Course 2009-2010 a.y.

Course Objectives

This course reviews the current state of the study of decision making in Economics, using both a theoretical and an experimental approach. Through this review, students learn the following:

• The relation between the study of individual decision making and the understanding of complex systems like markets and social and political institutions
• The use of experiments in Economics for the understanding of both individual and group decision making
• The use of experiments and theory to improve group decision making (more efficient markets, more informative voting systems, etc)

Course Content Summary

• Individual choice, utility, and axiom of revealed preferences.
• Experiments on individual decision making
• Aggregation of individual preferences and information: voting and Arrow's impossibility result. Experiments on committees and voting
• Strategic interactions and group decision making inefficiencies: Prisoner's dilemma and Battle of the sexes. Experiments on cooperation and coordination, social preferences
• Non-strategic interactions and decision making in complex and uncertain environments: markets. Asset market experiments
• Mechanism design: design of efficient markets, voting systems, and auctions. How can experiments help us do this?

Detailed Description of Assessment Methods

All exams for this course are written. There is a final exam, which must be taken by all students. There is also either a partial exam or home works which must be done by all attending students. The grade obtained in the partial (or home works) is used only to improve upon the grade obtained in the final, but expires after the second opportunity to take the final exam.

Textbooks

A folder of reading material is provided at the beginning of the course. If a textbook is chosen, students are informed before the summer holidays.

Prerequisites