Behavioral Economics
- Credits: 6
- Ending: Examination
- Range: 2P + 2C
- Semester: winter
- Year: 1
- Faculty of Economics and Finance
Teachers
Included in study programs
Teaching results
Knowledge:
The course will provide students with an overview of the principles and methods used in behavioral economics. Behavioral economics explains the biases in individuals' behavior and their divergence from the rationality assumed by standard microeconomic theory. The course examines the effects of these behavioral deviations on individuals themselves, on firms as well as in the public policy setting. It also provides an overview of how principles of behavioral economics can be used to solve economic problems in both macro- as well as micro setting.
Competencies and skills:
After having completed the course, students will be able to identify and evaluate systematic variations in behavior of individuals and use the behavioral approach to explain these variations, to compare neoclassical and behavioral approaches and evaluate the differences between them in different areas of economic analysis.
Students will also be able to propose alternative solutions to reduce deviations of individuals from rationality in selected areas of macro policy and assess the possibilities for using the behavioral approach at the micro level.
The course also develops students' soft skills (i.e. presentation, argumentation, teamwork skills).
Indicative content
1. Behavioral economics and its development,
2. Methodology of behavioral economics,
3. Prospect theory and decision-making under uncertainty,
4. Preferences (social and time preferences),
5. Heuristics and behavioral biases,
6. Behavioral nudges,
7. Behavioral approaches to happiness,
8. Relevance of behavioral economics for public economics,
9. Relevance of behavioral economics for industrial economics,
10. Relevance of behavioral economics for economics of health and social security,
11. Relevance of behavioral economics for development economics,
12. Relevance of behavioral economics for finance,
13. Experience with behavioral interventions in the implementation of public policies as a way to increase their effectiveness.
The topics of seminars are related to the topics of lectures.
Support literature
Literature:
1. Dhami, S. (2017) The Foundations of Behavioral Economic Analysis, Oxford University Press, 2017, ISBN-10 : 0198715536, ISBN-13 : 978-0198715535
2. Thaler, R. Neočekávané chování, Praha, Argo, 2017 (alebo anglický originál Misbehaving)
Suggested readings:
1. Wilkinson, N., Klaes, M. (2012) An Introduction to Behavioral Economics, Palgrave Macmillan.
2. Kahneman and Tversky (1979) Prospect Theory: An Analysis of Decision Under Risk, Econometrica, 47(2): 263– 291.
3. List (2003) Does Market Experience Eliminate Market Anomalies?, Quarterly Journal of Economics, 118(1): 41–71.
4. DellaVigna, List, Malmendier. (2012) Testing for Altruism and Social Pressure in Charitable Giving”. Quarterly Journal of Economics, 127(1): 1–56
5. Tversky, A. and Kahneman, D. (1974) Judgment Under Uncertainty: Heuristics and Biases, Science, 185(4): 1124– 1131.
6. Matthew Rabin, Joel L. Schrag (1999) First Impressions Matter: A Model of Confirmatory Bias, The Quarterly Journal of Economics, 114(1), 37–82.
7. Loewenstein, G, O’Donoghue, T, and M Rabin (2003) Projection Bias in Predicting Future Utility, Quarterly Journal of Economics 118(4), 1209-1248.
8. Kahneman and Krueger (2006) Developments in the Measurement of Subjective WellBeing, Journal of Economic Perspectives, 20(1): 3–24.
9. Akerlof, G., Shiller, R. (2009) Animal Spirits, Princeton University Press.
Requirements to complete the course
Final written exam
20 % essay, team-work
20 % preliminary assessment (written work, individual assignments)
60 % final exam
Date of approval: 13.02.2023
Date of the latest change: 08.04.2021