Linköping University
Spring 2014
Behavioral Economics
730A15
Spring 2014
Gustav Tinghög (gustav.tinghog@liu.se)
Kinga Posadzy (kinga.posadzy@liu.se)
Course information
Course Overview: This course studies the ways that economic and psychological factors
jointly influence behavior. We will analyze choices that economic actors make in the lab
and in the field and we will try to explain these choices with economic models. We will
enrich the standard economic model by incorporating psychological mechanisms,
including limited rationality, limited self-control and social preferences. This course is
intended for students from all diciplines interested in research.
By the end of the course students should
• have an overview of major papers in the literature and appreciate differences between
neoclassical and behavioral methods.
• be able to apply the basic frameworks to economic problems.
• recognize some of the key debates in thinking about how behavioral economics can
inform public policy.
Collapsed Course Outline
Date
Topic
02-apr
04-apr
09-apr
11-apr
16-apr
23-apr
03-apr
??-apr
05-maj
09-maj
12-maj
16-maj
19-maj
20-maj
27-maj
28-maj
Behavioral economics, Introduction and
methods
Fairness and Social Preferences
Fairness and Social Preferences
Time Prefernces
Seminar
Risk preferencess
Termpaper topic due
Emotions and decision making
Behavioral Game Theory
Behavioral Game Theory
Mental Accounting
Applications of Behavioral Economics
Take-home exam send out
Take-home exam send in
Deadline:termpaper
Nudge: Book seminar
Readings
Presenter
Ch.1-3
Ch. 10 + articles
Ch. 10 + articles
Ch. 7-8 +articles
Articles
Ch. 5 +articles
Gustav
Gustav
Gustav
Gustav
Gustav
Kinga
articles
Ch. 9 + articles
Ch 9 + articles
Ch.6 + articles
Gustav
Kinga
Kinga
Kinga
Kinga
Nudge
Gustav
Linköping University
Spring 2014
02-jun
04-jun
Referee report due
Termpaper seminar
Gust&Kinga
Examination: Presence and active discussion at seminars, term-paper, and a
take-home exam. Grade on the course will be based on the take-home exam
Textbook:
”An Introduction to Behavioral Economics ”by Nick Wilkinson
”Nudge: Improving Decisions About Health, Wealth and Happiness” by Richard Thaler
and Cass Sunstein
Articles:
Fairness and Social Preferences
Henrich, J., R. Boyd, et al. (2001). "In search of Homo economicus: Behavioral
experiments in 15 small-scale societies." American Economic Review 91(2): 7378.
Mellström, C. and M. Johannesson (2008). "Crowding out in blood donation: was Titmuss
right?" Journal of the European Economic Association 6: 845-863.
Jacobsson F, Johannesson M, Borgquist L. (2007) Is altruism paternalistic? Economic
Journal vol. 117:761-781.
Gneezy U, Rustichini A. (2000) A fine is a price. Journal of Legal Studies vol. 29:1-17.
Time Preferences
Frederick, K. (2003). "Measuring intergenerational time preferences: Are future lives
valued less?" Journal of Risk and Uncertainty 26(1): 39-53.
O’Donoghue, T. and M. Rabin (1999). "Doing it now or doing it later." American
Economic Review 89(1): 103-124.
Ariely, D. and Wertenbroch, K.(2002) “Procrastination, Deadlines, and Performance:
Self-Control by Precommitment,” Psychological Science, 13: 219-224;
Tinghog, G. (2011). "Discounting, Preferences, and Paternalism in Cost-Effectiveness
Analysis." Health Care Anal. 20(3):297-318
Behavioral Game theory
Camerer, C.: "Behavioral Game Theory", Chapter 1, Introduction; Appendix
1.1, Basic Game Theory; see the link:
http://dss.ucsd.edu/~vcrawfor/Camerer_Ch1intro.pdf
Risk Preferences
Kahneman, D. (2003). "Maps of bounded rationality: Psychology for behavioral
economics." American Economic Review 93(5): 1449-1475.
Camerer, C. (1998): "Prospect Theory in the Wild: Evidence From the Field:, Working
Papers 1037, California Institute of Technology, Division of Humanities and
Social Sciences; see the
Linköping University
Spring 2014
link: http://www.uibk.ac.at/economics/bbl/lit_se/lit_se_ss06_papiere/camerer_(
1998).pdf
Emotions and decision making
Added later
Mental Accounting
Thaler, R. H. (1999): "Mental Accounting Matters" Journal of Behavioral Decision
Making, 12, pp. 183-206,
Odean, T. (1998). "Are investors reluctant to realize their losses?" Journal of Finance
53(5): 1775-1798.
Applications of Behavioral Economics
Added later