Financial economics with special focus on the role of information and the use of markets as forecasting devices.
The course introduces students to the ideas and theoretical tools that economists use to understand the functioning of large markets and their design for prediction purposes. Once familiar with the key concepts, students learn to build intuition that help understand empirical facts.
Topics include choice under uncertainty, asset valuation in multi-period models, arbitrage theory, market microstructure, information aggregation, probability elicitation, prediction markets.
Prerequisites: ECON 121, and completion of all MATH requirements of the economics major. A course covering basic probability theory such as ECON 131 or ECON 135 is recommended.