Master
2020/2021
Behavioral Economics
Type:
Elective course (Applied Social Psychology)
Area of studies:
Psychology
Delivered by:
School of Psychology
Where:
Faculty of Social Sciences
When:
2 year, 1, 2 module
Mode of studies:
offline
Instructors:
Alexis V. Belianin
Master’s programme:
Applied Social Psychology
Language:
English
ECTS credits:
4
Contact hours:
48
Course Syllabus
Abstract
The course is about interdisciplinary approach to studies of human behaviour. We cover the main problems and paradigms of contemporary behavioural economics – a relatively new, interdisciplinary area which stems from the basic approach of economic science (rational behaviour), extending it towards a greater descriptive accuracy in the light of the achievements of contemporary psychology. Topics studied within this discipline cover various aspects of individual and interactive decision making in laboratory and real settings, and are closely connected with experimental studies.
Learning Objectives
- The course aims at getting the students familiar with the main approaches and problems of contemporary behavioural economics, its combination of economic theory with experimental tests, and cross-disciplinary cooperation of social sciences.
Expected Learning Outcomes
- knowledge of preference orders and their connection to utilities
- Understanding of the differences between economic and psychological approach to human decisions
- Getting familiar with main heuristics and biases in human decisions, be able to interpret them.
- understanding of the main normative and descriptive approaches to understanding of the principles of decision making under risk.
- Knowledge of applications of behavioural theory to interpretation of real decisions and public policy.
- Knowledge of approaches to human decision in time, and the problems related to inconsistency in intertemporal preferences
- Knowledge of the principles of game theory and ability to interpret incentives of people in interpersonal interactions.
- Knowledge of motives and evidence for social cooperation and problems of coordination of individual decisions
Course Contents
- RationalityPsychology and economics of behaviour. Economic way of thinking. Rational decision making: standard vs behavioural approach. Axioms of rational preferences. Generalized binary (preference) relations. Choice functions, revealed preferences.
- Economic and psychological approaches to human behaviourDifferences between economic and psychological approaches: rationality, behaviour, observational vs. experimental studies. Examples of economic theories and economic experiments. Key contributors in the field.
- Behaviour under risk and uncertaintyDefinitions of risk and uncertainty. History of the concepts. Expected utility theory of von Neumann-Morgenstern and its axioms. Experimental evidence: the Allais paradox. Subjective expected utility. Rank-dependent utilities and Prospect Theory by Kahneman-Tversky. Examples.
- Heuristics and biasesDeviations from normative rationality. Heuristics and biases paradigm by Kahneman and Tversky. Examples of heuristics and their meaning. Classroom experiments.
- Models of individual decision: staticsCharacteristic properties of individual decisions: loss aversion, reference points, status quo, and their implications for human decisions. R.Thaler: mental accounting, nudging and applications to transportation behaviour, saving, honesty, health studies, education etc. Behavioral nudge in practical applications.
- Models of individual decision: dynamicsIntertemporal preferences and intertemporal inconsistency. Exponential and hyperbolic discounting. Multiple selves models and their applications to temptation, self-control, procrastination.
- Social preferencesSocial dilemmas and collective choice. The public goods game and cooperation across the globe. Punishment in experiments and in the field. Explanation to behavioural puzzles.
- Behavioural game theoryGame theory and behavioural games. Ultimatum, dictator, trust game – theoretical predictions and empirical evidence. Deviations from theoretical predictions and their explanations. Behavioural theories of collective decision making: inequity aversion, fairness, reciprocity, guilt aversion etc. Experimental evidence.
Interim Assessment
- Interim assessment (2 module)0.3 * Course project + 0.5 * Exam paper + 0.2 * домашние задания
Bibliography
Recommended Core Bibliography
- Advances in behavioral economics, , 2004
- An introduction to behavioral economics, Wilkinson, N., 2012
- Думай медленно... решай быстро, Канеман, Д., 2019
Recommended Additional Bibliography
- Behavioral game theory : experiments in strategic interaction, Camerer, C. F., 2003
- Choices, values, and frames, , 2005
- Thinking, fast and slow, 499 p., Kahneman, D., 2013
- Принятие решений в неопределенности : правила и предубеждения, Канеман, Д., 2005
- Принятие решений при многих критериях: предпочтения и замещения, Кини, Р. Л., 1981