Decisions and Uncertainty
Instructor: Paolo Ghirardato and Lorenzo Stanca
NEWS:
COURSE LECTURES 2023-2024 FALL SEMESTER:
Like all instruction in UniTo during the fall semester, the course will be taught in person. The course schedule (with venues) is the following:
- THURSDAYS 10:15-13:15, Aula Corradetti
- FRIDAYS 9:15-11:15, Aula Corradetti
OFFICE HOURS:
Weekly office hours during the semester will be announced during the first week of classes. However, Professors Ghirardato and Stanca are available to meet students by appointment. Send them an email by clicking here for Ghirardato or here for Stanca.
For the fall months, Prof. Ghirardato is available to meet students (in his office in the Dipartimento, 3.22 on the 3rd floor) on the following days:
He is also available at other times, by email appointment.
SYLLABUS: This is a course --elective for the Master's degrees (LM) in Economics, in Quantitative Finance and Insurance, Stochastics and Data Science and in Matematica (Indirizzo modellistico-probabilistico)-- which introduces students to the formalization and analysis of decision making in a single-person and in a strategic (i.e., game theory) environment. While the course's emphasis is on theoretical issues, some attention is also given to the application of concepts to business, economic and financial problems. Topics in parenthesis may be omitted in the interest of time.
- Introduction and overview of decision models
- Known probabilities: The Expected Utility model and its consequences
- (Your decision problem, in detail. An application of expected utility)
- Subjective probability: The Subjective Expected Utility model (Anscombe-Aumann and Savage)
- Non-expected utility models: The Allais and Ellsberg paradoxes and their rationalizations
- Dynamic choice: basic concepts
- Choice over time with no uncertainty
- Choice over time with uncertainty
The exam is mostly going to be based on the class notes and some readings assigned in class. However, for supplemental reading (and some homework exercises) the following are the suggested textbooks for the course:
- David Kreps, Notes on the Theory of Choice, Westwood Press, 1988 (hard, but good as reference), chapters 1-12
- Tomasz Strzalecki, Decision Theory, lecture notes, 2017, chapters 2, 4 and 6
- (Howard Raiffa, Decision Analysis, McGraw-Hill 1997 (1968), chapters 1-5, on your decision problem)
EXERCISES: The following exercises are very important as practice and verification of your understanding of the course material.
PAST EXAMS: Here are some past exams for this course.
CONTACTS
paolo.ghirardato at unito.it, lorenzomaria.stanca at unito.it
Back to Paolo's page
Created: 29/09/16. Last updated: 13/12/2024