| Unit name | Behavioural Economics |
|---|---|
| Unit code | EFIM30027 |
| Credit points | 20 |
| Level of study | H/6 |
| Teaching block(s) |
Teaching Block 2 (weeks 13 - 24) |
| Unit director | Professor. Cannon |
| Open unit status | Not open |
| Pre-requisites |
EFIM20008 Intermediate Economics 1 and either ECON20020 Econometrics or EFIM20010 Applied Quantitative Research Methods |
| Co-requisites | |
| School/department | School of Economics |
| Faculty | Faculty of Social Sciences and Law |
Modern economics has started to use models where economic decision making and action is not completely rational. This unit will consider theories of and evidence for such behaviour. Potential topics would include: paradoxes of having too much choice; framing effects; non-geometric discounting; problems of how to model individual behaviour if an individual realises that s/he is irrational; policy consequences; empirical research; biological research on testosterone, etc. Empirical examples could include mis-selling, financial literacy, pensions, financial markets.
On successful completion of this unit a student will be able:
16 lectures, 2 revision lectures and 9 classes.
Formative
One essay (2500 words) and two short problem-solving exercises.
Summative
Three-hour closed-book examination consisting of essays (66%) and short problem-solving questions (34%) at the end of the relevant teaching block.
The exam paper addresses all the learning outcomes.
Thaler and Sunstein (2009) Nudge: Improving Decisions About Health, Wealth, and Happiness
various articles, such as
Backus, Routledge and Zin (2004) “Exotic preferences for macroeconomists” NBER Macroeconomics Annual Vol. 19, pp. 319-390
Tversky and Kahneman (1992) “Advances in prospect theory: cumulative representation of uncertainty” Journal of Risk and Uncertainty, 5(1), pp.297-323.
Plott and Zeiler (2005) “The willingness-to-pay / willingness-to-accept gap, then endowment effect ... “American Economic Review, 95(3), pp.530-45
