Lecture 1: This is a general introduction, a discussion of the syllabus and a description of the assessment.
Lecture 2: Monty Hall's Three Doors Problem. This is deliberately chosen as our opening topic as it is a simple individual problem with an easy but unintuitive solution. Wikipedia describes the problem: "Suppose you're on a game show, and you're given the choice of three doors: Behind one door is a car; behind the others, goats. You pick a door, say No. 1, and the host, who knows what's behind the doors, opens another door, say No. 3, which has a goat. He then says to you, "Do you want to pick door No. 2?" Is it to your advantage to switch your choice?" What would YOU do? We will start by studying the paper "Monty Hall's Three Doors: Construction and Deconstruction of a Choice Anomaly" by Dan Friedman in the American Economic Review in 1998.
Lecture 3: Beauty Contests. This is a rather inappropriate name for an interesting problem in a contest in which all the participants have to state a number (in some given range), and the winner is the contestant who has a stated number closest to some fraction of the mean stated number of all the contestants. There is an optimal strategy (or at least a Nash Equilibrium) stated by Game Theory but this does not seem to correspond to actual behaviour. We study the first experiment on this topic - "Unravelling in Guessing Games: and Experimental Study" by Rosie Nagel in the American Economic Review in 1998.
Lecture 4: Herd Behaviour. Herding is an interesting phenomenon which appears in many contests - when people follow what other people are doing, presumably extracting information from other people's choices. The interesting question is whether this is rational in some sense and moreover whether it is actually true. We study two experiments that have addressed this issue: "Information Cascades in the Laboratory" by Lisa Anderson and Charlie Holt in the American Economic Review in 1997 and "Two Experiments to Test a Model of Herd Behaviour" by Louise Allsopp and John Hey in Experimental Economics in 2000.You might also like to browse through the two articles on which these experiments were based, respectively "A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades" by Sushil Bikhchandani et al in the Journal of Political Economy in 1992, and "A Simple Model of Herd Behavior" by Abhijit V Banerjee in the Quarterly Journal of Economics also in 1992.
Lecture 5: Bubbles and Crashes in Markets: In the light of recent events, it is interesting to understand whether (though we already know the answer to this) and why bubbles and crashes occur in financial markets. We study a market in which such events should not happen - and we look at a fascinating paper "Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets" by Vernon Smith (a Nobel Prize winner), Bob Suchaneck and Arnie Williams in Econometrica in 1998 which shows how and when they do occur. First we should look at one of Smith's earlier papers "An Experimental Analysis of Competitive Market Behaviour" in the Journal of Political Economy in 1962 where he provides the groundwork for his bubbles paper.
Lecture 6: Games.Many of the preceding lectures have been concerned with behaviour in groups of individuals. Economists use Game Theory to predict behaviour in such situations. This lecture takes us back to basics and explores a number of game situations. Particular importance is attached by economists to the idea of a Nash Equilibrium in games. There are an enormous number of such games studied by economists: ultimatum games, dictator games, public goods games, repeated games, dynamic games. A stimulating analysis of experiments in all these areas, and the theory's ability to explain the data is in a fascinating paper "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions" by Jacob Goeree and Charlie Holt in the American Economic Review in 2001. We will study some parts of this paper.
Lecture 7: Expected Utility theory. In a seminal article in Econometrica Arrow stated the famous Allais Paradox. This is an example of the apparent violation of the generally-accepted theory of behaviour under risk - that of Expected Utility (EU). This implies, for example, that if you prefer the certainty of £100 to a gamble between £250 and £0 each with probability one-half, then you should prefer a gamble between £100 and £0 (each with probability one-half) to a gamble between £250 and £0 with probabilities one-quarter and three-quarters. Do you? If not, you violate EU. This lecture explores the many experimental investigations into EU and its violation. A good overview of the experimental evidence can be found in "Developments in Non-Expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk" by Chris Starmer in the Journal of Economic Literature in 2000, though I should warn you that this paper is quite tough and you are not expected to understand it all. A simpler, earlier paper is "Choice under Uncertainty: Problems Solved and Unsolved" by Mark Machina in the Journal of Economic Perspectives in 1987.
Lecture 8: Do people plan? We stay with individual behaviour in this lecture and study whether people behave as economists would want them to do, here in the context of dynamic decision making. Crucial to economists' stories is that people plan their future moves. The lecture is built around "Do People Plan?" by the Three Johns: Bone, Hey and Suckling, published in Experimental Economics in 2009.
Lecture 9: Summary and overview and a glimpse of the future.You may find it interesting to browse very selectively the two volumes of Carbone E and Starmer C, New Developments in Experimental Economics, Edward Elgar, 2007.