BEHAVIORAL ECONOMICS AND CONSUMER DECISION MAKING 

This course offers an introduction to behavioral economics and its applications towards theories of consumption. At the end of the course, students will be expected to have learned the fundamentals of the behavioral approach to judgment and decision making and, most importantly, to have learned the tools and acquired the skills necessary to successfully apply behavioral insights in the context of marketing and consumption

Basic microeconomics.

(1) Knowledge and understanding: The course will offer key concepts and ideas from behavioral economics and psychology, both in the context of decisions and in the context of judgment. Students will be able to appreciate behavioral descriptive theories of choice and judgment against the backdrop of traditional normative theories of rationality. (2) Applying knowledge and understanding: An integral part of this course is the project work that students will build throughout the semester with the help of the instructors' and peers' feedback. They will learn how to take insights from behavioral economics and apply them to a behavioral issue. (3) Making judgements: Students will be able to understand the bounds of traditional normative models, which will improve their analytical and decision-making skills. In particular, students will appreciate the importance of taking into account data and the pitfalls of relying on partial data, as it is often intuitively done. Thus, this course not only will expand the conceptual toolbox of students, enabling them to make judgment on a wider area, but will also give students the conceptual tools to avoid common mistakes and ameliorate their judgment skills. (4) Communications Skills: Part of the lectures will be devoted to class discussion, helping students articulate their knowledge and sharpen their communication skills. Part of student assessment will revolve around presentations, discussions and providing feedback. (5) Learning skills: This course stresses the importance of autonomous learning and will empower students by offer them innovative analytical tools to reason about choices in society and in the economic models on which behavioral interventions are based.

The first, introductory, module will revolve around the conceptual tools necessary to grasp and master the behavioral approach to economics. In this module we will discuss the main theoretical ideas of behavioral economics, contrasting them with the traditional approach both in the context of choice (prospect theory) and in the context of judgment (heuristics and bias). In the second part of the course we will discuss interdependent choice and the impact of social norms on behavior. In the third part of the course we will look at some applications to key issues in behavioral economics.

Required: Cartwright, Behavioral Economics Additional teaching materials provided by the professors. Suggested: Kahneman, Thinking Fast and Slow

timely request, agreed upon topic.