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Advanced Microeconomics (L1061)
Essay

The coursework for this module is a 1500-word essay due before 18th April 16:00 by esubmission. Your essay should answer the following question:
Essay Title: Does expected utility theory provide a good explanation of behaviour in the
presence of risk?
Recommended readings:

1. Rabin, Matthew and Richard H. Thaler (2001), “Anomalies: Risk Aversion”, Journal of
   Economic Perspectives, Vol. 15, No. 1, pp. 219-232
2. Kahneman, Daniel, Jack L. Knetsch, Richard H. Thaler (1991), “Anomalies: The Endowment
   Effect, Loss Aversion and Status Quo Bias”, Journal of Economic Perspectives, Vol. 5, No. 1,
   pp. 193-206
3. Post, Thierry, Martijn J. Van den Assem, Guido Baltussen, and Richard H. Thaler (2008),
   “Deal or no deal? decision making under risk in a large-payoff game show”, The American
   economic review pp. 38-71
4. Tversky, Amos and Daniel Kahneman (1986), “Rational Choice and the Framing of
   Decisions”, Journal of Business, Vol. 59, No. 4, Part 2, pp. S251-S278
5. Barberis, N. C. (2013). Thirty years of prospect theory in economics: A review and
   assessment. Journal of economic perspectives, 27(1), 173-196.
6. Cox, J. C., Sadiraj, V., Vogt, B., & Dasgupta, U. (2013). Is there a plausible theory for decision
   under risk? A dual calibration critique. Economic Theory, 54(2), 305-333.
7. Fakir, A. M. (2021). Schooling and small stakes risk aversion: Insights from a rural-poor
   community. Economics Letters, 207, 110040.
   Remember it is essential to complete your readings well before you start to write your essay,
   and your essay should reflect your learnings fom the readings assigned complementing the
   theories covered in this module. So it is always a good idea to brainstorm first. You are welcome
   to extend your essay beyond the readings assigned, however, it is recommended to cover the
   assigned readings first.
   2
   Advice on essay writing:
   When writing your essay you might wish to take on board the following broad guidelines.

• Use the introductory paragraph(s) to indicate you have correctly identified the main
  theme(s), and briefly outline how you propose to tackle the topic.
• Use subsequent paragraphs to deal systematically with all the relevant points.
• Use a new paragraph for each new aspect of the question and, to ensure continuity of
  the argument, provide some meaningful link between each paragraph.
• Ensure that diagrams are integrated into the essay discussion. In addition, ensure that
  they are properly labelled with each illustration given a title and/or numbered, and
  appropriately cited (i.e., refer to the relevant page numbers of the textbook, journal
  article or the lecture notes from which they are taken, if relevant).
• Ensure tables are integrated into the essay discussion. In addition, ensure that they are
  properly titled and/or numbered, and appropriately cited (i.e., refer to the relevant page
  numbers of the textbook, journal article or the lecture notes from which they are taken,
  if relevant).
• Summarise the main features of your argument(s) in your concluding paragraph(s).
  Footnotes and Endnotes
  You can use either footnotes or endnotes in your essay. Regardless of which you use, be
  consistent throughout your essay. Please note that the footnotes or endnotes should be used
  sparingly.
  Word limit and presentation
  The word limit includes quotations in the text, but does not include the bibliography,
  footnotes/endnotes, appendices, abstracts, or tabulations of numerical data and their captions.
  Please word-process your essays using either one-and-a-half or double-spacing. You have a +/-
  10% lee-way on the word limit.
  The Bibliography
  It is essential that you include in your essay accurate citations to all academic works or other
  source materials used in support of your argument(s). As a general rule, do not cite for the sake
  of citing, but to give emphasis to, or provide evidence for, a particular point or argument. Each
  citation, irrespective of source, nature, length or importance, must be fully acknowledged using
  an accepted convention for doing so. The Harvard system is extensively used in economics for
  this purpose, though you can use a different system provided you are consistent.
  3
  Writing well and avoiding misconduct
  The University’s S3 guide to study skills gives advice on writing well, including hints and tips on
  how to avoid making serious mistakes.
  Visit http://sussex.ac.uk/s3/writingwell and make use of the resources there. You will also find
  helpful guides to referencing properly and improving your critical writing skills.
  It is important to ensure that the quality of the written English used in your essay is to a high
  standard and contains correct spelling and grammar usage. Note that Microsoft Word has a
  built-in spelling and grammar checker, so make use of it if you are unsure (but be careful, as it is
  not infallible!). The International and Study Abroad Office offer support and also provide a
  useful webpage listing support for international students. Please see
  http://www.sussex.ac.uk/s3/ for more details.
  The full University rules on academic misconduct are set out here:
  http://www.sussex.ac.uk/academicoffice/resources/misconduct
  Dealing with difficult circumstances
  If you are dealing with difficult circumstances, such as illness or bereavement, please seek
  confidential advice from the Student Life Centre. They can advise you on how best to deal with
  the situation and what evidence you will need in order to file for mitigation.

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