The course is intended to analyse the role of uncertainty, risk, and information in decision-making. At the end of the course, students will be able to: O1) understand and use some basics including a. uncertainty and choice under uncertainty, b. risk, risk aversion and risk perception, c. risk portfolio and insurance, d. complete, incomplete and asymmetric information; O2) use simple models to understand the impact of asymmetric information and uncertainty on economic decisions/regulatory design; O3) Discuss and assess some specific risks (including regulatory risk, risk of compliance, etc.). O4) Appreciate the role pf risk management both at institutional and firm level.
Course Prerequisites
Formally none, but basics in Economics. Students are warmly advised to attend this course only once they passed the exam of Economia Politica (Economics) or Scienza delle Finanze (Public Economics), or an equivalent class.
Teaching Methods
Lectures/group activities. Class slides available at KIRO. If possible, some seminars will be organised with practitioners. disponibili su KIRO. Ove possibile, verranno proposti alcuni seminari didattici con professionisti del settore. Inclusive teaching is ensured to specific categories of students (https://portale.unipv.it/it/didattica/servizi-lo-studente/modalita-didattiche-inclusive): online reception, tutoring, concept maps can be used by students with learning disorders.
Assessment Methods
Oral examination: students will be required to apply the concepts learnt during of the course to analyse the impact of asymmetric information, uncertainty, and some specific risks on economic decisions and regulation.
Texts
• Rampa, G. e Lavanda, I. (2004) Microeconomia. Scelte individuali e benessere sociale. Carocci Editore (some chapters, available on the course website at KIRO) • Franzoni L.A. e Marchesi, D. (2006) Economia e politica economica del diritto (some chapters, available on the course website at KIRO). • A reading list available during the class on KIRO. Students who want course materials in English can sent an email to the teacher.
Contents
• Rational Choice Theory • Random variables, mean, expected value, variance. • Risk aversion and choice under uncertainty. • Examples: Lotteries, Insurance, Portfolio theory, probability and severity of punishment. • Uncertainty vs risk and risk perception. • Competitive market as a benchmark and Welfare. • Market failures (Monopoly, Public goods, Externalities). • Market failures (Asymmetric information). • Intellectual property and patents. • Basics of incentive contracts and firm theory. • Risk, uncertainty and asymmetric information in law and economics models about liability, crime deterrence and litigation. • Regulatory risk. • Firm compliance. • Risk regulation (basics)
Course Language
Italian
More information
The detailed syllabus and the lecture slides will be uploaded on the course website at KIRO. To access the KIRO page, an access key is required; it is communicated at the beginning of the course and can be requested to the teacher via email.
