Introductory description

This module aims to provide an in depth coverage of fundamental behavioural economic concepts.

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.

The course will contain coverage of the following topics:
Foundations of individual economic behaviour - indifference curve analysis, the individual's demand for goods and supply of labour, and the role of behavioural traits in conusmption behaviour.
Decision under risk and uncertainty - conventional Subjective Expected Utility Theory: some applications and some concerns about the standard assumptions. Selected alternatives to the Subjective Expected Utility.
Portfolio choice and other financial applications of Subjective Expected Utility and other models of behaviour.
Extensions to intertemporal choice.
Foundations of the supply side - costs of production and the objectives of firms.
Demand and supply under perfect competition, monopoly, monopolistic competition and oligopoly.
Strategic interactions between firms. Introduction to game theory and some economic applications; some concerns about the standard assumptions and solution concepts.
Market failure and the role of government: externalities, public goods, the public provision of goods and services and other interventions in markets.

Learning outcomes

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

• Demonstrate a comprehensive understanding of fundamental and certain advanced economic principles and methods of economic analysis.
• Show an awareness of the questions that have been raised about the behavioural validity of some of the assumptions underpinning conventional economic analysis.
• Critically explain market failure and the role of state intervention in the reduction of negative externalities caused by firm behaviour.

Indicative reading list

Required textbooks:
Perloff, J. M. (2023). Microeconomics: theory and applications with calculus, global Edition, Pearson.
Baddeley, M, (2019). Behavioural economics and finance, Routledge,
Students will be encouraged to read additional books. Other texts which offer more critical behavioural perspectives are:
Wilkinson, N.: An Introduction to Behavioral Economics. Palgrave Macmillan (2017). This is a solid but basic introduction to the fundamentals of behavioural economics.
Frank, R. H. (2009). Microeconomics and behavior. McGraw-Hill. This covers basic microeconomic principles with a focus on individual behaviour.
Thaler, R. and Sunstein, C. (2009). Nudge. Yale University Press, New Haven and London.

Subject specific skills

Use game theory to predict the responses of firms to changes in their competitive environment.

Transferable skills

Demonstrate written communication skills.
Demonstrate critical reasoning and problem solving skills.