Advanced Behavioural Economics

Students who are not enrolled in the research master Multidisciplinary Economics should contact the course coordinator for enrollment in this course.

The core theory used in traditional economics rests on basic assumptions on individual selfishness, rationality and utility maximization. During the last three decades, these assumptions have been put into question by a growing stream of literature, broadly defined as “behavioral economics”, which has introduced psychological complexity into the standard economic framework of individual decision making, with the goal of explaining observed puzzles as well as improving the predictive power of models.

Based on field and experimental evidence on how individual behavior departs from the conventional theoretical predictions, behavioral economists have posited explanations for these departures, proposed extensions to the existing models and alternative theoretical approaches aimed at capturing them, and considered what are the possible practical implications of these findings. The focus of this course will be on deviations from the standard economic paradigm in three main domains:

• Choice under certainty, and risk and uncertainty

• Intertemporal choice

• Social preferences

• Strategic thinking

Exit requirements
· Broad knowledge of core and state-of-the-art theories and empirical methods in economics
· Ability to think in a logical way·
· Ability to critically appraise literature
· Ability to make own research relevant for society
· Being capable of solving problems in a broad (multidisciplinary) context from a discipline-specific economic perspective, while considering relevant social, societal and ethical aspects ·
· Keep track of the external validity and societal relevance of own research

Learning objectives
At the end of the course, the student is able to:

• Distinguish psychological biases and their relevance for various applications;
• Compare predictions of standard models to the behavioural models in various applications;
• Assess the findings of empirical studies on behavioral models in various applications;
• Assess the predictive power of behavioural models in various applications.

You must meet the following requirements

• Enrolled for one of the following degree programmes
• Multidisciplinary Economics (research)

• Book The Foundations of Behavioural Economic Analysis
• Book Markets, games, and strategic behavior: An introduction to experimental economics.
• Book Behavioural Game Theory: Experiments in strategic interaction
• Book Advances in Behavioural Economics