APSK05120U Elective course - The Psychology of Choice - Experimental Theory and Methods

The Psychology of Choice - Experimental Theory and Methods v/ Carsten S. Nielsen and Alexander Sebald

Description and content: All through our life, we have to make decisions. Whether it is attending to the signal at a crossing, finding a spouse, or investing hard earned money, the common denominator is the choice between options of different values.  How we perceive the value of an option depends on how the option is processed by our cognitive system. To understand human decision-making it is therefore crucial to understand human cognition. 

Explanations and predictions of people’s choices, in everyday life as well as in the social sciences, are often founded on the assumption that humans are rational. The definition of rationality has been much debated, but there is general consensus that rational choices should satisfy some elementary requirements of consistency and coherence in the assessment of values. In this course we will study decision problems in which people systematically violate these requirements of consistency and coherency, and we trace the violations to the psychological principles that govern the perception of decision problems and the evaluation of options.

The course will provide an overview of the field by focusing on the most central topics and experiments. Some of the topics we will focus on during the course are attention limitations, anchoring, loss aversion, the importance of context and reference points, and mutual mental states. The impact and relevance of seminal research in each of these topics will be made clear through hands-on experimental experience.

Methodological level: Students should learn to critically assess and relate the diverse ideas, concepts and theories developed in psychology and economics to explain humans’ choice behavior. Furthermore, they should learn (i) how experiments are used in social sciences to investigate human choices and (ii) how to analyze and present their results in a simple / clear, but not superficial way. 

Teaching: The course has three elements. (i) Demonstration experiments: Students participate in demonstration experiments based on the above-mentioned topics. (ii) One assignment: During the course each student has to analyze with a small group of other students the data from one demonstration experiment, reflect on possible explanations for the observed behavior and present the results to the rest of the class. (iii) Lectures: We discuss seminal research, and explain the relevance of the demonstration experiments and how the data compares to findings in the literature.