• Herz Holger

• Rodriguez Tom

This course covers key topics in Behavioral Economics. We start with an overview of common heuristics and biases in human behavior. Next, we explore reference-dependent preferences, such as how a silver medalist in an elimination tournament might feel less satisfied than a bronze medalist because their reference point was winning gold, while the bronze medalist’s goal was simply to make it onto the podium.
We then examine time preferences, illustrated by the tendency of people to buy gym memberships they rarely use, believing they’ll start exercising tomorrow but repeating the same procrastination each day.
The course also covers social preferences, challenging standard economic theories by exploring why people engage in pro-social behaviors, like donating blood, and how these other-regarding preferences can be modeled.
Finally, we discuss motivated beliefs, which is the notion that beliefs can hold intrinsic value similar to goods. An example is the finding that around 80% of drivers believe they are in the top 50%, suggesting that people derive satisfaction from believing they are skilled in certain areas, such as driving.
The course will be split in lectures as well as exercises to rehearse and practice the course content. 

The goal of the course is to introduce students to some of the key applications of behavioral economics. This involves both formal modeling of behavioral assumptions and the empirical assessment and identification of behavioral biases. As a consequence, the course is suited both for students interested in theoretical and in empirical work. 

This course will be relatively formal and requires knowledge of microeconomics at least at the level of microeconomics 1 and 2 at the Bachelor level. Prior attendance of the Master course “advanced microeconomics” is highly recommended.

Link Moodle 

Link VVZ

The course will be based on selected book chapters and papers

Exam duration: 90 minutes

Exam duration: 90 minutes