This course investigates the psychological and economic processes underlying individual and social decision-making. We will develop an understanding of the differences between major theories and research practices in economics and psychology. We will learn when and why economic theories fail descriptively, and what alternative theories of decision-making have been proposed. Finally, we will address how the findings from psychology and economics can be applied to improve public policy and real-life decision-making.
- Recall, discuss, and evaluate the basic ideas and findings from the scientific papers discussed in the course
- Give a reasoned opinion of fundamental issues and debates on economic decision making that were discussed during the lectures
- Apply these ideas and findings to the formulation of solutions to real-life problems (e.g., problems in organizational behavior, medical decision-making, and public policy)
There are a total of fourteen class meetings. Each meeting consists of the following four parts:
- 10-15 minute quiz on the assigned readings.
- 30-minute group presentation on an additional reading.
- 15-minute break.
- 45-minute class discussion.
Grading in this course will be based on individual assessments (50%) and group assessments (50%):
Individual assessments consist of a final exam at the end of the course.
Group assessments consist of an academic research paper (due at the end of the course, 50%) and a mandatory group presentation.
Bachelor in Psychology or Economics
Economics deals with the behavior of humans and hence should be considered as a behavioral science. It is mainly concerned with prescribing what economic agents should do, what they should choose, in order to maximize their personal outcomes (i.e., to be rational). Two broad theories of rational choice can be identified, Utility Theory has been proposed to understand individual decision making and Game Theory has been proposed to understand the behavior of individuals in interdependent situations.
Psychologists and economists (often referred to economic psychologists or behavioral economists) have studied whether and how utility theory and game theory describe and predict the behavior of individuals. It appears that people systematically violate the assumptions of these theories. Therefore, in order to come to a better understanding of human behavior, a new approach that takes these violations into account should be developed. In this course we discuss these economic theories, the behavioral violations and the suggested alternative theories of economic behavior.
Type of instructions
Type of exams
14 quizzes (graded pass/fail) and 1 written exam
- A selection of articles from academic journals will be announced at the beginning of the course..