ECON 340 Behavioral Economics

This course will provide an introduction to the relatively new field of Behavioral Economics. Standard models of economic theory provide a useful, but not always realistic, way to characterize how individuals make decisions. In this course, we will investigate the evidence showing how people may behave in ways that are not predicted by this standard theory. Individuals may exhibit nonstandard preferences, nonstandard beliefs, or nonstandard decision-making. We will look at each of these in turn, with applications that may include saving, finance, labor supply, gift-giving, voting, and addiction. The methodology of the course will not itself deviate from the standard way of doing economics; we will state clear assumptions, build models, determine their logical conclusions, and think about how to empirically test both the assumptions and implications of such models.