Course Level: Beginner
Format Requirements: The class will be part lecture-based and part discussion-oriented. Students will also complete an exercise or two designed to help them understand decision phenomena in action (e.g. overconfidence).
Background: This course provides an overview of behavioral economics – the application of psychological insights to standard economic theory, popularized by recent popular non-fiction books such as “Nudge” and “Predictably Irrational”. I will discuss how people’s behavior systematically departs from that predicted by the standard economic model, and how this gives rise to a variety of decision errors and biases such as loss aversion, anchoring, framing, and default effects. Finally, I will discuss recent work in which behavioral economics has been applied to the field of medical decision making. To teach this course, I will draw on my background in behavioral economics and psychology. I hope the course will help researchers and practitioners to better understand people’s behavior when it comes to the health decisions they make. I also hope that the course will help the students to devise more effective programs to help people change their health behaviors.
Description and Objectives: This course provides an overview of research in "behavioral economics" which integrates insights from psychology into economic models of behavior. The first part of the course will focus on ways in which individuals may systematically depart from assumptions such as perfect rationality, self interest, and time consistency. The second part of the course will focus on ways in which behavioral economics has been applied to the medical domain; for example, to promote medication adherence, physical exercise, and weight loss. The learning objective is that students should be able to explain the meaning of, and demonstrate an awareness of the available evidence for phenomena such as: mental accounting, anchoring, the endowment effect, the default bias, framing, dynamic inconsistency, pre-commitment, the sunk cost fallacy, prospect theory, and loss aversion. There are no pre-requisites.