AØKA08107U  Summerschool 2018: Behavioral and Experimental Economics

Volume 2017/2018
Education

MSc programme in Economics – elective course

Bacheloruddannelsen i økonomi – valgfag efter 2. år

The Danish BSc programme in Economics - elective course after the 2.year

 

The PhD Programme in Economics at the Department of Economics - elective course with resarch module (PhD students must contact the study administration and the lecturer in order to write the research assignment)

 

Content

Behavioral economics attempts to make economics a more relevant and powerful science of human behavior by integrating insights from psychology and the social sciences into economics. Experimental economics adapts methods developed in the natural sciences to study economic behavior. Experiments are valuable in testing to what extent the integration of insights from other disciplines into economics is necessary and fruitful. Behavioral and Experimental Economics is a vibrant field of research in economics and sheds new light on many old and important issues in economics. The field has received wide recognition in recent years, for example by the award of the Nobel Prize in Economics 2002 to Daniel Kahneman and Vernon Smith. The field is rapidly growing. This course can therefore not provide a comprehensive overview but concentrates on selected topics instead.

The course addresses the following questions: What are the advantages and limitations of experimental economics? How important are deviations from the assumptions of full rationality and strict self-interest in determining outcomes of economic interaction? It is argued that identifying individual-level “anomalies” is not sufficient to demonstrate their economic and social importance. Instead, it must be analyzed how institutions mitigate and multiply these anomalies. A broad range of institutions, including markets, bargaining and voting is discussed.

Learning Outcome

After completing the course, the student should be able to:

Knowledge:

  • Know how the toolbox of experimental economics can be used in research. They know how economic theory can be confronted with experimental data.

  • Participate in a series of demonstration experiments and therefore learn how experiments work in practice from the participants’ perspective.

  • Learn in what ways people systematically deviate from rational and self-interested behavior in individual decision making.

  • Learn in what ways markets and other forms of economic interaction can multiply or mitigate these biases. This knowledge is most relevant in the context of institutional choice or design (e.g. from an economic policy perspective).

  • Participate in a series of demonstration experiments and therefore learn how experiments work in practice from the participants’ perspective.

Skills:

  • Become critical consumers of the rapidly growing behavioral and experimental economics literature.

  • Recognize and avoide pitfalls in decision-making.

  • Write short papers to analyze experimental data and to reflect on the data and the experimental design. Students therefore improve their writing and reasoning skills.

Competencies:

  • Gain a deeper understanding of the basic principles of rationality and self-interest in economics. Students are therefore able to critically reflect the conventional wisdom in economics.

 

A sound knowledge of microeconomics and game theory at an intermediate level is required (e.g. Varian: Intermediate Microeconomics, Gibbons: A Primer in Game Theory).
The course has three elements:
- Demonstration experiments. Students participate in demonstration experiments in our experimental laboratory.
- Assignments: Students analyze the data from the demonstration experiment (i.e. their own behavior) and reflect on possible explanations for observed behavior. Detailed knowledge of the literature is not required at this stage. Assignments are group work (groups of 2 or 3). Assignments are graded as “pass” or “fail”. A student needs to earn 1 “pass” on assignments and is free to choose among the assignments. Deadlines are strict (see handout).
- Lectures: Discussion of selected examples of research in behavioral and experimental economics. Explaining the relevance of demonstration experiments and how the data compares to findings in the literature.
Schedule:
Week 1
August 6 Introduction
August 7 Experiments I
Hand in assignment 1 by August 10, 10h
August 8 Introduction
August 9 Markets
August 10 Experiments II
Hand in assignment 2 by August 14, 10h

Week 2
August 13 Loss aversion
August 14 Biases in probability judgments
August 15 Strategic complementarity and coordination
August 16 Money illusion
August 17 Experiments III
Hand in assignment 3 by August 21, 10h

Week 3
August 20 Fairness
August 21 Fairness / Voting
August 22 Voting
August 23 Public Goods
August 24 Public Goods / Q&A time


Timetable and venue:
To see the time and location of classroom please press the link under "Se skema" (See schedule) at the right side of this page.

You can find the similar information partly in English at
https:/​/​skema.ku.dk/​ku1718/​uk/​module.htm
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-B5-5F18; [Name of course]””
-Select Report Type: List
-Select Period: “Forår/Spring – Week 5-30”
Press: “ View Timetable”

Venue will be available from April 2018.
Credit
7,5 ECTS
Type of assessment
Written examination, 2 hours under invigilation
at the computers of the University.
The exam assignment is given in English and must be answered in English.
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Exam registration requirements

Full participation at the summerschool is mandatory and the student must actively participate in all activities.

Participation in experiments and analysis of experimental data is required for admission to final exam.

Note:

a) Participating in all demonstration experiments is an essential element of this course. However, students are not expected to prepare these experiments. Students earn a “pass” if they are present (see schedule), are attentive and make “reasonable” choices during the experiment.

b) Students provide a rough analysis after each experimental session and answer specific questions concerning the experiment in a paper (“assignment”). Knowledge of the literature is not expected at this stage (we will talk about the experiments in the lecture). Maximum length of a paper: 4 pages text (not counting graphs, tables, see separate guidelines for more details). Students work in groups 2 or 3.

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Aid
Without aids
Marking scale
7-point grading scale
Censorship form
No external censorship
The course can be selected for external assessment.
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Exam period

The exam takes place August 27 2018

 

For enrolled students more information about examination, rules, exam schedule etc. is available at the intranet for master students (UK) , master students (DK) and bachelor students (DK).

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Re-exam

The reexam takes place in the period December 2018 - January 2019.

The exact day and time of the exam will be informed at  Summer schools and in the Self-Service at KUnet during Autumn 2018.

If only a few students have registered the reexam it might change to oral including the date, time and place, which will be informed in KUNet or by the Examination Office.

 

More information about reexamination, rules, schedule etc is available at the intranet for master students (UK) , master students (DK) and bachelor students (DK).

Criteria for exam assesment

Students are assessed on the extent to which they master the learning outcome for the course.

To receive the top grade, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.

  • Category
  • Hours
  • Lectures
  • 42
  • Practical exercises
  • 18
  • Preparation
  • 144
  • Exam
  • 2
  • Total
  • 206