Topics in Microeconomics: Decision Theory and Evidence

Catalog description

Decision theory is the use of axiomatic techniques to understand the observable implications of models of choice. It is central to the incorporation of psychological insights into economics, and provides a vital link between theory and experimental economics. This course covers standard economic models of choice in different domains - choice under risk, choice under uncertainty and intertemporal choice. It looks at key topics from behavioral economics: choice with incomplete information, reference dependent preferences, temptation and self control, the Allais paradox, ambiguity aversion and neuroeconomics. In each case it relates the predictions of theory to experimental data on behavior.