BUS456 Behavioral Business Strategy
The course will contain two main parts. The first part introduces core theories and concepts of behavioral economics of the firm and customer. The second part will focus on applications of behavioral economics using cases and guest lectures from business, illustrating how modern businesses can utilize insights of behavioral theories.
A non-exhaustive list of topics include:
- Choice architecture, status-quo and default effects
- Loss aversion, Prospect theory, mental accounting and framing effects
- Heuristics and biases in consumer and managerial decision-making
- Time preferences
- Performance measures, incentives and motivation
- Decision making under uncertainty
- Financial decision making, contract design and bargaining
- Frontiers of behavioral insights. Interaction of behavioral insights with new technologies (e.g. mobile apps and big data possibilities)
Knowledge - upon completion of the course the student will
- Have knowledge of the main theories and insights of behavioral economics that are relevant in a business environment.
- Have knowledge about different experimental techniques firms can use to test and improve the way they do business.
Skills - upon completion of the course the student will
- Be able to identify areas of business where insights from behavioral economics are likely to play an important role.
- Be able to apply insights from behavioral economics to business practices.
- Be able to reflect upon and critically discuss the application of principles from behavioral economics in the business context.
General competence -upon completion of the course the student will
- Improve their ability to write a paper report in a structured and efficient manner.
Regular lectures including in-class experiments.
Guest lectures by practitioners of Behavioral Economics in leading companies such as DNB and Spotify.
The course is equally suited for students with prior experience in behavioral economics who seek a better understanding of how to apply their knowledge in a business context, as well as for students without prior experience of behavioral economics who are interested in an application-based and business-oriented introduction to the topic.
No special prerequisites.
Requirements for course approval
Half way into the course (after the core part), a 2-hour test will be held (within the normal lecture hours). In this test, there will be questions aiming at testing whether students master the main theories and concepts taught in the course thus far. No books/articles are allowed during the test. Those who pass and get course approval will then be allowed to hand in the group-based term paper.
Group based term paper. Groups should consist of maximum 3 to 4 students.
The term paper will be released after the last guest lecture in October and students have about 10 days to hand in the paper.
The term paper should be written in English.
We will occasionally use MobLab for in-class experiments.
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The students will also be provided with selected articles on canvas. We will use articles from the literature in behavioral economics from world-leading journals - such as Nature and Management Science - as well as business-oriented articles, e.g., from the Harvard Business Review and the Journal of Marketing.
- ECTS Credits
- Teaching language
Autumn. Offered autumn 2019.
Associate Professor Lars Ivar O. Berge, Department of Accounting, Auditing, and Law and Associate Professor Mathias Ekström, Department of Economics, NHH.