Dr Kristof Madarasz MAR 6.10

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).

Advanced Microeconomics, Game Theory or Managerial Economics, Advanced Econometrics or Quantitative Analysis is required.

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 and Risk Attitudes.
2. Intertemporal Choice.
3. Social Motivation.
4. Processing Information and Mistakes in Cognition.
5. Projective Strategic Thinking.
6. Well-being and Mental Health.

30 hours of seminars in the AT.

Students on this course will have a reading week in Week 6, in line with departmental policy.

A mock exam comprising of problem sets.

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

Exam (100%, duration: 2 hours) in the spring exam period.