Behavioral Economics (GRAE031)

In this course we examine the role of rationality in economic theory and practice. We will study what rationality means in various areas of economics, how realistic the assumption of rationality is, how deviations from the assumed standards of rationality impact economic policy and financial behavior. Using textbook readings, journal articles, classroom experiments, and exercises we will review some important results of behavioral economics and discuss the implications of these results for economic theory and public policy. The course will also introduce some influential critiques, challenges, and recent debates in the field of behavioral economics.

• Understand and apply the main concepts, research tools and methodologies of behavioral economics that help to reveal biases, heuristics, etc. in the decision making process on individual, corporate, policy, and financial market level.
• Present the main results in the field of behavioral economics focusing on financial market processes including market anomalies.
• Explore behavioral economics considering financial, investment and dividend policy decisions and contrasting traditional and behavioral approaches.
• Research, prepare and present behavioral economics problems.