Behavioral Economics

Introduction

This course explores how formal models of behavioral economics can help us understand experimental data. The weight is on building intuitions rather than on developing technical skills. Students should be aware that this is a highly quantitative course.

Behavioral economics uses controlled experiments to document systematic deviations from the neo-classical theory built on pure self-regard and full rationality. Also, replicable deviations are used as input for new models capable of explaining observations better. The field covers a huge variety of substantial questions, pertaining to e.g. individual decision making, market interaction, social dilemmas, bargaining, auctions and voting.

Course content

• What is behavioral economics?
  • The standard model in economics
  • Alternative assumptions
  • Lab -and field experiments as tools
• Individual decision making
  • Values, attitudes, preferences
  • Risk and uncertainty
  • Inter-temporal choices
• Strategic interaction
  • Bargaining
  • Public goods provision
  • Markets
  • Fairness and social preferences
  • Trust and emotions
  • Non-rational learning