Applied Behavioral Economics

Aim

After completing of the course, the students should be able to:

• account for problems associated with standard economic theory
• identify, explain, and analyse how psychological factors influence decision makers
• identify, describe, and use research methods used in behavioural economics
• apply empirical and theoretical studies within behavioural economics to draw conclusions on decisions of various economics agents
• design well-conceived experiments and surveys to answer relevant research questions
• critically evaluate existing policies aimed at improving decisions and suggest constructive ways of helping individuals make better decisions

Content

This course focuses on the use of laboratory and field experiments as a tool to gain knowledge about the behaviour of economics agents. It surveys research which incorporates psychological evidence into economics. We will analyse how predictions of economic behaviour differ when some simplifying assumptions in classical economic models are replaced with psychologically realistic assumptions based on empirical observations from the lab and from the field. We will pay special attention how these assumtions affect individual decisions, management, and public policy, as well as how behavioural economic research can be applied in various areas of decision making (e.g., finance). The course will cover four general topics:

• Tools for behavioural research
• Preferences and emotions in decision making
• Applications of behavioural economics
• Behavioral interventions