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. These topics will frame our consideration of economic sustainability, specifically in our focus on discrimination and gender equity. We will then discuss the market consequences and, importantly: how public policy may address market failures using insights from behavioral economics. We will focus our applications on environmental sustainability and the role that behavioral economics can play in furthering sustainability efforts.
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 different empirical methods that are commonly used in the study of behavioral economics. Focus will be on the pros and cons of laboratory experiments, field experiments, and observational studies. 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.