Neil De Marchi, Duke University
Marina Bianchi, University of Cassino

This is a course Professor Bianchi and I developed and taught to Duke students during the first summer session at VIU, in 2002. I have since taught it in the Michigan-Wisconsin-Duke Florence Program, Fall 2002. It is a major research focus for Professor Bianchi, who has written extensively on several of the topics to be covered and leads an active research group at Cassino related to them.

Economics is more highly refined when it comes to production than consumption, though growing leisure time in many advanced countries, expanding incomes and opportunities to consume, the very importance of consumption expenditures in national income, and a growing empirical literature on disjunctions between income and happiness (or well-being) all suggest that how and why we consume, under what constraints, where the satisfaction in it lies, and so on, seem to warrant more attention. Our aim is to expose students to what economics has to say about such issues and where relevant relate insights from standard economic theory to recent research in psychology and behavioral economics– e.g. literatures on preference reversal, addiction, the properties of goods and the character of stimuli that yield satisfaction, etc. Topics for the course include:

"Comfort" goods and the Jevonian theory of constrained maximization.

Challenges to the law of diminishing marginal utility: Gossen on time in consumption; Adam Smith and Kelvin Lancaster on the consumption not of goods but of their pleasure-yielding characteristics; "creative" goods (Scitovsky and Bianchi).

Key properties of creative goods: novelty and variety and recent neuro-psychological research Berlyne on his critics; studies of aesthetic satisfaction); connectedness between goods (Bianchi and De Marchi); reproducibility, durability, modularity and decomposability (Bianchi), with case study of successful video games.

The importance of skill in consumption: Stigler and Becker on investing in human capital; Becker and critics on addiction); empirical studies of time preference (Offer and Bowden).

Happiness vs. acquisitiveness: empirical studies on work vs. leisure time and its use (Becker, Linder, Schorr); empirical studies on happiness and incomes (Layard); boredom (Scitovsky).

Bringing consumer considerations into production decisions: fashion (case studies of Swatch; Benetton); challenges to record companies through new technology; living with uncertainty (re-shaping the movie industry after the era of the integrated studios (De Vany).

This list is suggestive; we are flexible on both range and specific content. Given the spring 20006 theme and the possibility of having students from different backgrounds, we will be sensitive to exploring cultural differences in relation to the overall focus of the course.