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Unit information: Behavioural Economics in 2018/19

Please note: It is possible that the information shown for future academic years may change due to developments in the relevant academic field. Optional unit availability varies depending on both staffing and student choice.

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

None

School/department School of Economics, Finance and Management
Faculty Faculty of Social Sciences and Law

Description

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.

Intended learning outcomes

On successful completion of this unit a student will be able:

  • to analyse and discuss a wide range of issues in behavioural economics;
  • to learn about the conceptual problems in modelling and describing such behaviour;
  • to have an overview of the empirical evidence for such behaviours;
  • to understand the policy implications of boundedly rational behaviour.

Teaching details

18 hours of lectures and 9 hours of classes.

Assessment Details

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.

Reading and References

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

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