Do you ever wonder how, with so many clothing options, none of your clothes fit perfectly?
Do you find that everyone (else) is a hypocrite?
Does playing “hard to get” work in the dating sphere?
This course introduces students to the field of behavioral economics, which seeks to insert more behavioral realism into economic theory and applications. Typically we try to accomplish this by making non-standard assumptions about human preferences, but occasionally our approach will be to explore non-standard beliefs or emphasize the limitations of our decision making faculties. Topics covered include, but are not restricted to, prospect theory, mental accounting, other-regarding preferences, ambiguity and risk preferences and hyperbolic discounting. We will typically approach a topic by examining evidence of some departure from the assumptions made in the canonical economic model. We explore how such departures can be formalized theoretically and how the resulting models have been tested empirically. The course requires, at a minimum, principles of microeconomics, although a student would benefit from having completed intermediate microeconomic theory as well as previous experience analyzing data.