This course introduces students to the testing of causal hypotheses with statistical methods, focusing on social-science applications.  Causal inference in this setting requires melding the language of mathematical statistics with the reality of human decision-making.  Successfully testing a social-science hypothesis thus requires both facility with the mathematics, as well an understanding of how people actually behave.  This course gives students an introduction to the math, and experience in translating the math to reality.

The course is timed according to the scripted schedule of the masters’ program in Public Choice, and is tailored to the needs of that program.  As a result, non-PCP students should be aware that the course will proceed at a substantially faster pace than other courses.

The first week is the program’s Math Camp, consisting of 10 lecture hours (no quarters) and nightly group homework assignments.  The following three weeks form the Statistics component, consisting of 24 lecture hours (no quarters), twice-a-week group homework assignments, and a final exam. 

The success of the Nordic countries' education systems have held the interest of educators and policy makers globally for years. Scores of teachers, principals and legislators from the US and elsewhere have visited Finland in hopes of understanding what it is that Finland does that could be copied and applied at home to obtain similar results. This course explores the goals, structures, incentives, funding and results of various education systems, with a focus on the Finnish and American systems. Recognizing that education systems are complex, the aim is to understand what combination of factors (class sizes, funding, teacher training, teaching philosophy and methods, etc) are most conducive in terms of encouraging and educating the student population.

Visiting teacher: Giuseppe Attanasi, University of Lille
(LEM: Lille, Economics & Management)
www.giuseppeattanasi.com
(E-mail: giuseppe.attanasi@univ-lille1.fr)

Teaching Method
In each lecture:
(a) we will introduce a specific economic problem and run a 30 minutes classroom experiment representing this problem in the lab;
(b) we will introduce and analyze the theoretical/behavioral model ‘linked’to the proposed experiment, and formulate behavioral hypotheses that the experiment just run was aimed at testing;
(c) we will analyze the experimental results and check whether they verify the behavioral hypotheses. This might lead to behavioral extensions of the proposed model, so as to account for systematic deviations from predicted behavior;
(d) we will discuss the methodological and design issues of the experiment and eventually propose alternative implementations. The interaction between the teacher and the students attending the course is a necessary condition for the implementation of this 4-step teaching method.

Final Project
To get the course credits, a student should participate in at least 6 of the 7 classroom experiments run during the lectures (one per lecture). At the end of the course, each student will be assigned one of the 7 topics analyzed during the course. The student will have 2 weeks to work on an experimental project related to the topic.
The project can consist in:
(a) a review of the most recent literature,
(b) a report on experimental data provided by the teacher,
(c) the proposal of a new experimental design meant to deal with research questions on the topic, not yet analyzed in the experimental literature.
Once assigned the topic, the student will choose one of these three forms— review, report or proposal— for the …nal project, and the teacher will provide, respectively, relevant references, data or suggestions.

Detailed syllabus
We will analyze the methodological issues of key experimental topics in economics, and the behavioral features of recent extensions of related theoretical models of individual and strategic decision making.
We will mainly concentrate on the following topics:
 Lecture 1: Puzzles in Risky Decisions
 Lecture 2: Risk Aversion in the Lab
 Lecture 3: Ambiguity Aversion in the Lab
 Lecture 4: First-Price Auctions
 Lecture 5: Almost-Competitive Markets
 Lecture 6:VoluntaryContributionGames (Monetary andNon-monetary Incentives)
 Lecture 7: SocialDilemmaGames (Distributional andBelief-dependentPreferences)

Subject 1: Transatlantic Relations during the Presidency of Barack Obama and beyond

Learning Objectives:

This course is designed to introduce the students to the major issues in American policy towards the European countries during the presidency of Barack Obama and Donald Trump. The lecture is designed to cover the main facts and opinions about the state of transatlantic relations. During the panel discussion the students will be able to ask the questions and express their opinions.

The main objective for the participants of the course are:

• Understanding of Barack Obama’s approach to foreign policy
• Knowledge of the principles and assumptions of US policy towards Europe
• Critical thinking about current challenges in transatlantic relations in the context of the world politics
• The changes in Donald Trump’s policy agenda

Topical Outline:

• Cooperation in coping with the international security challenges and threats  (Afghanistan, Iran, proliferation of WMD, climate change, etc.)
• Cooperation in NATO
• Transatlantic economic relationship during the financial crisis (negotiations on TTIP)
• Cooperation on fighting ISIS
• Ukrainian crisis

Subject 2:Economic sanctions as an  instrument of foreign policy – the case of sanctions against Iran and Russia

Learning Objectives:

• Understanding of  the objectives of U.S. and EU sanctions
• Knowledge of the historical background and character of sanctions
• Critical thinking about their  nature and outcomes

Topical Outline:

• Theory of sanctions as an instrument of economic and political coercion; their  utility, and consequences
• Chronology of key events
• The U.S., UE and UN sanctions against Iran imposed in the 21st century
• International cooperation with senders
• Updated impact of the sanctions

Visiting teacher. One week course in March.

This course examines novel ways in which economics studies changes in welfare. In doing so, works will be covered using behavioral, experimental, empirical, and theoretical techniques. Behavioral and experimental economics are used to examine the relationship between welfare and non-standard preferences such as time inconsistency, risk aversion, and other-regarding preferences. Topics cover classic issues with multi-player cooperation (e.g. public goods games and common pool resources), as well as introductions to contemporaneous research areas in economics such as two-sided matching markets (e.g. school-choice) and policies that exploit behavioral paradoxes in order to increase welfare (e.g. ``Nudging’’).

Course schedule:

Class 1: Course introduction, Nash Equilibrium, Prisoner’s Dilemma, coordination games

Class 2: Public goods, volunteer’s dilemma, common pool resources, minimum effort game, and Stag Hunt

Class 3: Risk, Prospect Theory, objective versus subjective uncertainty (e.g. Allais and Ellsberg Paradox)

Class 4: Other regarding preferences and time preferences

Class 5: Response time and competitiveness

Class 6: Market successes and failures (e.g. “Lemons” and the Endowment Effect)

Class 7: Influencing behavior: incentives and nudges

Class 8: Two-sided matching markets

Class 9: Z-tree tutorial (program for designing and running laboratory experiments)

Class 10: Final exam