Behavioral Economics (ECO134)

This course delves into the interdisciplinary field of behavioral economics, exploring the psychological factors that influence economic decision-making. Students will examine how individuals deviate from traditional economic models and explore various behavioral phenomena, decision-making biases, and their implications for economic outcomes. Also, students will acquire a combination of theoretical knowledge (i.e. foundational principles in economics and psychology, decision-making models) and practical skills (i.e. experimental methods, empirical applications, policy implications and ethical considerations) related to understanding and analyzing economic behavior in real-world settings. The general framework is based on the three fundamental trade-offs humans face (in economics): Risk vs. return, today vs. tomorrow, self vs. others. A special emphasis is put on explicitly identifying the underlying assumptions behind commonly used concepts. Interactive components will help students identify ways in which they violate basic assumptions and explore reasons for doing so, as well as ways to overcome easily exploitable choice biases. Topics covered include heuristics and biases, prospect theory, intertemporal choice, social preferences, and the implications of behavioral economics for public policy.

• Define and explain the core principles and concepts of behavioral economics.
• Understand experimental methodologies used in behavioral economics research.
• Apply behavioral economics principles to analyze and interpret real-world economic phenomena.
• Critically evaluate economic models and theories from a behavioral perspective.
• Analyze how individuals make economic decisions, incorporating insights from psychology and behavioral economics.
• Understand heuristics, biases, and other psychological factors influencing decision-making.
• Apply behavioral insights to propose innovative solutions to economic challenges.