Modulhandbuch (Module manual)

​No conditions are known.

​Behavioral economics has become an established sub discipline of economics that seeks to increase the understanding of economic behavior and decision-making. While maintaining the core principles of economics, namely optimization and equilibrium, behavioral models revise the assumptions that people are entirely selfish and fully rational in their choices and use insights from psychology, sociology, anthropology and neuroscience to make economic models more accurate and reconcilable with empirical findings that cannot be explained by standard economic frameworks. As the growing empirical evidence shows, especially through the method of experimental economics that allows economists to test theories about human behavior in controlled conditions, behavioral models continue to gain prominence in predicting and explaining economic behavior and are used in a wide array of economic applications. As Dhami (2016) stated: “Behavioral economics is possibly the fastest growing and most promising area in economics”.
In this course, we will take a closer look at some selected topics of behavioral economics. We first start with an introduction by giving some insights to this field and briefly present the method of experimental economics as an empirical way to test the predictions of the discussed models. Single topics that will subsequently follow include behavioral models of decision-making and their applications (e.g. prospect theory, mental accounting), bounded rationality (judgement, biases and heuristics), behavioral models of other-regarding preferences such as fairness, behavioral time discounting, behavioral market design and incentives, and behavioral interventions known as nudges.
For each topic we will present the main features of the model(s) (a little bit of math is required, but only on a very basic level), demonstrate how the underlying assumptions differ from standard economic models, highlight the empirical evidence and discuss how these insights can be applied to different economic domains.
In addition to the weekly lectures, there will be tutorials taking place every two or three weeks to exercise on the topics and deepen the contents of the course.

​Students are familiar with the foundations of behavioral economics.
Students gain a deeper understanding about how well concepts of behavioral economics predict and explain human behavior.

​Students apply concepts of behavioral economics to problems in management.
Students understand the motivation and principles of the underlying behavioral models, and are able to describe, analyze, and discuss mainly experimental study designs on sound scientific reasoning.

​Students actively participate in lectures and exercises, take part in classroom experiments, and discuss the contents of the course interactively with the course instructors and the other participants.

​Students are able to independently prepare for the course using English-language literature.
Students are able to apply concepts of behavioral economics through independent work on exercises.