
- UCAS course code
- NR17
- UCAS institution code
- M20
Course unit details:
Behavioural Economics
Unit code | ECON32152 |
---|---|
Credit rating | 20 |
Unit level | Level 3 |
Teaching period(s) | Semester 2 |
Offered by | School of Social Sciences |
Available as a free choice unit? | No |
Overview
Expose students to the main topics in behavioural economics and advance their understanding of neoclassical microeconomics when combined with empirically and experimentally motivated assumptions, mostly based on psychological realism, while having the ultimate goal to provide a better understanding of economic behaviour and welfare implications. The main topics in Behavioural Economics are decision theory under conditions of risk and uncertainty; reference-dependent preferences and loss aversion; time-preferences; social preferences, and their applications to economics.
Pre/co-requisites
Unit title | Unit code | Requirement type | Description |
---|---|---|---|
Microeconomic Analysis 4 | ECON20512 | Pre-Requisite | Compulsory |
Microeconomics 4 | ECON20022 | Pre-Requisite | Compulsory |
Aims
Expose students to the main topics in behavioural economics and advance their understanding of neoclassical microeconomics when combined with empirically and experimentally motivated assumptions, mostly based on psychological realism, while having the ultimate goal to provide a better understanding of economic behaviour and welfare implications. The main topics in Behavioural Economics are decision theory under conditions of risk and uncertainty; reference-dependent preferences and loss aversion; time-preferences; social preferences, and their applications to economics.
Learning outcomes
At the end of this course unit, it is expected that you will be able to:
- Show a clear understanding of the preference conditions underlying expected and non-expected utility theories and be able to apply the theories to solve economic problems at the appropriate level.
- Demonstrate a profound understanding of elicitation methods based on these theories.
- Give a clear overview of experimental tests for these preference conditions.
- To develop a framework to test particular preference conditions or theories.
- Apply these new models to a variety of economic problems and derive original results.
Syllabus
- Decision theory under conditions of risk and uncertainty.
- Experimental Evidence.
- Prospect Theory.
- Experiments.
- Foundations.
- Applications.
- Time-preferences.
- Classical and Modern Models and Applications.
- Social Preferences.
- Other-regarding preferences.
- Fairness/Reciprocity.
- Experimental Evidence.
Teaching and learning methods
Lectures and tutorial classes.
Employability skills
- Analytical skills
- Critical reflection and evaluation.
- Problem solving
- Research
- Planning independent research using library, electronic and online resources. Using reporting skills.
- Other
- Information retrieval. Time management. Applying subject knowledge. Improving own learning.
Assessment methods
- Assignments (10%).
-
Final Exam - both problem solving and short essay (90%).
Feedback methods
- Receive feedback during exercise classes where active problem solving will be implemented.
- Experiments run in class and in-class discussions of experimental results.
- Office hours.
Recommended reading
- Kahneman, Knetsch, Thaler (1991) “Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias", Journal of Economic Perspectives, 5(1): 193-206.
- Kahneman, D., and Tversky, A. (1979), “Prospect Theory: An Analysis of Decision Under Risk”, Econometrica 47, 263-291.
- Charness and Rabin (2002) “Understanding Social Preferences with Simple Tests" Quarterly Journal of Economics, 117(3): 817-869.
- Johannes Abeler, Armin Falk, Lorenz Goette and David Huffman, 2011. “Reference Points and Effort Provision”, American Economic Review, Vol. 101(2): 470-492.
- Rabin (2000), “Risk Aversion and Expected-Utility Theory: A Calibration Theorem”, Econometrica, 68(5): 1281-1292.
-
Thaler (1981), “Some Empirical Evidence on Dynamic Inconsistancy”, Economics Letters 8:201-207.
Study hours
Independent study hours | |
---|---|
Independent study | 0 |
Teaching staff
Staff member | Role |
---|---|
Agnes Kovacs | Unit coordinator |