Behavioural Economics: Theory and Applications ECON4049
- Academic Session: 2022-23
- School: Adam Smith Business School
- Credits: 15
- Level: Level 4 (SCQF level 10)
- Typically Offered: Semester 1
- Available to Visiting Students: Yes
- Available to Erasmus Students: Yes
Behavioural Economics makes assumptions about human agents that are grounded in empirical work in psychology and experiments (whether in the laboratory or in the field). This course will focus on conceptual foundations (core assumptions and models), problem solving and applications to topics such as psychology of poverty, boundedly rational consumers and behavioural finance: the emphasis will be on insights about human behaviour and institutions that are new, interesting and policy-relevant.
Lectures: 10 x 2-hour lectures
Additional 1 hour revision lecture
Tutorials: 6 x 1-hour tutorials
Main Assessment In: December
Are reassessment opportunities available for all summative assessments? No
Reassessments are normally available for all courses, except those which contribute to the Honours classification. For non Honours courses, students are offered reassessment in all or any of the components of assessment if the satisfactory (threshold) grade for the overall course is not achieved at the first attempt. This is normally grade D3 for undergraduate students and grade C3 for postgraduate students. Exceptionally it may not be possible to offer reassessment of some coursework items, in which case the mark achieved at the first attempt will be counted towards the final course grade. Any such exceptions for this course are described below.
This course aims to provide an introduction to Behavioural Economics and its relationship with neoclassical economic theory. The focus will be on decision making by individuals in a variety of contexts such as choosing under uncertainty, intertemporal decision making and strategic considerations in decision making.
Intended Learning Outcomes of Course
By the end of this course students will be able to:
1. Identify and critically evaluate both the strengths and weaknesses of the rationality assumption in Economics;
2. Recognise and clearly explain some heuristics and biases that affect people's thinking such as anchoring and adjustment, base-rate neglect, loss aversion and ambiguity aversion;
3. Understand traditional models of Economics and models of Behavioural Economics such as reference dependent preferences, dynamically inconsistent preferences, social preferences, psychological games and behavioural game theory;
4. Learn how to identify an effect from the data and econometrically estimate a model
5. Think of ways to unify all behavioural models in one single model with few fundamental principles and one coherent theory like the traditional model based on individual rationality
Minimum Requirement for Award of Credits