ECONOMICS, UNCERTAINTY AND INFORMATION

Aim of the course is furnish the basic tools of mainstream and behavioral economics to analyze problems of individual and strategic decision making, under uncertainty and under incomplete and imperfect information, with particular focus on financial markets.

Principles of microeconomics.

KNOWLEDGE AND UNDERSTANDING: The student will be able to analyze and understand the main phenomena described and analyzed during the course, in relation to the behavior of individual economic agents and the economic mechanisms of exchange. APPLYING KNOWLEDGE AND UNDERSTANDING: At the end of the course, the student must be able to use the tools of theoretical analysis for an advanced understanding of uncertainty and information phenomena. MAKING JUDGEMENTS: The student will acquire the ability to judge in an autonomous way the individual decision making in relation to specific applications of uncertainty and information. COMMUNICATION SKILLS: The student will acquire the specific language of microeconomics of uncertainty and information in order to communicate precisely the concepts learned. LEARNING SKILLS: The student will learn the methodology of analysis of the main problems related to the discussed issues.

Individual decision making under static and dynamic uncertainty; strategic uncertainty in mainstream and behavioral game theory. Market decision making: when to sell and to buy under different market institutions. price and belief formation mechanisms. Efficient market hypothesis, market microstructure and behavioral finance. Contract theory. Financial negotiations under asymmetric information problems (moral hazard, adverse selection, signalling). Positive and normative analysis.

Lecture notes and material supplied by the instructor (presentations and articles available on the webpage). Selected topics from: Paiardini P., Microstruttura dei mercati finanziari, Giappichelli, 2020. R. Gibbons, Teoria dei giochi, il Mulino, ultima edizione. Colin F. Camerer. Behavioral Game Theory: Experiments in Strategic Interaction, 2003. Charles Holt, Markets, Games and Strategic Behavior: An Introduction to Experimental Economics, 2nd edition, 2020 A. Shleifer, Inefficient Markets- An Introduction to Behavioral Finance, Oxford University Press, 2000. Per la parte su teoria dei contratti: Macho-Stadler I. and D. Perez-Castrillo, Introduction to Economics of Information, Oxford University Press.

Lectures, practice classes and group presentations.

Written exam.

Passed the exam.