Academic year
2018/2019 Syllabus of previous years
Official course title
Course code
EM2Q09 (AF:253005 AR:143958)
On campus classes
ECTS credits
Degree level
Master's Degree Programme (DM270)
Educational sector code
3rd Term
Course year
Go to Moodle page
This course will introduce the most relevant conceptual, modelling, experimental and empirical aspects of recent research from the field of behavioural economics.
Behavioural theories will be compared to their neoclassical counterparts, which students have extensively explored and studied during microeconomics courses. In particular, in relation to the main differences in their assumptions, modelling choices, and, their implications on predicted behaviour.
Major empirically and/or experimentally observed violations of expected utility theory will be extensively described and critically discussed.
Most promising modelling solutions proposed by behavioural studies will be explored, both in relation to decision making in isolation and in strategic interaction settings.
Students will also have the chance to see in which terms behavioural theories are based on modelling assumptions inspired by findings from psychology, neurology and other social sciences.
Students are expected to have basic notions of expected utility theory and some familiarity with the basic concepts of game theory.

In relation to game theory, the key concepts to be known to be able to follow this course are the following:
- Strategic (normal) and extensive form games;
- Dominant Strategies;
- Nash Equilibrium;

In relation to expected utility theory, the key concepts/notions to be known to be able to follow this course are the following:
- (Relative and absolute) risk aversion;
- Lotteries (simple and composite);
- Expected utility maximization;
- Certainty equivalent;
Topics that will be exposed and discussed during the lectures include (non exhaustive list):

- Behavioural models of decision making under risk;
- Human sociality and other regarding preferences;
- Behavioural time discounting theories;
- Levels of thinking and strategic behaviour;
- Reinforcement learning and belief-based learning;
- Emotions, cognition and behaviour;
- Bounded rationality in financial markets;
- Neuroeconomics;

In relation to the aforementioned classical topics of behavioural economics literature, we will analyse and discuss in depth the following issues:

- Risk and uncertainty perception;
- On the role of beliefs of causation and association in mental models and expectations formation;

These two topics will be discussed through real world case-studies and empirical data, which will offer to students some precious insights to enrich their capacity to interpret, model and predict real-world economic and financial phenomena.
Attending students will have to design, implement and present a short-term group-research project related to one of these two topics.
The reference book for this course is:

– Sanjit Dhami (2016). ”The Foundations of Behavioral Economic Analysis”, Oxford University Press;

Only questions related to the sections of the reference book exposed and discussed during the course will be asked at the final exam.

Here follows the list of the sections of the reference book that should be studied for the final exam:

Part 1 - Behavioural Economics of Risk, Uncertainty and Ambiguity (69 pages):
– Chapter 1 sections: 1.1, 1.2, 1.3, 1.5.1, 1.5.2, 1.5.4, 1.5.5, 1.5.6 (20 pages);
– Chapter 2 sections: 2.1, 2.2, 2.3, 2.4, 2.10.1, 2.10.4, 2.11[only intro, 2.11.1 and 2.11.2] (40 pages);
– Chapter 3 sections: 3.1, 3.2[only intro and 3.2.1](9 pages);
– Chapter 4 sections: 4.1, 4.2, 4.4 (13 pages);

Part 2 - Other Regarding Preferences (40 pages):
– Chapter 6 sections: 6.1, 6.2[only intro], 6.3, 6.7.1, 6.7.2 (23 pages);
– Chapter 7 sections: 7.1, 7.2.1, 7.3[excluding 7.3.2] (17 pages);

Part 3 - Behavioural Time Discounting (27 pages):
– Chapter 9 sections: 9.1, 9.2, 9.3[only intro and 9.3.1], 9.4[only intro, 9.4.1 and 9.4.3] (8 pages);
– Chapter 10 sections: 10.1, 10.2.1, 10.3.1, 10.4.1, 10.4.2, 10.5[only intro, 10.5.1 10.5.2] (19 pages);

Part 4 - Behavioural Game Theory (25 pages):
– Chapter 13 sections: 13.3[only intro, 13.3.1 and 13.3.2], 13.4.5, 13.5[only intro and 13.5.1], 13.6 (25 pages);

Part 5 - Behavioural Models of Learning (22 pages):
– Chapter 15 sections: 15.2[only intro, 15.2.1, 15.2.4 and 15.2.5], 15.3[only intro and 15.3.1], 15.9 (22 pages);

Part 6 - Emotions (34 pages):
– Chapter 17 sections: 17.1, 17.2, 17.4, 17.5[only intro and 17.5.1], 17.6[only intro, 17.6.1 and 17.6.4] (19 pages);
– Chapter 18 sections: 18.1, 18.2, 18.5[only intro and 18.5.1](15 pages);

Part 7 - Bounded Rationality (71 pages):
– Chapter 19 sections: 19.2[only intro and 19.2.1],19.3[only intro], 19.4, 19.5[only intro, 19.5.1, 19.5.2], 19.6[only intro
and 19.6.1], 19.7[only intro and 19.7.1], 19.9[only intro and 19.9.1], 19.10[only intro, 19.10.1 and 19.10.2], 19.12, 19.13,
19.17[only intro and 19.17.1], 19.18 (34 pages);
– Chapter 20 sections: 20.1[only intro and 20.1.1], 20.2, 20.3 (15 pages);
– Chapter 21 sections: 21.1, 21.2, 21.5 (22 pages);

Part 9 - Neuroeconomics (25 pages):
– Chapter 23 sections: 23.2, 23.4[excluding 23.4.4], 23.5[only intro, 23.5.1 and 23.5.2], 23.6, 23.7(25 pages);

- Slides associated with the lectures will be posted on Moodle (the course e-learning platform) before the lecture in which they will be used;
-Other suggested readings and materials will be rendered available in electronic format via the Moodle platform;
For attending students only (those participating to at least 80% of the total number of lectures): Final (written) exam + in class participation + homework sets + group project presentation
For distant learning students (those participating to less than 80% of the total number of lectures): Final (written) exam
conventional teaching methods:
- Topic presentation through theoretical models, examples, case studies, experiments, etc.
- Literature review;
- Critical thinking and open discussion;
FOR ATTENDING STUDENTS (those participating to at least 80% of the total number of lectures):
The final grade is based on a reduced version of the final exam (50%=15points), two (2) homework sets (33.33%=10points, 5points each) and one in-class presentation of your group project (16.66%=5points).
In addition,your insightful contributions to the discussions in class will enter into your grade through a bonus (up to 3 points);

FOR DISTANCE LEARNING STUDENTS (those participating to less than 80% of the total number of lectures):
The grade will be based on the complete version of the final exam (100% = 30 points);

- There will be 2 homework sets. You are encouraged to work in groups, each student must return his/her own homework
answers. If you collaborate on a specific/all problem sets of the homework you should acknowledge all your collaborators
on the header of the homework.
- Each homework set will be made available on Moodle ten (10) days before the deadline for submitting it. You will submit
your answers by uploading them on Moodle, no homework sent to me by email will be accepted.
- Policy on Lateness: Problem sets submitted aftr the deadline will not be accepted;
- Solutions and homework grades: Solutions for the homework sets will be made available through Moodle before the final exam;

CLASS PARTICIPATION (up to 3 bonus points):

- Lecture attendance is not compulsory, but you are encouraged to come to class and to participate in our discussions;
- I will keep track of your presence and interventions and give you up to three (3) bonus points on the basis of three criteria:
the timeliness, relevance and pertinence of your interventions in relation to discussed topics.
For example: if you came to at least 80% of the total number of lectures and did at least three timely, relevant and pertinent
interventions during the course I will give you two (3) bonus points, which will be added to your final grade;


- The final exam is scheduled for March the 18th, from 14:00 to 16:00, in room 10B;

- The final exam will contain two sections:
1) First section: two (2) problem sets (15 points, 7.5 per set)
2) Second section: one (1) short-essay question (15 points);

- Distant learning students will have 1 hour and 45 minutes to complete both sections of the final exam;
- Attending students will have to choose one of the two sections and will have 60 minutes to complete the selected section
of the final exam;
- Bring your ID card or passport at the final exam;
- Arrive 15 minutes before the start of the exam;
- You can bring your book, class notes, slides, homework solutions and other written materials at the final exam, but only on
paper support: no notebooks, phones and tablets can be used during the exam;
- It is severely forbidden to pass or exchange any material during the final exam, if I catch you doing so or talking/whispering:
1) You will be excluded from the final exam and your exam answers will not be graded;
2) At the following exam sessions you will be obliged to take the ”distance learning student” version of the final exam;
3) All previously acquired ”attending student” benefits and grades will be ignored;

Ca' Foscari applies the Italian Law (Law 17/1999; Law 170/2010) for support and accommodation services available to students with specific learning disabilities.
If you have a motor, visual, hearing or other disability (Law 17/1999) or a specific learning disorder (Law 170/2010) and require support (classroom assistance, technology aids for carrying out individual examinations, material in accessible format, note retrieval, specialist tutoring to support the study, interpreters or other) please contact the Disability and DSA office at
Definitive programme.
Last update of the programme: 03/02/2019