Watch The Economics of Uncertainty

2015
1 Season

The Economics of Uncertainty from The Great Courses Signature Collection is a fascinating educational series starring Connel Fullenkamp, a professor of economics and finance at Duke University. In this series, Fullenkamp delves into the complex and fascinating world of decision-making under uncertainty.

Throughout the course, Fullenkamp covers a wide range of topics related to economic uncertainty, including risk aversion, game theory, and the role of information in decision-making. He draws on a diverse range of examples and case studies to illustrate these concepts, from the history of insurance to real-world examples of strategic decision-making in business.

One of the key themes of the course is the idea that economic decisions are inherently uncertain, and that the best strategies for making these decisions involve taking into account the probabilities of various outcomes. Fullenkamp explains how we can use statistical techniques and other tools to estimate these probabilities, and how we can use this information to make better decisions in the face of uncertainty.

Another important theme of the course is the concept of risk aversion, which relates to how people are willing to take risks in different situations. Fullenkamp explores the different factors that can influence risk aversion, such as personal preferences and financial constraints, and he discusses strategies for managing risk in various contexts.

Throughout the course, Fullenkamp also touches on a variety of other topics related to decision-making, such as the role of emotions and cognition in the decision-making process, and the effects of social factors such as peer pressure and group dynamics.

One of the strengths of the course is the way that Fullenkamp takes complex concepts and makes them accessible to a broad audience. He uses clear language and accessible examples to help viewers understand the often-challenging concepts involved in decision-making under uncertainty.

Overall, The Economics of Uncertainty is an excellent resource for anyone who wants to learn more about decision-making under uncertainty, whether as a student of economics or as someone looking to make better decisions in their personal or professional life. With its engaging style, clear presentation of complex ideas, and practical insights into the psychology of decision-making, this course is sure to be a valuable learning experience for viewers of all levels.

The Economics of Uncertainty is a series that is currently running and has 1 seasons (24 episodes). The series first aired on May 29, 2015.

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Seasons

24. Stress Testing Your Finances

May 29, 2015

Close by learning how to take the economic "stress test," inspired by bank evaluations made in the wake of the 2008 financial crisis. This simple exercise helps you anticipate the most significant reversals you are likely to meet, helping you approach uncertainty with confidence and calm.

23. Hedging Business and Personal Risks

May 29, 2015

Examine tools that professionals use to hedge against financial risk, such as forward contracts and financial options. Study the suitability of these instruments for individuals. Then probe a more flexible strategy: real options, which are opportunities that can be seized or declined as conditions warrant.

22. No Limits to Growth

May 29, 2015

Look at possible catastrophes that are decades away: alarming trends such as overpopulation, scarcity of raw materials, and environmental degradation. Observe that society has so far escaped the worst predictions of experts, and explore why that is and what the future may really hold.

21. Global Trade in Employment

May 29, 2015

Free trade produces uncertainty and anxiety in economic players at all levels. Understand how comparative advantage governs who benefits in the competition for international trade. Then hear Professor Fullenkamp's tips for how individuals can cultivate their own comparative advantage in the labor market.

20. Regulation, Innovation, Excess

May 29, 2015

Government policies are a major source of uncertainty, since they can alter our lives in unpredictable ways. Study the surprising outcomes from several government interventions in the U.S. economy. In particular, look at the regulatory cycle model, which shows how a complex system responds to new regulations.

19. Extreme Markets

May 29, 2015

At any given moment, some market somewhere is making headlines because it's either hitting record highs or crashing down to earth. Learn how to approach the uncertainty of financial markets with savvy and common sense. Focus on strategies that can help you reach your financial goals.

18. The Danger of Inflation

May 29, 2015

Even in times of low inflation, no one knows when prices will take off again. Look into the causes of inflation, efforts to control it, and the surprising wisdom of promoting a small degree of inflation. Also examine the disaster of deflation, which is a generalized drop in prices.

17. The Business Cycle's Wheel of Fortune

May 29, 2015

Nothing is as certain and yet so unpredictable as the business cycle; economic expansion is invariably followed by a recession--and vice versa--but economists are at a loss to forecast the timing. Study different theories of the business cycle, and learn how to prepare for the next boom or bust.

16. Uncertainty in the Numbers

May 29, 2015

Statistics are essential tools for dealing with uncertainty, but they should be used with caution. Put numbers such as the unemployment rate and consumer price index into context, probing how such statistics are measured and what the sampling error and confidence interval say about their reliability.

15. Mayhem! Insurance Protection

May 29, 2015

Investigate the multitude of ways you can insure against misfortune, from extended warranties to travel insurance to identity-theft protection--not to mention health, car, home, and life insurance. Learn how insurance products work, and get tips on what you should cover and at what value.

14. Caring, Sharing, and Risk Bearing

May 29, 2015

Altruism is more complicated than simple selflessness. Instead, it may be the world's oldest and most effective risk-sharing system. Discover the power of viewing altruism as economists do--as a mathematical expression called the utility function. Also study altruism's connection to the moral hazard problem.

13. Compensation Traps

May 29, 2015

Delve into the uncertain realm of compensation contracts, which ideally motivate employees to do a good job, but too often have unintended consequences. Survey the pluses and minuses of efficiency wages, piecework, milestone payments, commissions, promotions, stock options, and other incentives.

12. The Principal-Agent Problem: When Mice Play

May 29, 2015

Focus on a special case of moral hazard: the principal-agent problem, in which an agent is appointed to handle a matter beyond the expertise of the person doing the hiring (the principal). The agent may easily take unfair advantage of this situation, which covers everything from home repair to government contracting.

11. Moral Hazard: Whom Do You Trust?

May 29, 2015

Examine another outcome of asymmetric information: the moral hazard problem. This peril arose spectacularly in the 2008 financial crisis, with the widespread sale of bad loans to unwitting investors. But it also lurks in many small-scale transactions. Discover what you can do to combat it.

10. Adverse Selection: Hiding in Plain Sight

May 29, 2015

Adverse selection occurs when the lack of information by one party leads to a distorted result. See how this situation surfaces in many different contexts, from used car sales to investment deals to Internet purchases. Learn to recognize the adverse selection trap, and know how to correct it.

9. Game Theory: Reveal or Conceal?

May 29, 2015

Use game theory to shed light on strategic interactions, which are competitive transactions involving people or organizations. Such interactions can range from negotiating the sale of a house to pricing products for maximum sales. As an example, analyze an intriguing competition between two potato chip brands.

8. Gambling Economics

May 29, 2015

Gambling makes some people nervous, but it gives valuable insight into any type of risk-taking activity, including investing and entrepreneurship. Explore the role of games of skill and chance in the economy, and apply their lessons to activities such as banking and retirement planning.

7. Decision Science Tools

May 29, 2015

When is a risky project worth doing? Learn how corporate managers decide whether they should undertake a new enterprise. Discover that simple graphic aids, such as scenario analysis and decision trees, are powerful tools for weighing risk in both business and daily life.

6. The Reward in Risk

May 29, 2015

Having learned to convert uncertainty to risk in Lecture 2, now go deeper by investigating how probabilities can gauge rewards and risks. Test risk-assessing tools used in finance, including expected value, variance, standard deviation, coefficient of variation, Sharpe ratio, covariance, and beta.

5. How We Misjudge Likelihood and Risk

May 29, 2015

Improve your ability to handle uncertainty by studying two ways that people reach decisions. System 1 excels at making snap judgments, while System 2 is analytical, methodical, and more time-consuming. Weigh the strengths and weaknesses of each, focusing on the problem of estimating probabilities.

4. Probability: Frequency or Belief?

May 29, 2015

Examine two different types of probability. Frequency-based probabilities rely on many examples of a phenomenon, while subjective probabilities call on personal experience and judgment, often drawing on relatively few cases. Learn to think critically about these two approaches, and know when to use them.

3. Five Ways to Face the Unknown

May 29, 2015

In dealing with uncertainty, it makes sense to have an arsenal of different strategies. Explore five techniques for risk management that can be used in every sphere of life: producing information, diversifying, sharing risk, avoiding risk, and absorbing risk. Probe instructive examples of each.

2. Turning Uncertainty into Risk

May 29, 2015

When faced with an uncertain situation, try turning it into a "risky" situation. Risk is probability. Knowledge is power. This may sound counterintuitive, but it's a surprisingly effective approach, pioneered by University of Chicago economist Frank Knight. See where it applies and does not apply in economic settings.

1. Man, Nature, and Economic Uncertainty

May 29, 2015

Professor Fullenkamp begins with "black swan" events--occurrences that are considered as improbable as black swans. A notable recent example is the 2008 financial crisis. This leads to an examination of the nature of uncertainty and the best strategy for dealing with it.

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Where to Watch The Economics of Uncertainty

The Economics of Uncertainty is available for streaming on the The Great Courses Signature Collection website, both individual episodes and full seasons. You can also watch The Economics of Uncertainty on demand at Amazon Prime, Amazon and Kanopy.