ECN421 Behavioral Economics (E)

• Topics

  The objective of the course is to introduce students to the theoretical toolbox, and contemporary empirical research in behavioral economics. This will be done by using the standard economic model of choice as a benchmark and extend it with insights from psychological research. Following this approach will allow us to provide a better understanding of financial decision-making, labor market outcomes, and consumer behavior. We will, for example, use insights from behavioral economics to apply the course content to environmental sustainability, inequality, and public policy design.

  We will cover the workhorse models of behavioral economics. A non-exhaustive list of topics include:

  • Time inconsistent preferences
  • Prospect theory
  • Biased beliefs
  • Social preferences
  • Limited attention
  • Behavioral Approaches to Public Policy

  In addition, we will discuss how one might implement experiments, in laboratories or in the field, as well as observational studies to investigate behavioral questions. During the course we will also reflect on ethical issues that arise in the application of behavioral economics.

  This course is approved as an ERS course (Ethics, Responsibility and Sustainability), and is one of the courses that master's students can choose to fulfill the requirement of one course (7,5 ECTS) in ERS.

• Learning outcome

  Knowledge

  Upon completion of the course, the student can…

  • describe the core theories and models of behavioral economics
  • discuss research in behavioral economics
  • explain how behavioral economics can inform public policy with specific applications to using behavioral economics to further sustainability
  • are aware of different empirical methods that are suitable to test behavioral hypotheses
  • explain how consumers are impacted by behavioral biases and how behavioral economics can be used to motivate consumers to be more sustainable
  • consider the ethical issues that arise from economic interactions with less than fully rational agents and apply normative ethical frameworks to those issues

  Skills

  Upon completion of the course, the student can…

  • analyze human behavior based on the insights of behavioral economics
  • suggest interventions rooted in behavioral economics to address market failures or improve decision-making,
  • suggest interventions that helps each person and our society to be more sustainable
  • evaluate interventions using best practice in behavioral economics
  • assess the ethical implications of firm and government interventions on less than fully rational consumers and discuss these within ethical frameworks

  General competence

  Upon completion of the course, the student can…

  • communicate key insights of behavioral economics to both specialists and non-specialists
  • reflect upon and take ethical aspects into consideration when discussing topics in behavioral economics
  • reflect on how behavioral economics interventions can be used to promote consumer welfare and sustainability, but also the potential for misuse

• Teaching

  The main teaching format is lectures. Seminars, led by teaching assistants, cover problem sets and provide opportunities for questions and discussion.

• Recommended prerequisites

  Introduction to Microeconomics or equivalent

• Compulsory Activity

  None.

• Assessment

  The final grade will be based on an

  1. An oral presentation in groups of 4-5 students (40%)

  2. An individual digital 4-hours school exam (60%).

  The group presentation and the school exam have to be in English.

• Grading Scale

  A-F

• Literature

  - Selected articles in Leganto

  - Wilkinson and Klaes (2017), An Introduction to Behavioral Economics (3rd edition) (optional)

• Permitted Support Material

  Calculator

  One bilingual dictionary (Category I)

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 and Examination support material.