Behavioral Economics & Decision Making

This course seeks to better understand how psychological variables affect economic outcomes. More specifically, we will focus on the psychological processes and biases underlying decision-making with an emphasis on how to incorporate such insights into marketing, management, and business more generally. The course has two facets: first, it gives students a broad overview of important results from the behavioral sciences (e.g., social and cognitive psychology, consumer research) that show how people really make decisions (in contrast to the rational expectations model underlying classical economic theories); second, it provides students with practical advice about applying these findings to topics in business. Topics covered include: decision models, decision heuristics and biases, risk, impatience and self-control, bounded awareness and information filtering, fairness, bounded ethicality, choice architecture and nudges. Class time will be devoted to a combination of lectures, discussion, exercises, and casework. Grading will be based on class participation, individual case write-ups, other assignments, and a final exam.