90457 - Economics of Ratings and Rankings

Learning outcomes

At the end of the module, students: - know the theories and frameworks to systematically analyse the role played by rankings and indicators as market-solutions to mitigate the market failures due to incomplete and asymmetric information; - can analyze empirically the diffusion in the use of rankings and ratings – and more generally of performance indicators - in the main markets for trust services with specific reference to financial, health and education services.

Course contents

Markets with asymmetric information: private and public regulatory tools

• Allocative effects of asymmetric information
• Contractual solutions and market regulation
• Quality disclosure and third-party certification
• Accreditation, ratings and rankings
• Credit Rating Agencies

The effects of ratings and rankings

• Financial and insurance markets
• Professional services (health, education and legal services)

Readings/Bibliography

The reading list and the slides for this course will be available on Virtuale.

Teaching methods

Classroom lectures.

Assessment methods

Students who regularly attend lectures during the last two class meetings will be required to give a 15/20 minute presentation on one of the topics covered in the course (max 20 points).

At the end of the course, all students will be required to take a written test (2-3 open-ended questions, max 12 points).

Those who do not choose to give an in-class presentation on the day of the exam will have to take a written test in which they will be given an outline to develop a short essay in 90 minutes (max 20 points).

Students can choose the approach that is more coherent with their own background. However, they are expected to address the proposed themes with a good level of rigour and appropriateness and to take into consideration the interdisciplinary nature of the issues at stake.

Academic dishonesty in any form will not be tolerated. To take the exam, you are required to enroll in Almaesami.

The grade will go from 30 to 18, depending on the level of understanding of the relevant material, and the quality of the writing output. The student has the right to refuse the passing grade obtained only once.

30-27

-Outstanding grasp of the course material.

-Excellent writing output

26-23

-Substantial understanding of the course material.

-Good writing output

25-22

-Decent understanding of the course material.

-Decent writing output

21-18

-Sufficient understanding of the course material.

-Sufficient writing output.

Negative assessment

-Scarce understanding of the course material.

-Scarce writing output.

Teaching tools

Blackboard and chalk. Slides.

Office hours

See the website of Luciano Messori