T. A repeat offender is in mm with the same judge from his previsrua mass. In the past the defendant has
beer: furund tn be either guilty cfw_'3 or not guilty cfw_N. If a judge is susceptible tn the b
Decision-Making Under Certainty
Chapter 3
September 1st , 2016
Last Chapter
I
Rational Choice
Decision-Making Under Certainty
I
Rational preferences (transitive and complete)
Econ 436 - Behavioral Eco
October 25th , 2016
Intertemporal Choice
Chapter 9
Time Consistency
I
You can either receive:
Intertemporal Choice
I
A: $20 on December 1st
Econ 436 - Behavioral Economics
I
B: $21 on December 11th
I
Chapters 1-3
Homework #1
1. Determine the largest universe of people in which the
following relations are complete and transitive.
(a) Has a car that is at least as fast as that owned by.
(b) Makes at
October 4th , 2016
Rational Choice Under Risk and Uncertainty
Chapter 6
Choice under uncertainty
Rational Choice Under Risk and Uncertainty
I
Choice under uncertainty -
I
To bring an umbrella or not?
The Discounted Utility Model
Chapter 8
October 20th , 2016
Interest
The Discounted Utility Model
I
When you borrow (lend) money you pay (receive) interest.
I
Terminology:
Econ 436 - Behavioral Economi
Chapter 1
Agenda
August 23rd , 2016
Course Introduction
What is Economics?
I
What is Economics?
What is economics?
I
Examples:
A Brief History of Economics
Syllabus
Examples
I
Tools
Brief History of E
October 11th , 2016
Decision Making Under Risk and Uncertainty
Chapter 6
I
Decision Making Under Risk and Uncertainty
Econ 436 - Behavioral Economics
I
October 11, 2016
Standard Theory
Imagine that th
September 13th , 2016
Probability Theory and Judgment
Chapter 4
Probability
Probability Theory and Judgment
I
Probability Theory developed because of gambling.
I
Gambling is essentially as old as the
Chapter 2
Agenda
Rational Choice Under Certainty
August 25th , 2016
Rational Choice
Preferences
Rational Preferences
I
Choice under certainty
I
Goal:
Proofs
Indifference and Strict Preferences
I
Axiom
9. Suppose you have $100 and good it costs $10 per unit and good B costs $25 per unit. If you have
preferences such that you are always willing to substitute 3 units of good A for 1 unit of good E and
1 Analytical Questions [as points eeeh, as points total
1. cfw_a Fbr each of the four lines helm:
i. Circle the type nf the etetementr either A cfw_axiom er D [denitinn.
ii. Circle the name of the sta
cfw_3:5
2. Consider the following value function for dollars:
cfw_-3,-9
[a] Calculate the value for the following points cfw_3,3,1.1,2.3. Plot thae points on the above
panel and draw a line through
2 Multiple Choice (3 points each, as points total)
1.
Which of the following is a descriptive claim:
a) People should osnsidsr opportunity costs.
b People sometimes overestimate oertain probabilities.
13. What is the probability that out of 4 people, at least 2 of them have a birthday in the name month.
cfw_Assuming each month in equally likely to be born in.
_ 12x11x1><9
a] l rexrexrexre
14. Consi
13. Consider the prefemnoes: I like peanut butter and jelly1 hot I only want them :in the ratio 2 units of
peanut butter for each 1 unit of jelly. Any additional beyond that ratio is not benecial to m
4. How many combinations of birthdays are there for two individuals:
5. When looking at a large data set of used car auctions, there 1was a relatively large price difference between
cars that had 1999
3. You are watching the presidential debate, and trying to gure out whether the candidate is a liar cfw_L.
If the candidate is liar. then they tell the truth cfw_T 10% of the time and they lie cfw_F 9
l. Suppoee you roll two dioe. Which pair of events helm.r is dependent.
a] Dland D2=4
h DI+D2=4and 32:1
3
e] Dl=1andD2=
d] D1+DZ=TendD2=5
17. Consider a. random Word that has a. length of 4 letters an
Chapters 4-5
Homework #2
1. Consider a class with N students. Calculate the following
probabilities: (it may help to answer the question for N = 2
initially, and work your way up. Also assume that the