Contents and purpose of the course
The main objective of this course is to present some topics on Information Economics. In particular recent developments in information acquisition by decision-makers and communication in agency models will be illustrated. At the end of the course students should be able to understand scientific articles on these topics and to perform their own research project

Topics
1. Emotions and Economics
2. Anticipatory utility and “aversion to information”
3. Information gathering by “emotional” decision-makers
4. Communication in “emotional agency”
5. Endogenous adverse selection in insurance markets
6. Bi-dimensional adverse selection in the labor market

Readings
Barigozzi, F. and R. Levaggi (2009). "Emotional Decision-Makers and Anomalous Attitudes towards Information", forthcoming in the Journal of Risk and Uncertainty.
Barigozzi, F. and Dominique Henriet (2009), "Genetic Information: Comparing Alternative Regulatory Approaches when Prevention Matters", forthcoming in the Journal of Public Economic Theory.
Caplin A, and J. Leahy (2001). "Psychological Expected Utility Theory and Anticipatory Feelings", Quarterly Journal of Economics, 55-80.
Cohen, JD (2005). "The vulcanization of the human brain: A neural perspective on interactions between cognition and emotion", Journal of Economic Perspectives, 19, 3-24.
Crocker K.J. and A. Snow (1992), "The social value of hidden information in adverse selection economies", Journal of Public Economics 48, 317-347.
Doherty, N.A. and P.D. Thistle (1996), "Adverse selection with endogenous information in insurance markets", Journal of Public Economics 63, 83-102.
Elster, J. (1998), "Emotions in Economic Theory", Journal of Economic Literature (XXXVI), 47-74.
Heyes A., (2005) "The economics of vocation or -why is a badly paid nurse a good nurse-?", Journal of Health Economics 24, 561-569
Kozsegi, B. (2003). "Health Anxiety and Patient Behavior", Journal of Health Economics, 22 , 1073-1084.
Kozsegi, B, (2006). "Emotional Agency", Quarterly Journal of Economics,121(1): 121-155.
Kreps, D. and E. Porteus (1978). "Temporal Resolution of Uncertainty and Dynamic Choice Theory", Econometrica, 46, 185-200.
Loewenstein, G, (2000), "Emotions in Economic Theory and Economic Behavior", AEA Papers and Proceedings 90 (2), 427-432.
Rick, S. and Loewenstein, G. (in press). "The Role of Emotion in Economic Behavior", in LEWIS, M., HAVILAND-JONES, J.M. & FELDMAN-BARRETT, L.F. (eds), The Handbook of Emotion (3rd Ed). New York, N.Y.: Guilford

Additional readings for students' presentations

Besley T., Ghatak M. (2005), "Competition and Incentives with Motivated Agents", American Economic Review 95(3), 616-636.
Caplin, A. and J. Leahy (2004), "The Supply of Information by a Concerned Expert", Economic Journal, 114:487-505.
Cremer J. and F. Khalil, (1992), "Gathering Information before Signing a Contract", The American Economic Review, 82(3), pp. 566-78.
Delfgaauw and Dur (2007), "Signaling and screening of workers' motivation", Journal of Economic Bahavior and Organization 62, 605-624.
Hermalin, B. and M. Katz (2006), "Privacy, property rights and efficiency: the economics of privacy as secrecy", Quant Market Econ 4, 209-239.
Posner R.A. (1981), "The economics of privacy", The American Economic Review, 71(2), pp. 405-409.
Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, vol. 83(5), pages 1281-1302, December
Yariv, L., (2005). "I'll see it when I believe it - A simple model of Cognitive Consistency". Mimeo, UCLA.

On emotions and decision-making:

BECHARA, A. (2003). "Risky business:emotion, decision -making and addiction". Journal of Gambling Studies 19(1): 23-51
BECHARA, A., DAMASIO, A.R. (2005). "The somatic marker hypothesis; a neural theory of economic decison". Games and Economic Behavior 52(2): 336-376
BERNS, G., CHAPPELOW, J., CEKIC, M., ZINK, C., PAGNONI, G. & MARTIN-SHURSKI, M. (2006), “Neurobiological Substrates of Dread”, Science, 312(5774): 754-758
KOENIGS, M. & TRANEL, D. (2007). "Irrational economic decision-making after ventromedial prefrontal damage: evidence from the ultimatum game". The Journal of Neuroscience 27(4): 951-956
LOWENSTEIN, G.A. & LERNER, J.S. (2003), “The Role of Affect in Decision Making”, in DAVIDSON, R.J., SCHERER, K.R. & GOLDSMITH, H.H. (eds), Handbook of Affective Sciences, Oxford University Press
MCCLURE, S.M., BOTVINICK, M.M., YEUNG, N., GREENE, J.D. & COHEN, J.D. (2007). "Conflict monitoring in cognition-emotion competition", in J.J. GROSS (ed), Handbook of Emotion Regulation. New York: Guilford.
SANFEY, A.G., RILLING, J.K., ARONSON, J.A., NYSTROM, L.E., COHEN, J.D. (2003). "The neural basis of economic decision-making in the ultimatum game". Science 300(5626): 1755-1858.
SANFEY, A.G. (2007). "Social decision-making: Insights for game theory and neuroscience". Science 318(5851): 598-602
SHIV, B., LOEWENSTEIN, G., BECHARA, A., DAMASIO, H., DAMASIO, A.R. (2005). "Investment behavior and the negative side of emotion". Psychological Science 16(6): 435-439
ZAK, P.J. (2007). "The neuroeconomics of trust", in FRANTZ, R. (eds), Renaissance in Behavioral Economics: Essays in honour of Harvey Leibenstein. London: Routledge
ZEELENBERG, M. & PIETERS, R. (2006). "Feeling is for doing: a pragmatic approach to the study of emotions in economic behavior", in DE CREMER, D., ZEELENBERG, M. & MURNIGHAN (eds), Social Psychology and Economics. Mahwah, N.J.: Erlbaum
ZIZZO, D.J. (2003). "Anger, rationality and neuroeconomics". University of Oxford, Department of Economics Discussion Paper, Number 128

Course plan