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Course Syllabus

2022/2023

Introduction to Behavioral and Experimental Economics

Type: Minor
Delivered by: Department of Finance
Where: St.Petersburg School of Economics and Management
When: 3, 4 module
Open to: students of all HSE University campuses
Instructors: Vasilisa A. Makarova, Carlos J. Rincon
Language: English
ECTS credits: 5
Contact hours: 60

Course Syllabus

Full Syllabus

Abstract

This course will cover some major approaches to the study of individual behavior and decision making. It will explore a selection of the most important ideas in behavioral economics, restricting ourselves to models of individual decision making. The course touches upon both experiments and theory. From the experimental side, it includes the most profound observations from the lab and the field, learning basic techniques how to create and evaluate your own experimental data. From the theoretical side, we it covers basic theories that attempt to explain observed biases and learn how to extend the standard financial models to account for behavioral aspects.
Learning Objectives

Learning Objectives

  • To introduce models of behavior alternative to the standard homo oeconomicus approach, building on some insights from experimental economics and psychology.
Expected Learning Outcomes

Expected Learning Outcomes

  • Student can suggest alternative models that assume lesser sophistication on agents
  • Student has basic knowledge and skills in a Strategy restrictions in Applications (Auctions, bargaining, information transmission)
  • Student has basic techniques how to create and evaluate his own experimental data
  • Student knows how to apply bounded rationality models,, the methods of fundamental and technical analysis when planning work in the stock market
Course Contents

Course Contents

  • Topic 1. General overview of standard approach and its introspective vs learning justification
  • Topic 2. Analogy-based expectation equilibrium
  • Topic 3. Valuation equilibrium and equilibrium with imperfect recall. Level k and quantal response equilibrium
  • Topic 4. Choices, Values and Frames
  • Topic 5. Judgement, beliefs, heuristics and biases
  • Topic 6. Decision-making under risk and uncertainty
  • Topic 7. The treatment of time
  • Topic 8.
Assessment Elements

Assessment Elements

  • non-blocking Quizz
  • non-blocking Home assignment
  • non-blocking Experiment project
  • non-blocking Robust portfolio
  • non-blocking Experimental design
Interim Assessment

Interim Assessment

  • 2022/2023 4th module
    5*0.05*Quizz+0.15*HA+0.15*EP+0.15ED+0.15*RP+0.35*final exam
Bibliography

Bibliography

Recommended Core Bibliography

  • Gilboa,Itzhak. (2009). Theory of Decision under Uncertainty. Cambridge University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.cup.cbooks.9780521517324
  • John H. Kagel, & Alvin E. Roth. (2016). The Handbook of Experimental Economics, Volume 2. Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.pup.pbooks.10874
  • Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995). Microeconomic Theory. Oxford University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.oxp.obooks.9780195102680
  • Redhead, K. (2008). Personal Finance and Investments : A Behavioural Finance Perspective. London: Routledge. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=237524
  • Wakker, P. P. (2010). Prospect Theory : For Risk and Ambiguity. Cambridge, UK: Cambridge University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=324116

Recommended Additional Bibliography

  • Faruk Gul, & Wolfgang Pesendorfer. (2005). A Simple Theory of Temptation and Self-Control. Levine’s Bibliography. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.cla.levrem.784828000000000121
  • Gilboa, I., & Schmeidler, D. (2001). A Theory of Case-Based Decisions. Cambridge: Cambridge University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=72982
  • Jehiel, P., & Samet, D. (2007). Valuation equilibrium. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.EE654F31
  • Nagel, R. (1995). Unraveling in Guessing Games: An Experimental Study. American Economic Review, (5), 1313. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.aea.aecrev.v85y1995i5p1313.26
  • Osborne, M.-J., & Rubinstein, A. (1997). Games with Procedurally Rational Players. Papers. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.fth.teavfo.4.97
  • Philippe Jehiel, & Frédéric Koessler. (2008). Revisiting Games of Incomplete Information with Analogy-Based Expectations. Post-Print. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.hal.journl.halshs.00754297
  • Philippe Jehiel. (2005). Analogy-based Expectation Equilibrium. Post-Print. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.hal.journl.halshs.00754070