Aims

The primary aim of the module is to introduce students to the basic foundations of behavioural economics and experimental methods in the context of so-called “behavioural anomalies” that stand in contrast to the predictions of standard economic theory with respect to individual behaviour. Students will gain experience of economic decision-making experiments as an analytical technique.

Outline Of Syllabus

In the past twenty years there has been a revolution in economics with the study not of how people would behave if they were perfectly rational, but of how they actually behave – and this has thrown up a number of so-called apparently persistent “behavioral anomalies” that stand in contrast to the predictions of conventional economic theory. In this module we will illustrate how experimental methods have been and can be utilized to explore a number of such anomalies and assess their robustness
The module will be based around the following topics.
1.Introduction to behavioural economics
2.Experiment methods. Techniques.
3.Experimental methods. Applications
4.Field experiments
5.Prospect theory
6.Mental accounting
7.Preference reversal.
8.Ambiguity aversion (Ellsberg Paradox)
9.Allais Paradox
10.Social preferences (Dictator game and/or Ultimatum game).
11.Market Experiments
12.Rationality spill-over
13.Time inconsistent preferences
14.Charitable giving, altruism and warm glow
15. Nudge

Each topic will be supported, either singularly or in combination, by:
i.Experiments - experiments sourced from the literature. Students will participate in the experiments and will analyse the data
ii. Seminars will be based around academic journal papers from the experimental literature. Students will participate by identifying the key hypotheses, describe the design and discuss the results.
iii.Lectures: will place the student tasks into their wider context by drawing on other evidence in the literature, thus providing a broader perspective to the topic and will, where relevant, assess the implications for conventional theory.

Teaching Rationale And Relationship

i.       Experiments – Intended Knowledge Outcome 2, Intended Skills Outcomes 1,2,3.
iii.       Lectures – Intended Knowledge Outcomes 1,2, Intended Skills Outcomes 4
iv.       Small group teaching Intended Knowledge Outcome 2, Intended Skills Outcomes 2,3

Assessment Rationale And Relationship

The unseen examination at the end of the module is designed to encourage study and to test student understanding of the fundamental theoretical and empirical evidence with respect to economic behavioural anomalies. As such, the written exam will provide evidence of the depth as well as breadth of understanding of concepts and methods taught in semester 1 and 2.

The report provides the student with the opportunity to demonstrate effective in-depth, written communication of the experimental process and its outputs.

Alternative assessment if we should move online due to public health changes:

In the case of an alternative assessment for semester 2 (70% of the module mark) being necessary due to circumstances, the Module Leader will in discussion with the DPD and the University, discuss possible acceptable online alternatives, such as a take home exam delivered online with a set time limit to complete (24 hours or less as deemed appropriate).

Report - would not be affected.