AØKK08334U Foundations of Behavioural Economics

Volume 2015/2016
Education

Elective at MSc in Economics
 

 

Content

Why do people volunteer and donate to charitable causes? Why do they engage in costly punishment of unfair and anti-social behavior? Why do we often eat unhealthy food, exercise too little, and struggle with completing important tasks in a timely manner? Why do most people think that they are better-than-average drivers, entrepreneurs, lovers, ... ?  From the perspective of conventional economic theory, these questions are difficult to explain. Behavioral Economics is an attempt to shed light on these and other puzzling phenomena. By enriching the traditional economic model with an empirically more accurate foundation of human behavior, Behavioral Economics aims at improving the predictive power of economic models and the resulting policy recommendations.

In this course, we will discuss the psychological foundations of human behavior and their economic implications. We will present the empirical regularities that have inspired the development of Behavioral Economics, analyze the key theoretical models that have been brought forward, and discuss a number of applications where insights from Behavioral Economics have contributed to a better understanding of individual behavior and market outcomes.

The course will focus on the following topics:

  • Reference-Dependent Preferences and Loss Aversion

  • Present-Biased Preferences and Limited Self Control

  • Limited Cognitive Resources and Attention

  • Fairness and Social Preferences

  • Behavioral Economics, Market Interactions, and Economic Policy

Learning Outcome

The primary aim of the course is to introduce students to central theoretical insights and empirical research results in behavioral economics. A broader aim of the course is that students understand how economic theory, lab and field experiments,  and other complementary empirical methods can be used to address questions at the intersection of economics and psychology.

After having successfully completed the course, students will be able to understand state-of-the-art research in Behavioral Economics. They will also acquire the necessary knowledge and skills to apply behavioral economic insights to theoretical problems and empirical questions. The course builds on the introductory course “Psychology of Choice” and lays the foundations for subsequent courses in which insights from behavioral economics are applied to different areas of economic research (e.g., Behavioral Finance, Science of Behavior Change, or Behavioral Public Economics). The course also equips the students with the necessary tools and skills to continue working on behavioral economic topics in seminars or Master’s theses.

The course will be based on lecture notes and research papers, as well as selected handbook chapters and survey articles. A detailed syllabus with required readings will be provided in the beginning of the course.

The following two survey articles provide an excellent introduction to the literature.

  • Rabin, M. (1999). Psychology and Economics. Journal of Economic Literature, 36: 11-46.

  • DellaVigna, S. (2009). Psychology and Economics: Evidence from the Field. Journal of Economic Literature, 47: 315-372.

A thorough knowledge of microeconomic theory and econometric techniques are required. In particular, it is required that students have successfully completed the courses in Microeconomics I - III and Econometrics I - III. Ideally, students should also have attended the interdisciplinary course on “The Psychology of Choice”.
2 hours of lectures per week and 2 hours of exercise classes per second week for 14 weeks.

In the practice sessions problem sets and homework assignments will be discussed. Assignments will consist of theoretical exercises and empirical case studies through which the students can deepen and apply the knowledge acquired in the lecture.
Student participation and an active discussion will be expected and encouraged.

Time and room:
For time and classroom please press the link under "Se skema"(See schedule) at the right side of this page (15E means Autumn 2015, 16F means Spring 2016).

You can find the similar information partly in English at
https:/​/​skema.ku.dk/​ku1516/​uk/​module.htm
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F16;Foundations in Behavioural Economics”
-Select Period: “Forår/Spring – Weeks 4-29”
-Press: “ View Timetable”
  • Category
  • Hours
  • Exam
  • 3
  • Lectures
  • 42
  • Preparation
  • 161
  • Total
  • 206
Credit
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
A 3 hours written assignment without aids.
Aid
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100 % censorship
Exam period

The written exam takes place June 3, 2016 at Peter Bangsvej 36, 2000 Frederiksberg http://pc-eksamen.ku.dk/pc_exam

The exact time of the exam will be informed in the Self-Service at KUnet mid-April.

For enrolled students more information about examination, exam/re-sit, rules etc. is available at the student intranet for Examination (English) and student intranet for Examination (KA-Danish).

 

Re-exam

The written re-exam takes place August 22, 2016 at Peter Bangsvej 36, 2000 Frederiksberg http://pc-eksamen.ku.dk/pc_exam

The exact time of the exam will be informed in the Self-Service at KUnet mid-July/early-August.

If only a few students have registered for the re-exam, the exam might change to an oral exam including the date for the exam, which will be informed  by the Examination Office.

Criteria for exam assesment

The student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.