People subscribe to gym membership but do not go there. They are on diet, but still give in for a chocolate cake. They have hard time saving money while spending some in impulsive purchases. In many ways, individuals make decisions that deviate from the standard assumption made by economists according to which humans are rational. Behavioral economics (hereafter BE), a still-growing strand of research, deals with the same big issues as standard economics (labor, health, savings, markets etc.) without making the assumption that people behave as homo œconomicus. Rather BE is an attempt to empirically check how humans actually behave. This course gives an overview of key insights from BE, describes the methodology used in BE, including experimental economics and randomized controlled trials, and identifies how BE can be used to understand and solve some important social and economic problems of our time.
Prerequisites: Yes (see syllabus)