SAM17 Economics and Psychology
The course will introduce students to the exciting world of Economics and Psychology - also know as Behavioral Economics. Traditional economic models have assumed that people are perfectly rational and seek to maximize their own payoffs. This course studies the economic consequences of acknowledging that people have bounded rationality and often are motivated by moral and social considerations.
The course will also introduce students to the scientific method of experiments. We will discuss different types of experiments, and the pros and cons of experimentation. Students will also get the chance to design and implement their own economic experiment. This will be done in groups of 3-4 students, and a written report based on the experiment will count towards the final grade.
Some of the topics the course will cover are:
- Reference dependence and loss aversion
- Choice over time and present bias
- Social preferences
- Trust and cooperation
- How emotions affect choice
After successful completion of the course, the student will:
- Have an overview of different decision theories.
- Be able to discuss the limitations of the standard economic model.
- Have knowledge of the use of experimental methods in economic research.
- Understand the connection between economic incentives and other sources of motivation.
- Be able to show how social preferences and bounded rationality can shed light on important economic questions and phenomenon.
- Be able to formulate an independent research hypothesis that can be experimentally tested.
- Be able to design and execute an experiment according to standard practice in behavioral economics.
- Be able to make well-founded business judgments based on a richer understanding of human behavior.
- Have experience in planning and executing a group assignment that extends over a long period of time, and in accordance with ethical guidelines.
- Practice written and oral presentation of academic content in a research format.
- Training in reading and understanding articles from peer-reviewed journals.
The lectures will be given by the course responsible, as well as guest appearances from faculty at FAIR - Centre for Experimental Research on Fairness, Inequality and Rationality.
An introductory course in microeconomics (equivalent to SAM1 or SAM2 at NHH).
Requirements for course approval
No requirements for course approval.
1. Written school exam, 3 hours (50%)
2. Term paper - a written report based on an economic experiment conducted in groups of 3-4 students (50%). Deadline for term paper is late October, and it is distributed 4 weeks prior to the deadline.
The exam and term paper can be answered in Norwegian or English.
The Grade transcript will report three grades for the course: i) School exam, ii) Term paper, and iii) The course grade, which is a combination of i) and ii) with equal weights.
Students are expected to report the results from their experiments based on outputs from statistical tests. These tests can be executed in Excel, but also in STATA, R or any other software for statistical analysis.
- About 10 scientific articles.
- Lecture notes.
- Course compendium.
- ECTS Credits
- Teaching language
Autumn. Offered autumn 2020.
Please note: Due to the present corona situation, please expect parts of this course description to be changed before the autumn semester starts. Particularly, but not exclusively, this relates to teaching methods, mandatory requirements and assessment.
Associate Professor Mathias Ekström, Department of Economics