Behavioral Economics

  • Credits: 4
  • Ending: Examination
  • Range: 2P + 2C
  • Semester: winter
  • Year: 2
  • Faculty of Business Economics with seat in Košice

Teachers

Included in study programs

Corporate Financial Management

Teaching results

The aim of the course is to acquire knowledge of deviations from rational expectations in the understanding of behavioral economics, based on knowledge of decision theories, by integrating knowledge from economics and psychology, as well as the application of principles of behavioral economics in solving decision problems in business practice.
Knowledge:
- knowledge of different decision making theories and basic models,
- understanding the principles and key theories of behavioral economics,
- identification of psychological pitfalls in decision making.
Competences:
- professional competences developed by the ability to identify decision making problems and
propose appropriate procedures for their solution,
- personal competencies deepened by knowledge of psychological aspects of decision making,
- social competences developed through knowledge of irrationalities in human behavior, social
interactions and role-playing.
Skills:
- the ability to distinguish among different types of decision making situations and to design the
process of their solution,
- ability to apply the principles of behavioral economics in selected economic disciplines,
- development of variant thinking in the creation of variants of solving a decision making situation.

Indicative content

Lectures:
1. Introduction to behavioral economics and its development.
2. Theories of decision making and types of decision making processes.
3. Structure of decision making process, identification of decision making problems.
4. Selection of decision criteria.
5. Creation of solutions of variants and determining their consequences.
6. Multicriteria evaluation of variants.
7. Rational choice versus the concept of bounded rationality.
8. Heuristics and biases.
9. Prospect theory.
10. Group decision making, conflicts and negotiations.
11. Principles of behavioral economics in business and marketing.
12. Behavioral finance.
13. Other application areas of behavioral economics.
Seminars:
1. Introduction to the study, test of cognitive thinking.
2. Ordinary versus managerial decision making and the place of behavioral economics in this
context.
3. Identification of types of decision making processes.
4. Analysis of decision problems.
5. Selection of decision criteria and measurement of qualitative criteria.
6. Creation and evaluation of decision variants.
7. Semester test.
8. The problem of bounded rationality and irrationality in decision making.
9. Heuristics in practice.
10. Application of prospect theory on specific examples.
11. Simulation of negotiation.
12. Application of behavioral economics in business and marketing.
13. Application of behavioral economics in investing.

Support literature

Elementary literature:
1. KAHNEMAN, D. 2019. Myslenie, rýchle a pomalé. Bratislava : Aktuell, 2019. ISBN
978-80-8172-056-7.
2. THALER, R. H. 2017. Neočekávané chování: Příběh behaviorální ekonomie. Praha: Argo,
Dokořán, 2017. ISBN 978-80-7363-838-2.
3. FOTR, J. a kol. 2016. Manažerské rozhodování. Postupy, metody a nástroje. Praha : Ekopress,
2016. ISBN 978-80-878-6533-0.
Supplementary literature:
4. BADDELEY, M. 2017. Behavioural Economics. Oxford: Oxford University Press, 2017. ISBN
978-0-19-875499-2.
5. SIBONY, O. 2020. Chystáte se udělat strašnou chybu! Jak kognitivní skreslení kazí váš byznys
a jak to můžete změnit. Brno: Jan Melvil Publishing, 2020. ISBN 978-80-7555-115-3.
6. BRIDGE, J., DODDS, J. C. 2018. Managerial Decision Making. Routledge, 2018. ISBN
978-13-512-0045-5.
7. DOBELLI, R. 2012. Die Kunst des klugen Handelns. Mníchov : Carl Hanser, 2012. ISBN
978-80-7429-356-6.

Syllabus

Lectures: 1. Introduction to behavioral economics and its development. 2. Theories of decision making and types of decision making processes. 3. Structure of decision making process, identification of decision making problems. 4. Selection of decision criteria. 5. Creation of solutions of variants and determining their consequences. 6. Multicriteria evaluation of variants. 7. Rational choice versus the concept of bounded rationality. 8. Heuristics and biases. 9. Prospect theory. 10. Group decision making, conflicts and negotiations. 11. Principles of behavioral economics in business and marketing. 12. Behavioral finance. 13. Other application areas of behavioral economics. Seminars: 1. Introduction to the study, test of cognitive thinking. 2. Ordinary versus managerial decision making and the place of behavioral economics in this context. 3. Identification of types of decision making processes. 4. Analysis of decision problems. 5. Selection of decision criteria and measurement of qualitative criteria. 6. Creation and evaluation of decision variants. 7. Semester test. 8. The problem of bounded rationality and irrationality in decision making. 9. Heuristics in practice. 10. Application of prospect theory on specific examples. 11. Simulation of negotiation. 12. Application of behavioral economics in business and marketing. 13. Application of behavioral economics in investing.

Requirements to complete the course

- elaboration of a semester assignment – 20%
- results of semester test – 20%
- results of final written exam – 60%

Student workload

participation in lectures – 26 h
- participation in seminars – 26 h
- preparation for seminars – 13 h
- elaboration of a semester assignment – 13 h
- preparation for semester test – 13 h
- preparation for exam – 13 h

Language whose command is required to complete the course

Slovak

Date of approval: 15.02.2023

Date of the latest change: 12.07.2022