Part 1. Individual decision making (Decision Theory)
Introduction ; frameworks for modelling decision, uncertainty, time, interaction:
- Decision: normative vs descriptive questions.
- Disciplines interested in decision and their role in this course: economics, philosophy, behavioural and experimental economics, psychology of judgement and decision making, decision analysis
- Modelling factors in decisions: framework, underlying assumptions, guidelines for use.
Decision making in the absence of uncertainty
- Preferences, choices, utility
- How do you defend / scrutinise a theory of decision? Axioms, representation results, their roles and their uses
- Choice data, and the measurement and testing of decision models: types of data, experimental findings, “heuristics and biases” in choice under certainty.
Decision making under risk and uncertainty: classical approaches
- Classical approach: expected utility under risk and uncertainty
- Is expected utility rational? Philosophical scrutiny of axioms.
- The measurement of utilities and beliefs: theoretical foundation, experimental implementation
- Challenges to the classic approach: experimental findings; alternative directions.
New approaches to decision under uncertainty: “severe uncertainty” and ambiguity
- Non-probabilistic accounts of uncertainty: philosophical underpinning, theoretical models, experimental testing and applications
- Source preferences
- Measurement issues
- Incomplete Preferences and imprecise beliefs
- Decision from description vs from experience
New descriptive approaches to decision making under risk and uncertainty: Prospect Theory
- Prospect Theory under risk and uncertainty : presentation
- Measurement
- Experimental findings
Decision and time
- Classical approaches: Discounted expected utility
- Measurement issues
- Challenges and biases: experimental findings; new approaches.
Part 2. Strategic decision making (Game Theory)
Strategies and equilibria in simultaneous-move games
- Concepts : cooperative and non-cooperative games
- Basic results
- Experimental findings
Strategies and equilibria in extensive form and repeated games
- Concepts for interactive situations proceeding in several stages
- Theoretical and experimental findings on multi-stage and repeated strategic interactions
Games and Bargaining on Networks
- Networks as a modelling framework for social interaction, and beyond.
- Games and bargaining on networks, their applications, and empirical evidence
- Results and insights.
Evolutionary Games and Learning
- Evolution as a game: equilibria, applications and examples
- Dynamics of game play
- Learning in games
