This course analyses causes and implications of financial market anomalies. After a review of rational choice under uncertainty and equilibrium pricing of risk, we will show that rationality alone is not sufficient to rule out bubbles and herd behavior. We then focus on behavioral departures from the expected utility theory. We eventually will go through macroeconomic implications of market anomalies. The practice sessions will cover from very introductory Python basics to more advanced Python topics.

At the end of the course, students will have acquired a deeper understanding of the economic theories that contribute to explain market anomalies. At the end of the course students will also be able to code properly in order to test selected theoretical models. Students will have the ability to infer the potential departures from fundamentals-based pricing and to discuss the potential causes and limits of the adopted theoretical approach.

Review of choice under uncertainty; rational bubbles; Social learning; behavioral models for finance; macroeconomic implications of financial markets anomalies. Python-based techniques for data-driven analysis.

Slides and selected articles provided by the teacher

Lectures, practice sessions, in-class assignments

Two project works (30%) Advancement test (40%) Final written exam (30%)

Strong interest in the topics developed in the course and in reading advanced scientific articles.