessing the ability to discuss the material in the active class discussions.

2. Paper (15 pages max. including figures and bibliography - counting for 40% of the final grade), assessing the ability to manage and apply the methods and knowledge absorbed during the entire course. Topics for the paper will be delivered during the second week of the course. Students will present their papers in class during the last two lectures. They are strongly encouraged to work in groups of two.

Teaching tools

Teaching materials will be published on Virtuale.

Office hours

See the website of Emanuela Carbonara