Not available in 2024/25
MG452 Half Unit
Behavioural Economics for Management
This information is for the 2024/25 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.
This course may be capped/subject to controlled access. For further information about the course's availability, please see the MG Elective Course Selection Moodle page (https://moodle.lse.ac.uk/course/view.php?id=3840).
Pre-requisites
Advanced Microeconomics, Game Theory or Managerial Economics, Advanced 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:
- Risk Perceptions and Risk Attitudes.
- Intertemporal Choice.
- Social Motivation.
- Processing Information and Mistakes in Cognition.
- Projective Strategic Thinking.
- Well-being and Mental Health.
Teaching
30 hours of seminars in the AT.
Students on this course will have a reading week in Week 6, in line with departmental policy.
In its Ethics Code, LSE upholds a commitment to intellectual freedom. This means we will protect the freedom of expression of our students and staff and the right to engage in healthy debate in the classroom.
Formative coursework
A mock exam comprising of problem sets.
Indicative reading
Camerer, 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 2023/24: Unavailable
Average class size 2023/24: Unavailable
Controlled access 2023/24: 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