Decision Making, Behavioral Economics Approach 2400-M2EDM
1. Introduction. History and evolution of behavioral economics (2 hours).
2. Decision Making. Psychological and social factors affecting economic behavior. Cognitive abilities and cognitive effort. Intuition and reasoning (2 hours)
3.Attitudes; functions of attitudes, the relation between attitudes, utility and preferences. (2 hours).
5. Heuristic-driven bias – examples. Intertemporal choice (2 hours)
6. Behavioral Macroeconomics (2 hours)
7. 8. Decision making under risk - Prospect Theory (4 hours).
9. Behavioral Finance - application of Prospect Theory to explain financial decisions - the difficulties in realizing losses, hedonic framing. "Get eventis" problem (2 hours).
10. Mental accounting, endowment effect (2 hours)
11. Subjective measures of risk (2 hours).
12.Emotion, affect - for example anger, influencing decisions, compulsive buying.
13. Fairness and Social Preferences. Policy implications (2hours).
14. Nudge theory – examples, applications.
15. Conclusion (2 hours)
Type of course
Course coordinators
Learning outcomes
I assume that participants will acquire wider and deeper knowledge of complex factors affecting economic decision making. The understanding of social, biological and emotional factors affecting human reasoning may be useful not only in their research but in practice as well.
S_W01,S_W02,S_W03,S_W04,S_W05,S_U01,S_U01, S_U03,S_U04, S_U05, S_U06,S_U07,S_K01,S_K02,S_K03
Assessment criteria
The assessment will be made on the basis of attendance and activity -To receive a course credit, a participant should be present at most of the meetings. Active part in the discussion on basic readings is required to get credit . A Participant should write 3 short home-works. Writing an essay based on additional readings is required to receive higher grade (A or B). This essay should be presented in class. The presenter should be prepared to show the most interesting problems to initiate discussion. Students, who are interested in Economic Behavior are suggested to prepare joint research paper on attitudes and values affecting economic decisions and present this paper at The Students Research Conference.
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: