Behavioral economics

This undergraduate course delivers a thorough overview of the principles and applications of behavioral economics, investigating the influence of psychological factors on economic decision-making. Students delve into key concepts, theories, and empirical evidence that challenge traditional economic assumptions. The course first contrasts traditional economic models with full rationality to some behavioral regularities and violations of rationality. Then it introduces topics such as prospect theory, loss aversion, present bias, social preferences, limited attention, cognitive biases, and heuristics.
Students also learn how to design policies that take behavioral biases into account. Practical applications extend to behavioral finance, health, environmental economics, and the psychology of poverty. The course emphasizes policy design considerations, incorporating insights from nudging, choice architecture, and lessons from behavioral public policy.
The course extends knowledge learned in courses of Microeconomics, Microeconomics of Uncertainty, Experimental Economics. It also contributes to the knowledge required for the job profiles of marketing technician and market analyst.

Students passing the course should be able to:
- Understand behavioral economic foundations and contrasting behavioral regularities and violations of rationality with traditional economic assumptions.
- Demonstrate understanding of concepts such as prospect theory, loss aversion, present bias, and social preferences. Evaluate how limited attention, cognitive biases, and heuristics impact decision-making processes.
- Critically evaluate observational and experimental evidence, including the ability to critically assess the robustness and generalizability of behavioral findings.
- Design policies considering behavioral biases, while critically evaluating the ethical implications and potential societal impacts of policies informed by behavioral insights.
- Improve critical thinking and communication skills.
- Understand where the frontiers of research in behavioral economics are.