Behavioral and Experimental Economics
General information about
the course:
This course is an introduction to Behavioral and
Experimental Economics. Behavioral Economics has emerged as a discipline
studying situations in which the behavior of people does not correspond to the
predictions of standard economic theory. Mainstream economics is based on
several assumptions. First, economic agents are assumed to maximize their own
utility. Second, agent’s behavior is not influenced by social or emotional
factors. Third, agents have unlimited cognitive abilities allowing them to
choose optimally from all available alternatives. Since 1970s researchers have
accumulated a lot of evidence showing that the observed human behavior is at odds with what is predicted based on
these assumptions. People often make “irrational’ choices with respect to their
insurance, saving plans, health,
participation in lotteries, etc. In this course we will consider the new
concepts that help to explain the observed anomalies of human behavior. Since
large part of these anomalies has been detected with the help of economic
experiments, we will spend a lot of time discussing this methodology and its
examples.
Course goals and learning
objectives:
This course has several learning objectives. First of
all, it aims at developing interdisciplinary thinking. Behavioral Economics
(broadly defined) combines knowledge from several disciplines, such as
Economics, Psychology, Sociology and Neuroscience. Students will learn how to
formalize the concepts from social sciences outside Economics (e.g., fairness,
reciprocity, trust, envy etc.) and how to incorporate them into economic
models. Second, the course is focused on understanding what is an economic
experiment. Students will discover various types of experiments (lab, field,
natural, etc.) and learn how to use experiments to test economic theories.
Finally, the course helps to develop critical thinking with respect to the
results of economic research. Students will have a chance to train their
ability to be conscious readers of economic studies and integrate evidence from
various sources.
Who can benefit from this
course?
This course is for anyone who wants to broaden their
understanding of human economic behavior. Since Behavioral Economics gets more
and more incorporated into many areas of economic research anyone has a chance
to come across its basic notions in their field of interest. The course implies
that you have taken a course in Microeconomics as well as a course in calculus
and statistics.