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Bus 4654: Behavioural Economics

This course will use psychology and economics to explore a variety of business and social problems that result from systematic errors and biases in judgment. We will ask questions about how these errors influence decision making in business, consumer behaviour, government, philanthropy, the environment, and our personal lives. Each module of the course is dedicated to a specific problem space for which behavioural economics can prescribe a method of engagement to build better organizations and communities.

Discussions and assessments from this course will prepare dedicated students with a civic knowledge and perspective to thoughtfully address challenges that their communities face. Consequently, this course will develop the student’s ability to recognize and implement effective workplace policies and public policies, a role we will refer to as a choice architect.

This course is fundamentally an economics course. As such, we will be interested in how various incentives and motivations influence the actions of individuals. However, we will take a more realistic approach to decision making than that made in the predominant school of neoclassical economics, which assumes that people are selfish, completely rational with stable preferences, and that they know how to do complicated math and statistics intuitively. We will show that people are not always self-interested, nor do they always act rationally. They tend to use simple rules to answer complicated questions and thus make predictable, systematic errors.

Session 1: Choice Architecture.

Session 2: Nudging Policy.

Session 3: Reference-dependent Preferences.

Session 4: Probability Weighting.

Session 5: Internalities.

Session 6: Present Bias.

Session 7: Ego Utility.

Session 8: Motivated Reasoning.

Session 9: Warm Glow Giving.

Session 10: Guest Speaker – Uma Venkataramaiah, TD Bank.

Session 11: Level-k Reasoning.

Session 12: Default Effects.

Session 13: Guest Speakers – Darcie Dixon and Jamal Alsaady, Behavioural Insights Consultants.

Session 14: Save More Tomorrow.

Session 15: Fairness in Markets.

Session 16: Social Norms.

Session 17: Commitment Devices.

Session 18: Easterlin Paradox.

Session 19: Group Presentations.

Session 20: Group Presentations.