EC209-6-SP-CO:
Introduction to Behavioural Economics
2020/21
Economics
Colchester Campus
Spring
Undergraduate: Level 6
Current
Sunday 17 January 2021
Friday 26 March 2021
15
25 August 2020
Requisites for this module
EC111
(none)
(none)
(none)
(none)
BSC C814 Psychology with Economics,
BSC C815 Psychology with Economics (Including Year Abroad),
BSC C816 Psychology with Economics (Including Placement Year),
BA C841 Economics with Psychology,
BA C851 Economics with Psychology (Including Year Abroad),
BA C861 Economics with Psychology (Including Placement Year),
BSC C148 Economics with Psychology,
BSC C149 Economics with Psychology (Including Foundation Year),
BSC C158 Economics with Psychology (Including Year Abroad),
BSC C168 Economics with Psychology (Including Placement Year)
This module introduces students to the field of behavioural economics which combines economic analysis with insights from psychology to understand human behaviour.
This module is offered at level 5 (second year undergraduate) and at level 6 (third year undergraduate). While the content is the same for both levels, the learning outcomes as assessed in the modules are slightly different between the two levels.
The module aims are:
• To provide students with an understanding of human behaviour through the lens of behavioural economics;
• To develop an understanding of when the application of behavioural economic analysis is appropriate;
• To develop an understanding on how behavioural economics can inform economic policies;
• To be able to critically read and assess the academic literature on behavioural economics;
Upon the completion of this module second year undergraduate students should be able to:
1) Have a basic understanding of how behavioural economics can improve our understanding of human behaviour;
2) Apply economic reasoning to derive the main predictions of behavioural economics models and compare them with standard economic models;
3) Be able to interpret empirical evidence on behavioural economics and to understand its relevance to the related economic application;
4) Be able to use behavioural economic principles to analyse economic policies;
Syllabus
Topic 1: Introduction: why do we need behavioural economics?
We discuss how and why behavioural economics emerged and which methods are used.
Topic 2: Heuristics: how do we make decisions?
We discuss how heuristics and biases help make decisions in complex situations.
Topic 3: Risk: how do we make decisions under risk?
We review expected utility and discuss risk aversion.
Topic 4: Prospect Theory: how do we make risky decisions (involving losses)?
We discuss prospect theory and its implications.
Topic 5: Applications of Prospect Theory
We discuss what we can learn from the theory and how we can apply it to various contexts.
Topic 6: Time: how do we make intertemporal decisions?
We discuss discounted utility and self-control issues.
Topic 7: Social preferences: how do we make decisions that also influence others?
We experience and discuss different ways of making decisions that also involve others.
Topic 8: Social preferences: how can we explain them?
We discuss other-regarding preferences with a focus on fairness and reciprocity.
Topic 9: Nudging: how can we influence decision making?
We discuss how nudges can be used to induce behaviour change.
Topic 10: Policy: should we influence decision making?
We discuss ethical considerations of nudges and alternative methods to affect choices
The module will consist of 20 hours lectures over one term (15 credits module) plus 5 (one-hour) classes. The module material can be accessed online in moodle.
- Sunstein, Cass R. (2014) 'Nudging: A Very Short Guide', in Journal of Consumer Policy. vol. 37 (4) , pp.583-588
- Rabin, Matthew; Thaler, Richard H. (2001) 'Anomalies: Risk Aversion', in The Journal of Economic Perspectives. vol. 15 (1) , pp.219-232
- Camerer, Colin; Thaler, Richard H. (1995-05) 'Anomalies: Ultimatums, Dictators and Manners', in Journal of Economic Perspectives. vol. 9 (2) , pp.209-219
- Bhargava, Saurabh; Loewenstein, George. (2015-05) 'Behavioral Economics and Public Policy 102: Beyond Nudging', in American Economic Review. vol. 105 (5) , pp.396-401
- Tversky, Amos; Kahneman, Daniel. (1981) 'The Framing of Decisions and the Psychology of Choice', in Science: New Series. vol. 211 (4481) , pp.453-458
- Barberis, Nicholas C. (2013-02) 'Thirty Years of Prospect Theory in Economics: A Review and Assessment', in Journal of Economic Perspectives. vol. 27 (1) , pp.173-196
- Benartzi, Shlomo; Thaler, Richard H. (2007-07) 'Heuristics and Biases in Retirement Savings Behavior', in Journal of Economic Perspectives. vol. 21 (3) , pp.81-104
- Just, David R. (2014) Introduction to behavioral economics: noneconomic factors that shape economic decisions, Hoboken, NJ: Wiley.
The above list is indicative of the essential reading for the course. The library makes provision for all reading list items, with digital provision where possible, and these resources are shared between students. Further reading can be obtained from this module's reading list.
Assessment items, weightings and deadlines
| Coursework / exam |
Description |
Deadline |
Coursework weighting |
| Coursework |
Assignment |
|
100% |
| Exam |
Main exam: 180 minutes during Summer (Main Period)
|
Exam format definitions
- Remote, open book: Your exam will take place remotely via an online learning platform. You may refer to any physical or electronic materials during the exam.
- In-person, open book: Your exam will take place on campus under invigilation. You may refer to any physical materials such as paper study notes or a textbook during the exam. Electronic devices may not be used in the exam.
- In-person, open book (restricted): The exam will take place on campus under invigilation. You may refer only to specific physical materials such as a named textbook during the exam. Permitted materials will be specified by your department. Electronic devices may not be used in the exam.
- In-person, closed book: The exam will take place on campus under invigilation. You may not refer to any physical materials or electronic devices during the exam. There may be times when a paper dictionary,
for example, may be permitted in an otherwise closed book exam. Any exceptions will be specified by your department.
Your department will provide further guidance before your exams.
Overall assessment
Reassessment
Module supervisor and teaching staff
Yes
Yes
No
Mr Pedro David Matos Serodio
Available via Moodle
Of 336 hours, 0 (0%) hours available to students:
336 hours not recorded due to service coverage or fault;
0 hours not recorded due to opt-out by lecturer(s).
Economics
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