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IKT 455 - Behavioral Economics

Faculty of Business and Management Sciences · Business Administration (English 30%) · Undergraduate

ECTS: 5 T+P+L: 3+0+0 University Elective
Coordinator: Dr. Öğr. Üyesi Merve Büşra ALTUNDERE DOĞAN

Course Objective

This course provides an introduction to behavioral economics. It aims to familiarize students with the principles and the methods of behavioral economics. In this course, we will study how behavioral economists uses a range of psychological and social phenomena to explain the economic behavior and how these explanations differ from the standard economic models.

Course Content

Behavioral economics analyzes the ways in which “irrationality” influences the preferences, beliefs, judgements and decisions of people. This course will cover the topics such as overconfidence, loss aversion, procrastination, gambling, addiction, over-eating, framing and persuasion. We will discuss these economic behaviors in reference to the standard economic theory.

Required Resources

  • Angner, Erik (2016). A Course in Behavioral Economics, 2nd Ed. London: Palgrave Macmillan.

Recommended Resources

  • Ariely, Dan (2010). Predictably Irrational. Harper Perennial.
  • Thaler, Richard H. and Sunstein, Cass R. (2008). Nudge: Improving Decisions about Health, Wealth, and Happiness. London: Penguin Books.
  • Thaler, Richard H. (2016). Misbehaving: The Making of Behavioral Economics. W. W. Norton & Company.
  • Kahneman, Daniel (2013). Thinking, Fast and Slow. 1st Ed. NY: Farrar, Straus and Giroux.

Explanations

Attendance is considered an essential aspect of this course. The material covered in lectures will be a subject of evaluation, and while some topics are available in the textbook, others are exclusive to the lectures. Hence, students are strongly recommended to attend all class meetings regularly and on time. Your punctuality is not only expected but also appreciated.

Rules

This course has a zero-tolerance policy for cheating and plagiarism. Students found engaging in such behavior will face severe consequences, including course failure and disciplinary actions. Cheating involves deceit, fraud, or dishonesty, especially during examinations, while plagiarism is the misrepresentation of someone else’s work as your own.

Course Learning Outcomes

  1. Students will learn introductory behavioral economics.
  2. Students will be able to analyze the ways in which “irrationality” influences the decisions of people
  3. Students will be able to explain the principles and methods of behavioral economics.
  4. Students will be able to understand how behavioral economics deviate from the standard economic models.
  5. Students will be able to incorporate psychologically and socially motivated assumptions into the economic models.

Core Area Distribution

(22) Humanities%20 (31) Social and Behavioural Science%50 (34) Business and Administration%30

Teaching Methods

ExpressionQuestion-AnswerDiscussionGroup StudySelf studyProject Based Learning (Including Field Work)

Assessment & Evaluation

Performance Assignment ( Lab / Workshop / Field Work / Seminar / Presentation / Completion Study / ThesisTesting (Essay / Tests: True-Falls, multiple-choice, short answer, matching)

ECTS / Workload

ActivityQuantityDuration (h)Total Workload
Course Duration (Including Exam Week)14342
Out of Class Study Period14228
Midterm11515
Quiz000
Assignment000
Practice11515
Final12525

Course Schedule

WeekSubjectPreparation
1Introduction to Behavioral EconomicsAngner (2016) Chapter-1
2Rational Choice under Certainty (Rational Preferences, Utility)Angner (2016) Chapter-2
3Decision-Making under Certainty (Opportunity Costs)Angner (2016) Chapter-3
4Decision-Making under Certainty (Sunk Costs, Menu Dependence)Angner (2016) Chapter-3
5Decision-Making under Certainty (Loss Aversion, Anchoring and Adjustment)Angner (2016) Chapter-3
6Probability Judgement (Probability Theory, Bayesian Updating)Angner (2016) Chapter-4
7Judgement under Risk and Uncertainty (Gambler’s Fallacy, Conjunction and Disjunction Fallacy)Angner (2016) Chapter-5
8Midterm ExamStudy for Exam
9Judgement under Risk and Uncertainty (Base-Rate Neglect)Angner (2016) Chapter-5
10Judgement under Risk and Uncertainty (Confirmation Bias, Availability, Overconfidence)Angner (2016) Chapter-5
11Rational Choice under Risk and Uncertainty (Expected Utility, Attitudes towards Risk)Angner (2016) Chapter-6
12Decision-Making under Risk and Uncertainty (Framing Effects, Bundling and Mental Accounting)Angner (2016) Chapter-7
13Decision-Making under Risk and Uncertainty (Allais Problem, Ellsberg Problem)Angner (2016) Chapter-7
14Decision-Making under Risk and Uncertainty (Probability Weighting)Angner (2016) Chapter-7
15Group Project PresentationsStudy for Project
16Final ExamStudy for Exam