Introductory description

This module introduces students in the Economics department to the latest topics in behavioural and experimental economics. Through a combination of lectures, readings, and class discussions, students will gain an enhanced understanding of new behavioural theories and their implications in a wide range of economic and social environments. The module will also familiarize students with various policies that use behavioural insights, providing them with an opportunity to explore new areas with policy implications and new ideas for policy design. By the end of the module, students will have developed critical thinking skills that will enable them to analyse and evaluate economic decisions and policies from a behavioural perspective.

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.

• Foundation topics in Behavioural Economics 1
• Foundation topics in Behavioural Economics 2 -1
• Human Morality and Social Identity 1
• Emotions and Human Behaviour 1
• Mental Accounting and Judgement Heuristics 1
• Behavioural Environmental Economics (energy and environment) 1
• Behavioural Economics of Happiness
• Culture and Economic Decisions- guest lecturer 1
• Behavioural Game Theory and Evolutionary Game Theory -2
• Behavioural Macroeconomics and Finance (Bounded rationality in the financial market) 1
• Policymaking using Behavioural Insights- Education/Health Economics 1
• Contest
• Mechanism Design
• Auctions
• Information economics/information acquisition
• Network economics
• Nudges
• Development Behavioural economics

Learning outcomes

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

• Familiarity with new areas in behavioural and experimental economics: ... be familiar with emerging areas in behavioural and experimental economics, including human sociality, emotion, behavioural and environmental economics, and behavioural finance. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, seminars and background reading. The summative assessment methods that measure the achievement of this learning outcome are: Examination and written report.
• A behavioural perspective: ... demonstrate an ability to look at economic and social issues from a behavioural perspective, gaining an understanding of the role of cognitive biases and heuristics in decision-making. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, seminars and background reading. The summative assessment methods that measure the achievement of this learning outcome are: Examination and written report.
• Applying behavioural theories: ... demonstrate how to apply new behavioural theories to different fields, such as environmental economics and finance, and develop the ability to analyse different phenomena in behavioural science. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, seminars and background reading. The summative assessment methods that measure the achievement of this learning outcome are: Examination and written report.
• Discuss and understand behavioural public policy: ... discuss various aspects of behavioural public policy, critically analysing these policies and comparing them with classic public policy. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, seminars and background reading. The summative assessment methods that measure the achievement of this learning outcome are: Examination and written report.
• Develop a critical understanding of how behavioural economics can contribute to policymaking and apply their knowledge to real-world economic problems. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, seminars and background reading. The summative assessment methods that measure the achievement of this learning outcome are: Examination and written report.

Indicative reading list

Paule-Vianez, J., Gómez-Martínez, R. and Prado-Román, C., 2020. A bibliometric analysis of behavioural finance with mapping analysis tools. European Research on Management and Business Economics, 26(2), pp.71-77.
Bouri, E., Gupta, R. and Roubaud, D., 2019. Herding behaviour in cryptocurrencies. Finance Research Letters, 29, pp.216-221.
Shanmuganathan, M., 2020. Behavioural finance in an era of artificial intelligence: Longitudinal case study of robo-advisors in investment decisions. Journal of Behavioral and Experimental Finance, 27, p.100297.
Pujara, V., Joshi, B.P. and Virmani, C., 2022. Nudge: A Bridge Between Choice and Desired Decision. International Journal of Applied Behavioral Economics (IJABE), 11(1), pp.1-15.
Cartwright, E. (2014). Behavioral economics. Routledge. Ch 1 (pages 3-15)
Wilkinson, Nick. (2007). An introduction to behavioural economics. Basingstoke : Palgrave Macmillan, http://www.loc.gov/catdir/enhancements/fy0807/2007052306-t.html
Erik Angner (2016), A Course in Behavioral Economics 2e, Palgrave Macmillan, Basingstoke, 2016, https://www.worldcat.org/title/966560594
Lucy Ackert and Richard Deaves, Behavioural Finance, Psychology, Decision Making, and Markets
Congdon, William, Jeffrey Kling, and Sendhil Mullainathan. Policy and Choice: Public Finance Through the Lens of Behavioral Economics (selected chapters). Brookings Institution Press: Washington, D.C. 2011
[Free eBook download at http://www.brookings.edu/press/Books/2011/policyandchoice.aspx]

Rabin, Matthew. ‘Psychology and Economics’, Journal of Economic Literature, 36(1), 1998: 11-46.

DellaVigna, Stefano. ‘Psychology and Economics: Evidence from the Field’, Journal of Economic Literature, 47(2), 2009: 315-372.

Fehr, Ernst and Simon Gachter. ‘Fairness and Retaliation: The Economics of Reciprocity’, Journal of Economic Perspectives, 14(3), 2000: 159-181.

Laibson, David. ‘Golden Eggs and Hyperbolic Discounting’, The Quarterly Journal of Economics, 112(2), 1997: 443-477.

Camerer, Colin, Linda Babcock, George Loewenstein, and Richard Thaler. ‘Labor Supply of New York City Cabdrivers: One Day at a Time’, The Quarterly Journal of Economics, 112, 1997: 407-441.

Gabaix, Xavier and David Laibson. ‘Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets’, The Quarterly Journal of Economics, 121(2): 505-540.

Bernartzi, Shlomo and Richard Thaler. ‘Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving’, Journal of Political Economy, 112(1), 2004: S164-S187.

Kahneman, Daniel and Amos Tversky. ‘Prospect Theory: An Analysis of Decision under Risk’, Econometrica, 47(2), 1979: 263-292.

Interdisciplinary

The module in behavioural economics offers an interdisciplinary approach that combines insights from economics, psychology, sociology, and other relevant disciplines. By integrating theories and methods from these diverse fields, students are equipped with a comprehensive understanding of human decision-making and its impact on economic and social outcomes. This interdisciplinary perspective allows students to delve into the complexities of economic behaviour, exploring the role of cognitive biases, social factors, and emotions in shaping individual choices and societal outcomes. Moreover, the module emphasizes the application of behavioural theories in various domains, such as environmental economics, finance, and public policy. By bridging the gap between academic disciplines, this module enables students to develop critical thinking skills and apply behavioural insights to real-world economic problems, fostering a holistic understanding of economic behaviour and its implications in a wide range of contexts.

Subject specific skills

Students will improve their understanding of various economic phenomena through a revised form of economic theories and insights from behavioural science. They will be able to find a broader and interdisciplinary perspective on economic issues. The new perspective will give the student the ability to analyse with consideration of different social, psychological and economic factors. The module is an opportunity for the students to learn the experimental methodology that is commonly used in behavioural economics.

Transferable skills

Students will have the opportunity to develop : Data-based skills; IT skills; Written communication skills; Oral communication skills; Mathematical, statistical and data-based research skills.