Behavioral economics

Course title
Behavioral economics
Course tag
Course status
Independent work
Teachers and associates
Darija Korkut, Senior Lecturer
Msc Ratka Jurković, Lecturer
Msc Nataša Trojak, Senior Lecturer
The course aims
The aim of the course is to explain difference between the concepts of traditional and behavioral economics, and to give insight in how behavioral economics explains human behavior through the lenses of irrationalities and constraints that human brain is faced with. Students will learn the basic concepts of behavioral economics, such as motivation, cognition, perception, emotions, personality, etc. The course will also provide an insight into decision-making and choice processes in different economic contexts, the influence of behavioral economics on organizational behavior, on neuroeconomics, and on the relationship and impact of public and state institutions and decisions on individual's behavior and decisions. Students will also gain knowledge on recent research and insights in the area of behavioral economics, which will enable them to independently develop additional knowledge in this rapidly developing field.
Introduction and basic concepts of behavioral economics, decision-making and prospect theory, bounded rationality, heuristics and biases, organizational behavior, neuroeconomics, public policies, recent research and insights in behavioral economics.
Just, D.R. (2013): Introduction to Behavioral Economics, Wiley
Supplementary literature
1. Camerer, Colin F. (2003): Advances In Behavioral Economics, Princeton University Press.
2. Camerer, C., Loewenstein, G. and Prelec, D. (March 2005.): Neuroeconomics: How Neuroscience Can Inform Economics, Journal of Economic Literature, Vol. XLIII , pp. 9–64
3. Kahneman, D. (2013): Thinking, Fast and Slow
4. Ariely, D. (2010): Predictably Irrational
5. Kahneman, D. and Tversky, A. (1979): Prospect Theory: An Analysis of Decision under Risk. Econometrica, Vol. 47, No. 2., pp. 263-292.
6. Kahneman, D. (2003): Maps of Bounded Rationality: Psychology for Behavioral Economic, The American Economic Review, Vol. 93, No. 5, pp. 1449-1475.

Minimum learning outcomes

  1. Identify the areas behavioral economics deals with and its development.
  2. Interpret basic concepts of behavioral economics.
  3. Evaluate elements on which decision-making and prospect theory are based.
  4. Explain reasons why people behave in certai ways adn the basics of neuroeconomics.
  5. Assess the impact of insights of behavioral economics to organizations and organizational behavior.
  6. Assess ways in which public policies can influence decision-making and behavior.
  7. Evaluate recent research and insights in the area of behavioral economics.

Preferred learning outcomes

  1. Interpret the foundations of behavioral economics and the areas of its application.
  2. Interpret the influence of basic concepts of behavioral economics on human behavior.
  3. Critically discuss how the basic concepts of behavioral economics influence decision-making process and the choice of an individual.
  4. Assess reasons of individual's behavior in economic context.
  5. Evaluate organizational decisions in the context of behavioral economics.
  6. Explain the influence of public policies on individual's decision-making and behavior.
  7. Critically assess recent research in the area of behavioral economics.