Course Level: Beginner
Format Requirements: The format will be largely didactic. Discussion will be encouraged including the presentation of examples from class members. No prerequisites are required, but familiarity with basic concepts in economics and/or psychology will be helpful.
Background: This course provides an overview of research in "behavioral economics" which integrates insights from psychology into economic models of behavior. It will focus on ways in which individuals may systematically depart from assumptions such as perfect rationality, self interest, and time consistency, and will discuss empirical strategies for distinguishing between such behavioral decision-making and the predictions of the standard model. Finally, it will discuss ways in which behavioral economics has been applied to the medical domain with attention to examples in aging populations. The learning objective is that students should be able to explain the meaning of the following concepts in the economic and psychological study of decision making, and demonstrate an awareness of the available evidence on them: mental accounting, anchoring, the endowment effect, the default bias, framing, dynamic inconsistency, pre-commitment, the sunk cost fallacy, projection bias, hot-hand fallacy, gambler's fallacy, prospect theory, loss aversion, and diminishing sensitivity.
Description and Objectives: This course provides an overview of research in "behavioral economics" which integrates insights from psychology into economic models of behavior. It will focus on ways in which individuals, and older individuals in particular, may systematically depart from assumptions such as perfect rationality, self interest, and time consistency, and will discuss empirical strategies for distinguishing between such behavioral decision-making and the predictions of the standard model. Finally, it will discuss ways in which behavioral economics has been applied to the medical domain with attention to examples in aging populations. The learning objective is that students should be able to explain the meaning of the following concepts in the economic and psychological study of decision making, and demonstrate an awareness of the available evidence on them: mental accounting, anchoring, the endowment effect, the default bias, framing, dynamic inconsistency, pre-commitment, the sunk cost fallacy, projection bias, hot-hand fallacy, gambler's fallacy, prospect theory, loss aversion, and diminishing sensitivity.