This course provides a foundation in behavioral economics and the role of experimental
methods in economics.
The traditional approach in economics is to explain market outcomes and economic
decision-making using simple theoretical models based on perfectly rational, self-interested
agents who maximise their well-being by carefully weighing up the costs and benefits of
different alternatives. Behavioral economics, on the other hand, aspires to relax these
stringent assumptions and develop an understanding of how people actually make
decisions. Analogously, experimental economics also contrasts with the approach that, until
recently, was more standard. lt uses laboratory techniques as a supplement or alternative to
drawing data exclusively from the field. The module will introduce students to behavioral
and experimental economics, discuss these fields from a methodological perspective and
examine several areas of economic analysis in which they are applied.
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