Antoine Bommier: Catalogue data in Spring Semester 2023 
Name  Prof. Dr. Antoine Bommier 
Field  Integrative Risk Management and Economics 
Address  Integratives Risikomanag. und Ök. ETH Zürich, SEC E 7 Scheuchzerstrasse 7 8092 Zürich SWITZERLAND 
Telephone  +41 44 632 38 10 
abommier@ethz.ch  
Department  Management, Technology, and Economics 
Relationship  Full Professor 
Number  Title  ECTS  Hours  Lecturers  

363051500L  Decisions and Markets  3 credits  2V  A. Bommier  
Abstract  This course provides an introduction to microeconomics. The course emphasizes the conceptual foundations of microeconomics and contains concrete examples of their application.  
Objective  The purpose of this course is to provide master students with an introduction to graduatelevel microeconomics, particularly for students considering further graduate work in economics, business administration or management science. The course provides the fundamental concepts and tools for graduate courses in economics offered at ETH and UZH. After completing this course:  Students will be able to understand and use existing models to make predictions of consumer and firm behavior.  Students understand the fundamental welfare theorems and will be able to analyze equilibria of markets with perfect and imperfect competition.  Students will be able to analyze under which conditions market allocations are not efficient (market failure).  
Content  Microeconomics is the branch of economics which studies the decisionmaking by an individual, household, firm, industry or level of government. The economic equilibrium is the result of agents' interactions. Microeconomics is an element of nearly every subfield in economic analysis today. This course introduces the fundamental frameworks which form the basis of many economic models. Theory of the consumer:  Consumer preferences and utility  Budget sets and optimal choice  Demand functions  Labor supply and intertemporal choice  Welfare economics Theory of the producer:  Technological constraints and the production function  Cost minimization  Profit maximization Market structure:  Perfectly competitive markets  Monopoly behavior  Duopoly behavior General equilibrium analysis:  Market equilibrium in an exchange economy  
Lecture notes  The lecture will be based on lecture slides, which will be made available on Moodle.  
Literature  The course is mostly based on the textbook by R. Serrano and A. Feldman: "A Short Course in Intermediate Microeconomics with Calculus" (Cambridge University Press, 2013). Another textbook of interest is "Intermediate Microeconomics: A Modern Approach" by H. Varian (Norton, 2014). Exercises are available in the textbook by R. Serrano and A. Feldman ("A Short Course in Intermediate Microeconomics with Calculus", Cambridge University Press, 2013). More exercises can be found in the book "Workouts in Intermediate Microeconomics" by T. Bergstrom and H. Varian (Norton, 2010).  
Prerequisites / Notice  The course is open to students who have completed an undergraduate course in economics principles and an undergraduate course in multivariate calculus.  
363100000L  Financial Economics  3 credits  2V  A. Bommier, P. Colo  
Abstract  This is a theoretical course on the economics of financial decision making, at the crossroads between Microeconomics and Finance. It discusses portfolio choice theory, risk sharing, market equilibrium and asset pricing.  
Objective  The objective is to make students familiar with the economics of financial decision making and develop their intuition regarding the determination of asset prices, the notions of optimal risk sharing. However this is not a practical formation for traders. Moreover, the lecture doesn't cover topics such as market irrationality or systemic risk. After completing this course: 1. Students will be familiar with the economics of financial decision making and develop their intuition regarding the determination of asset prices; 2. Students will understand the intuition of market equilibrium. They will be able to solve the market equilibrium in a simple model and derive the prices of assets. 3. Students will be familiar with the representation of attitudes towards risk. They will be able to explain how risk, wealth and agents’ preferences affect the demand for assets. 4. Students will understand the notion of risk diversification. 5. Students will understand the notion of optimal risk sharing.  
Content  The following topics will be discussed: 1. Introduction to financial assets: The first lecture provides an overview of most common financial assets. We will also discuss the formation of asset prices and the role of markets in the valuation of these assets. 2. Option valuation: this lecture focuses on options, which are a certain type of financial asset. You will learn about arbitrage, which is a key notion to understand the valuation of options. This lecture will give you the intuition of the mechanisms underlying the pricing of assets in more general settings. 3. Introduction to the economic analysis of asset markets: this chapter will familiarize you with the notion of market equilibrium and the role it plays concerning asset pricing. Relying on economic theory, we will consider the properties of the market equilibrium: In which cases does the equilibrium exist? Is it optimal? How does it depend on individual’s wealth and preferences? The concepts defined in this chapter are essential to understand the following parts of the course. 4. A simplified approach to asset markets: based on the notions introduced in the previous lectures, you will learn about the key concepts necessary to understand financial markets, such as market completeness and the noarbitrage theorem. 5. Choice under uncertainty: this class covers fundamental concepts concerning agents’ decisions when facing risk. These models are crucial to understand how the demand for financial assets originates. 6. Demand for risk: Building up on the previous chapters, we will study portfolio choice in a simplified setting. We will discuss how asset demand varies with risk, agent’s preferences and wealth. 7. Asset prices in a simplified context: We will focus on the portfolio choices of an investor, in a particular setting called meanvariance analysis. The meanvariance analysis will be a first step to introduce the notion of risk diversification, which is essential in finance. 8. Risk sharing and insurance: in this lecture, you will understand that risk can be shared among different agents and how, under certain conditions, this sharing can be optimal. You will learn about the distinction between individual idiosyncratic risk and macroeconomic risk. 9. Risk sharing and asset prices in a market equilibrium: this course builds up on previous lessons and presents the consumptionbased Capital Asset Pricing Model (CAPM). The focus will be on how consumption, assets and prices are determined in equilibrium.  
Literature  Main reading material:  "Investments", by Z. Bodie, A. Kane and A. Marcus, for the introductory part of the course (see chapters 20 and 21 in particular).  "Finance and the Economics of Uncertainty" by G. Demange and G. Laroque, Blackwell, 2006.  "The Economics of Risk and Time", by C. Gollier, MIT Press, 2001. Other readings:  "Intermediate Financial Theory" by J.P. Danthine and J.B. Donaldson.  Ingersoll, J., E., Theory of Financial Decision Making, Rowman and Littlefield Publishers.  Leroy S and J. Werner, Principles of Financial Economics, Cambridge University Press, 2001  
Prerequisites / Notice  Basic mathematical skills needed (calculus, linear algebra, convex analysis). Students must be able to solve simple optimization problems (e.g. Lagrangian methods). Some knowledge in microeconomics would help but is not compulsory. The bases will be covered in class.  
364053100L  CERETH Research Seminar  0 credits  2S  H. Gersbach, A. Bommier, L. Bretschger  
Abstract  Research Seminar of Center of Economic Research CERETH  
Objective  Survey of the currently leading research in economics, especially in the CERETH research fields.  
Content  Presentations of current and recent research results in the CERETH research fields, usually by international guest speakers.  
Prerequisites / Notice  Please note the special announcements.  
364105800L  Risk Center Seminar Series  0 credits  2S  H. Schernberg, D. Basin, A. Bommier, D. N. Bresch, S. Brusoni, L.‑E. Cederman, P. Cheridito, F. Corman, H. Gersbach, C. Hölscher, K. Paterson, G. Sansavini, B. Stojadinovic, B. Sudret, J. Teichmann, R. Wattenhofer, U. A. Weidmann, S. Wiemer, R. Zenklusen  
Abstract  In this series of seminars, invited speakers discuss various topics in the area of risk modelling, governance of complex socioeconomic systems, managing risks and crises, and building resilience. Students, PhD students, postdocs, faculty and individuals outside ETH are welcome.  
Objective  Participants gain insights in a broad range of risk and resiliencerelated topics. They expand their knowledge of the field and deepen their understanding of the complexity of our social, economic and engineered systems. For young researchers in particular, the seminars offer an opportunity to learn academic presentation skills and to network with an interdisciplinary scientific audience.  
Content  Academic presentations from ETH faculty as well as external researchers. Each seminar is followed by a Q&A session and (when permitted) a networking Apéro.  
Lecture notes  The sessions are recorded whenever possible and posted on the ETH Risk Center webpage. If available, presentation slides are shared as well.  
Literature  Each speaker will provide a literature review.  
Prerequisites / Notice  In most cases, a quantitative background is required. Depending on the topic, fieldspecific knowledge may be required.  
Competencies 
