Not available in 2023/24
MG452 Half Unit
Behavioural Economics for Management
This information is for the 2023/24 session.
Teacher responsible
Dr Kristof Madarasz MAR 6.10
Availability
This course is available on the CEMS Exchange, Global MSc in Management, Global MSc in Management (CEMS MIM), Global MSc in Management (MBA Exchange), MBA Exchange, MSc in Economics and Management and MSc in Management and Strategy. This course is available with permission as an outside option to students on other programmes where regulations permit.
Pre-requisites
Graduate level Microeconomics, Game Theory or Managerial Economics, Graduate level Econometrics or Quantitative Analysis is required.
Course content
The course covers formal (mathematical) models of behavioural economics and discusses both experimental and field evidence that motivate and test various aspects of these models.
This course is a post-graduate introduction to behavioural economics and strategy. The topics to be discussed are
1. Risk Perceptions, Loss Aversion and Reference-Dependence.
2. Procrastination, Self Control and Choice over Time.
3. Social Motivation: Image, Reciprocity and Inequity.
4. Processing Information and Mistakes in Cognition.
5. Naivite and Heuristics in Strategic Thinking.
6. Happiness and Welfare.
Teaching
20 hours of lectures in the WT. 2 hours of lectures in the ST.
Students on this course will have a reading week in Week 6, in line with departmental policy.
Formative coursework
A mock exam comprising of problem sets.
Indicative reading
CamererCamerer, Colin, Linda Babcock, George Loewenstein, and Richard Thaler (1997) "Labor Supply of New York City Cabdrivers: One Day at a Time," Quarterly Journal of Economics
Fehr Ernst and Simon Gachter (2002) Fairness and Retaliation: The Economics of Reciprocity Journal of Economic Perspectives, 2000 (14); 159-181.
Kahneman, Daniel, and Amos Tversky (1979) "Prospect Theory: An Analysis of Decision under Risk" Econometrica, 47(2): 263-292.
Koszegi, B. and Matthew Rabin (2006) Reference-Dependent Preferences. Quarterly Journal of Economics
Laibson, David. (1997) Golden Eggs and Hyperbolic Discounting. Quarterly Journal of Economics
List, John A. 2004. "Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace," Econometrica, 72(2): 615-625.
Madarasz, Kristof (2012) Information Projection: Model and Applications. Review of Economic Studies
Thaler, Richard and Shlomo Benartzi (2004). Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving, Journal of Political Economy.
Rabin, Matthew (2002) Inference by the Believers in the Law of Small Numbers. Quarterly Journal of Economics
Stortz, Richard. (1955) Myopia and Inconsistency in Dynamic Utility Maximization. Review of Economic Studies
Assessment
Exam (100%, duration: 2 hours) in the spring exam period.
Key facts
Department: Management
Total students 2022/23: Unavailable
Average class size 2022/23: Unavailable
Controlled access 2022/23: No
Value: Half Unit
Course selection videos
Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.
Personal development skills
- Team working
- Problem solving
- Application of information skills
- Communication
- Application of numeracy skills