Lecture 5th/ 6th semester
Lecturer: Klaus Wälde
Tutorial: Jean Roch Donsimoni
Exam: in English, computer based ("E-Klausur"). Answers can be given also in German
The lecture Macroeconomics II covers topics from behavioural macroeconomics. Unfortunately, this is not yet a fully elaborated field. We will therefore cover all kind of topics from behavioural economic theory and discuss the links or the potential links to macroeconomics. The material in this course and the link between psychology, behavioural economics and macroeconomics is therefore subject of ongoing research.
In this sense this lecture is a perfect example of research-oriented teaching -- one of the building blocks of JGU Mainz. As a downside, this implies that there is no textbook that covers all the material which is taught in the course. Students will be rewarded for this lack by an insight into state-of-the art research and thinking.
The lecture and the tutorial are held in English. The course is based on articles from the literature which students should read. These papers will be announced in the lecture.
The lecture consists of the following four parts
1) Introduction and emotional economics
3) How behavioural macro could look like
4) Wealth distributions and redistribution, and summary
Additional slides from the lecture are available in the JGU Reader.
The tutorial also offers various innovations. Three tutorials will be held in the standard classroom style. The other four will take place in the computer pool. Students will get to know matlab, a widely used software that allows to compute numerical solutions. The importance of matlab of course goes much beyond behavioural macroeconomics, economics or business administration. It is used in finance, in mathematics and in many other fields. Large banks and insurance companies also use matlab (or closely related other numerical software). Students will learn matlab from scratch (no previous programming experience is required) and learn how to plot figures, run loops, use if-conditions and solve differential equations. All of this will be taught using the questions on the problem sets of this course. A close link between economic intuition and numerical solutions will always be present.
- Becker and Murphy (1988): “A Theory of Rational Addiction
- Bell (1985): “Disappointment in Decision Making under Uncertainty
- Benabou and Tirole (2003): “Intrinsic and Extrinsic Motivation
- Benjamin, Heffetz, Kimball and Rees-Jones (2012): “What Do You Think Would Make You Happier? What Do You Think You Would Choose?
- Bernheim and Rangel (2004): “Addiction and Cue-Tiggered Decision Processes
- Bleichrodt and Wacker (2015): Regret Theory: A Bold Alternative To The Alternatives
- Brandstätter, Güth and Kliemt (2010): Psychology and Economics rather than Psychology vesus Economics: Cultural differences but no barriers!
- Caplin and Leahy (2001): “Psychological Expected Utility Theory And Anticipatory Feelings
- Caplin and Leahy (2004): “The supply of information by a concerned expert
- Clark and Oswald (1994): Unhappiness and unemployment.
- Easterlin (1974): Does Economic Growth Improve the Human Lot? Some Empirical Evidence
- Fehr and Schmidt (1999): A Theory of Fairness, Competition, and Cooperation
- Frey and Stutzer (2002): “What Can Economists Learn from Happiness Research?
- Grant, Kajii and Polak (2001): “Different notions of disappointment aversion
- Gul (1991): “A Theory of Disappointment Aversion
- Kahnemann and Tversky (1979): Prospect Theory: An Analysis of Decision under Risk
- Kahneman, Wakker and Sarin (1997): “Back to Bentham? Explorations of Experienced Utility
- Köszegi (2006): “Emotional Agency
- Kleinginna, P., and A. Kleinginna (1981): “A Categorized List of Emotion Defi…nitions, with Suggestions for a Consensual Definition
- Kops and Wälde (2011): “Why do some decisions take so long?
- Laibson, D. (2001): “A Cue-Theory of Consumption
- Loewenstein (2000): “Emotions in Economic Theory and Economic Behavior
- Loewenstein and Lerner (2003): The Role of Affect in Decision Making
- Loewenstein, G., T. O’Donoghue, and M. Rabin (2003): “Projection Bias in Predicting Future Utility
- Loomes and Sugden (1982): Regret Theory: An Alternative Theory of Rational Choice under Uncertainty
- Loomes and Sugden (1986): “Disappointment and Dynamic Consistency in Choice under Uncertainty”
- Ohtake (2012): Unemployment and Happiness
- Rabin (1993): Incorporating Fairness into Game Theory and Economics
- Rayo and Becker (2007): “Evolutionary Efficiency and Happiness
- Rick and Loewenstein (2008): The Role of Emotion in Economic Behavior
- Lewis, Haviland-Jones and Feldman Barrett (2008): Handbook of Emotions
- Sacharin, V., K. Schlegel, and K. Scherer (2012): “Geneva Emotion Wheel Rating Study
- Sargent (2008): Rational Expectations
- Shaver, p., J. Schwartz, D. Kirson, and C. O‘Connor (1987): “Emotion Knowledge: FurtherExploration of a Prototype Approach