Psychology and Economic Behaviour

Why do we save, spend, donate, or take risks—often against our own best interests? Even the smartest people make surprisingly irrational choices. But are these choices simply mistakes, or do they serve other important functions? This course explores the psychology behind everyday economic decision-making. Focusing on cognitive, emotional, and social influences, it reveals why we think and act the way we do depending on the decision-making context—for example, when choices involve the future, money, or limited information. Through lectures, you’ll learn how psychological phenomena are tested and how psychological insights can help individuals make better choices, as well as how policymakers can design smarter interventions that improve individual and societal well-being.

Given the introductory and knowledge-desseminative nature of the course, this course will consist of a series of lectures. These lectures introduce foundational principles of economic psychology and a range of psychological approaches to understanding everyday decision making. Course content draws on research from social and developmental psychology, judgment and decision making, and applied psychology, with an emphasis on empirical findings and their relevance to real-world issues. Assessment consists of lecture attendance and two exams (a midterm and a final), supported by interactive in-lecture quizzes to facilitate learning.

The entire course will be taught in English. This also includes exams.

At the end of the course the student is able to:

• Explain and describe key psychological mechanisms that influence and shape economic decision-making.
• Apply and analyze psychological theories and concepts to evaluate decision-making behavior across diverse economic and real-world contexts.
• Critically evaluate empirical research findings and formulate evidence-based practical recommendations and future research directions for real-life decision-making situations.

Although students are assumed to have a basic understanding of classical economic theories and relevant theories from the social sciences, we will also briefly touch upon these topics at the beginning of the course.

• Literature Other literature will be made available.