Introductory description

This module explores the real-world applications of concepts in behavioural economics, in particular how governments and firms have applied insights from behavioural economics to promote behaviour change. Lectures will begin with a brief overview of the behavioural
economics concept under consideration and will then move to discussion of the relevant real-world applications, including a deeper dive into select academic papers on the topic.

Topics include the applications of behavioural economics to: health; education; firms and the workplace; savings; tax salience and compliance; labour market discrimination; development and scarcity; charitable giving; and cross-country differences. Throughout,
we will interweave discussions of methods used to research these topics. We will conclude with an assessment of when insights from behavioural economics are more or less likely to be applied effectively in real-world contexts.

Module web page

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

This module will cover topics related to the real-world applications of behavioural economics over ten weeks:

1. Health
2. Education
3. Firms and the workplace
4. Savings
5. Tax salience and compliance
6. Labour market discrimination
7. Development and scarcity
8. Charitable giving
9. Cross-country differences
10. When behavioural applications do (and do not) work

Learning outcomes

By the end of the module, students should be able to:

• Understand and demonstrate detailed knowledge of the existing applications of behavioural economics to policy and firm decision-making.
• Demonstrate an understanding of how to translate insights from behavioural economics into testable applications to policy and firms.
• Demonstrate the ability to make flexible use of the methodological techniques relevant to the evaluation of behavioural applications.
• Deploy critical thinking, judgement and decision-making skills in complex, uncertain and ambiguous situations.
• Appreciate the importance of making ethical and sustainable decisions.

Indicative reading list

Core reference text:

• Bernheim, D. et al. (editors) (2018). “Handbook of Behavioral Economics – Foundations and Applications 1,” 1: 1-724.
  Selection of weekly readings:
• Allcott, H. (2011). “Social norms and energy conservation,” Journal of Public Economics, 95: 1082-1095.
• Bessone et al. (2021). “The Economic Consequences of Increasing Sleep Among the Urban Poor,” Quarterly Journal of
  Economics, 136(3): 1887–1941.
• Bursztyn et al. (2019). “Cool to be Smart or Smart to be Cool? Understanding Peer Pressure in Education,” Review of
  Economic Studies, 86(4): 1487-1526.
• Chetty, R. et al. (2009). “Salience and Taxation: Theory and Evidence,” Amercian Economic Review, 99(4): 1145-1177.
• Cullen, Z. and Perez-Truglia, R. (2022). “How Much Does Your Boss Make?: The Effect of Salary Comparisons,” Journal of
  Political Economy, 130(3): 766-822.
• DellaVigna, S. and Linos, E. (2022). “RCTs to Scale: Comprehensive Evidence From Two Nudge Units,” Econometrica,
  90(1): 81-116.
• Dellavigna, S., et al. (2012). “Testing for Altruism and Social Pressure in Charitable Giving,” Quarterly Journal of Economics,
  127(1): 1-56.
• Falk, A. et al. (2018). “Global Evidence on Economic Preferences,” Quarterly Journal of Economics, 133(4): 1645-1692.
• Kremer. (2011). “Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya,” American Economic
  Review, 101(6): 2350-90.
• Milkman, K. et al. (2021). “A 680,000-Person Megastudy of Nudges to Encourage Vaccination in Pharmacies,” PNAS,
  119(6).
• Niederle, M. and Vesterlund, L. (2007). “Do Women Shy Away From Competition? Do Men Compete Too Much?,” Quarterly
  Journal of Economics, 122(3): 1067-1101.
• Thaler, R. and Benartzi, S. (2004). “Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving,”
  Journal of Political Economy, 112(S1): S164-S187.

Interdisciplinary

This module will bring together learnings from economics and psychology.

International

Two weeks will cover "development and scarcity" and "cross-country differences," both of which will directly touch on international
topics.

Subject specific skills

Evaluate and interpret empirical estimates typically reported in the behavioural economics literature.

Understand how to read and interpret literature in applied behavioural economics.

Transferable skills

Participate in discussions about how and why people in business and policy makers have made use of insights from behavioural economics,
and offer new and cost-effective solutions to the current practices.