This course is an introduction to behavioral economics and to experimental economics and finance.
It has two main objectives. First, review the main evidence on violations of traditional economic
assumptions that has been provided by recent research on experimental economics. Second, study
economic and financial models that incorporates these new evidence, as well as its applications.
The models include: Simple heuristics for complex choices, Decision-making under risk and
ambiguity; Intertemporal decision-making; Learning, Strategic (and non-strategic) interaction,
Applications comprise: Intertemporal choice with hyperbolic and quasi-hyperbolic discounting;
Borrowing and saving; Insurance and competence; Environment and intergenerational discount
factor; Measures of risk and ambiguity attitudes as Health care, Bubble and bust, Microfinance, The
equity premium puzzle; Incentives to cooperate vs Free Riding; Emergence of conventions and
The course offers an introduction to behavioral individual choice and to non-cooperative and cooperative behavioral game theory.
Students will gain an understanding of how individuals actually make economic and financial
decisions (descriptive) and guidance on how to improve economic and financial decision making
(prescriptive) in themselves and others; it will also give an overview of cognitive economics and
behavioral finance. This course is also designed to familiarize students with the use of experiments
to answer research questions.
Diamond Peter, Hannu Vartiainen, 2007, Behavioral Economics and Its Applications, Princeton UP,
Cartwright, Edward, 2014, Behavioral Economics, 2nd ed, Routledge, Ch. 2, 3, 4, 5, 6, 7, 8
Classes and seminars
Type of exams
- Partial examination: Written Exams
- Final examination: Written Exams