Behavioral Economics: Nature and Culture in Decision Making

Behavioral economics uses psychological experimentation to develop descriptive theories about human decision making. This session aims to explain the role of human nature in economic decisions by answering the following questions: how do human beings make their own decisions? how do they assign values to economic goods? how do they assign probability to uncertain events? what is the role of physiological, psychological and social conditions in decision making? What are the tools and methods that economic research can use to answer these questions?

By Prof Riccardo Palumbo, University of Chieti-Pescara

Experimental Methods in Behavioral Finance

Economic experiments are conducted in controlled laboratory environments in order to test economic theory, look for behavioral regularities, formulate new theories to explain unpredicted regularities and make policy recommendations by testing new policies and fine-tuning existing ones. Behavioral finance deals with the study of several financial decision-making mistakes that we could avoid, if only we were familiar with the distortions that caused them. This session will be an introduction to the experimental economic methods used to study psychological distortions in in financial decisions. During the first hour, we will review behavior in individual investment decisions in lotteries with known probabilities (e.g., bonds) and in lotteries with unknown probabilities (e.g., annuities), and the corresponding elicitation of investors’ attitude toward respectively risk and ambiguity. During the second hour, we will review aggregate behavior in financial markets under different bargaining mechanisms (call markets, double auctions, over the counter markets), introducing experimental measures of market inefficiency.

By Professor Giuseppe Attanasi, Université Côte d’Azur, Nice

Strategizing and attention in games

This session will bring students through two groups of studies designed to explore strategic reasoning and attention in games. The first group of studies uses neuroimaging results from the beauty contest game to identify a network associated with strategic thinking and to show how the brain does not distinguish learning from reasoning. The second group of studies leverages eye-tracking to measure the dynamic patterns of visual information acquisition in games. In a first study, participants played one-shot two-player normal-form games in which either, neither, or only one of the players had a dominant strategy. This method allows to predict whether the decision process would lead to equilibrium choices or not, and to attribute out-of-equilibrium responses to limited cognitive capacities or social motives. In a second study, eye-tracking is used to test whether players’ actions are consistent with their expectations of their opponent’s behavior. Implications for the theories of bounded rationality will be discussed.

By Professor Giorgio Coricelli, University of Southern California

Data Analytics for Behavioral Research

This session is designed to help students understand how to leverage data analytics to capture individuals’ emotions and to analyze data gathered through different tools used in behavioral research. The course is divided into two main sections: a theoretical introduction in the morning aiming to discuss the challenges of working behavioral data and the main techniques to overcome such challenges; a hands-on session in the afternoon where students will learn how to analyze sentiment, facial expressions and physiological recordings using R. This course will equip students with both a theoretical and practical knowledge of the main analytics tools and techniques to manipulate and investigate different types of behavioral data. Previous knowledge of R is not required although beneficial.

By Dr. Damien Dupré, DCU Business School

Textual Analysis for New Data Insights

Economics, finance, and accounting, has traditionally relied on mastery of numbers to gain insight into phenomena in their fields, and to attempt to forecast future behavior of these phenomena. This numerical focus has resulted in largely ignoring the vast amount of text data that is available to gain additional rich insights into such behavior. For example, an accounting researcher or analyst, when faced with a 200-page corporate annual report might just extract a few lines of data from the financial accounts, with the other 195 pages of writing in the report devoted to better understanding the firm’s performance set aside as if irrelevant. In this tutorial workshop we will introduce some of the more popular textual analysis techniques, using R, that allow us to extract useful knowledge from textual documents. We will firstly, and briefly, show how to import and clean text data, then we will move on to explore useful analysis techniques. These techniques include statistical investigation and presentation of document content, sentiment analysis, and topic modelling.

By Dr. Micheal Dowling, Rennes School of Business

Behavioral Research in Accounting and Auditing

The session will give an overview of experimental work in accounting and auditing. Research in this area can be roughly divided into experiments designed to analyse the strategic interaction between (at least) two actors or market behaviour, and experiments designed to investigate individual decision-making in an accounting or auditing context. This session presents the main methodological approaches that are typically applied in the more economically oriented and the more psychologically oriented part of experimental research in accounting and auditing. Using examples of published work, the session highlights and critically discusses the experimental design and the typically used methods of data analysis. Moreover, participants will have the opportunity to discuss their own ideas and design choices.

By Dr. Ulrike Stefani, University of Konstanz

Psychophysiology and decision making: neurobiofeedback applications

By Loreta Cannito

It’s the brain economy stupid, a lesson from the nervous system

By Stefano L. Sensi

Economic Experiments in Project Management

By Prof. Maroš Servátka, Macquarie Graduate School of Management

Sex differences in brain structure and function

By Dr Antonella Santuccione & Dr Maria Teresa Ferretti

Financial Advisors and Investor Behavior

By Alessandro Previtero – Kelley School of Business at Indiana University

Investor Expectations and Sentiment in the Stock Market

By Dr Stefano Cassella – Tilburg University

More to be announced…

Paper Development Workshop

The last day of the summer school will be dedicated to development of a paper for the Special Issues published by Journal of Behavioral Economics for Policy (JBEP) titled: “Recent Applications and Developments in Behavioural Economics and Finance”. Participants will be mentored and supported by the teaching team during the whole day. The paper should deal with a critical literature review of a hot topic, with an interdisciplinary approach, eventually leading to a proposal of a new experimental design dealing with a novel research question.