Behavioral Economics

The course assumes that individuals are not fully rational and motivated only by strict self-interest. Behavioral economics modifies the standard assumptions in economics, and takes into account that human rationality has its limitations and that people often have complex motives for what they do. Insights from psychology and neuroscience are used to modify the standard assumptions by including moral considerations, social interaction, attitudes to risk, etc. Examples of topics covered in the course: - Theory of decision-making behavior - Decisions under uncertainty and risk assessment - Decisions over time - Social preferences and justice - Game theory (strategic behavior?)

Knowledge

You learn

• about important contributions from other fields of study to economics
• about how modified conditions can explain economic phenomena that can not be predicted from rationally optimizing behavior and what consequences this has for resource allocation and pricing about different games and methods and implications for financial outcomes

Skills

You should be able to

• understand and describe modified behavioral assumptions and explain how they affect financial outcomes
• critically explain the consequences of modified allocation prerequisites for resource allocation and pricing.

General competence:

You should be able to

• know important contributions to behavioral economics and be able to critically assess the importance of these for financial decisions
• to use insight from behavioral economics to critically evaluate economic claims presented in public debat

2 hours of lectures every week. Information about tutorials and compulsory activity will be announced at the beginning of the term.