Universität Wien

040296 UK Introduction to Behavioral Economics (BA) (2018W)

8.00 ECTS (4.00 SWS), SPL 4 - Wirtschaftswissenschaften
Continuous assessment of course work
Moodle

Registration/Deregistration

Note: The time of your registration within the registration period has no effect on the allocation of places (no first come, first served).

Details

max. 50 participants
Language: English

Lecturers

Classes (iCal) - next class is marked with N

  • Monday 01.10. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 02.10. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 08.10. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 09.10. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 15.10. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 16.10. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 22.10. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 23.10. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 29.10. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 30.10. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 05.11. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 06.11. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 12.11. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 13.11. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 19.11. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 20.11. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 26.11. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 27.11. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 03.12. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 04.12. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 10.12. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 11.12. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 07.01. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 08.01. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 14.01. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 15.01. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 21.01. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 22.01. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
  • Monday 28.01. 15:00 - 16:30 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Tuesday 29.01. 16:45 - 18:15 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock

Information

Aims, contents and method of the course

The course aims to make students familiar with the most relevant theories of psychology and economics (behavioral economics). We start reviewing standard economic theories and solution concepts such as Expected Utility Theory for decision making under risk, Samuelson's discounted utility model, and Nash equilibrium for non-cooperative game theory. We then proceed to discuss the weaknesses of these theories in light of empirical evidence from the laboratory, from field data, and even from the student's choices. We proceed to study and discuss alternative models that better fit the regularities described by human choice data and that are well-known in the literature such as Nobel-prize-winning prospect theory, quasi-hyperbolic discounting, quantal response equilibrium, and inequality aversion.

Method:

The course is divided in four modules. In each of the modules a theory of behavioral economics is presented by the lecturer along with its respective empirical regularities. The applications of each of these theories are discussed and presented by the students.

DISCLAIMER: This course is designed for intermediate to advanced bachelor students. Intermediate knowledge of Microeconomics and basic knowledge of Econometrics is recommended.

Assessment and permitted materials

The grade of the course will be assessed using these criteria:

-Midterm (30%)

-Presentation (30%)

-Research Proposal (40%)

Minimum requirements and assessment criteria

The sum of the score of midterm, presentation, and final exam needs to be higher than 50%.

Examination topics

Module 0: Introduction

Module 1: Decision making under risk
-Expected Value.
-Expected Utility Theory
-The Allais paradox and other anomalities.
-Original Prospect Theory.
-Rank Dependent Utility Theory.
-Cumulative Prospect Theory.

Module 2: Intertemporal Decision-Making.

-Samuelson's discounted utility model.
-Hyperbolic discounting
-Quasi-hyperbolic preferences.
-Alternative models of intertemporal decision-making

Module 3: Behavioral Game Theory

-Non-cooperative game theory and Nash Equilibrium.
-Cognitive Hierarchy Theory
-Quantal response equilibrium.

Module 4: Social Preferences

- Inequity aversion.
- Fairness.
-Other models of social preference

Reading list

-Tversky, A., & Kahneman, D. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and uncertainty, 5(4), 297-323.

-Kahneman, D., & Tversky, A. (2013). Prospect theory: An analysis of decision under risk. In Handbook of the fundamentals of financial decision making: Part I (pp. 99-127).

-Wakker, P. P. (2010). Prospect theory: For risk and ambiguity. Cambridge university press.

-Gonzalez, R., & Wu, G. (1999). On the shape of the probability weighting function. Cognitive psychology, 38(1), 129-166.

Laibson, D. (1997). Golden eggs and hyperbolic discounting. The Quarterly Journal of Economics, 112(2), 443-478.

Thaler, R. (1981). Some empirical evidence on dynamic inconsistency. Economics letters, 8(3), 201-207.

Frederick, S., Loewenstein, G., & O'donoghue, T. (2002). Time discounting and time preference: A critical review. Journal of economic literature, 40(2), 351-401.

Goeree, J. K., Holt, C. A., & Palfrey, T. R. (2010). Quantal response equilibria. In Behavioural and Experimental Economics (pp. 234-242). Palgrave Macmillan, London.

McKelvey, R. D., & Palfrey, T. R. (1995). Quantal response equilibria for normal form games. Games and economic behavior, 10(1), 6-38.

Bolton, G. E., & Ockenfels, A. (2006). Inequality aversion, efficiency, and maximin preferences in simple distribution experiments: comment. American Economic Review, 96(5), 1906-1911.

Fehr, E., & Schmidt, K. M. (1999). A theory of fairness, competition, and cooperation. The quarterly journal of economics, 114(3), 817-868.

Association in the course directory

Last modified: Mo 07.09.2020 15:29