(Picture of Paul Blow)
University of Copenhagen, Fall 2019
Prof. Marco Piovesan
Over the last 30 years, behavioral scientists have gained a deeper understanding of what motivates people, how they process information, and what non-economic features of the choice environment influence decisions. Many of their insights challenge traditional assumptions such as rationality, self-interest, time consistency. This research program (sometimes called “Behavioral Economics” or “Psychology and Economics”) has shed light on how people’s decisions deviate from “optimal” choices as well as the consequences of such deviations. But, how we can use this knowledge? How can we get people to save more money, have a better education, work harder, save energy, engage in healthy behaviors, and more generally make better choices? This course allows you to develop a hands-on approach by learning and applying the methods of behavioral economics to public policy. We will review research on human decision making from psychology, political science, organizational behavior and economics and we will look for easy‐to‐implement solutions. At the end of this course, you will be able to identify human biases and creatively design behavioral interventions, policies or products that help people make better decisions.
After completing the course, you should be able to:
|Knowledge:||• Review the most recent developments and theories of human decision-making both from Economics and Psychology.|
|• Analyze the tools of behavioral science and compare their effectiveness to change specific behaviors.|
|Skills:||• Reflect on how experiments and randomized controlled trials work and why this methodology is critical for making inference about causal relationships.|
|• Debate and discuss critically several interventions that have been conducted to change people’s behavior in the domain of energy efficiency, health and well-being, dishonesty, charitable giving, education and work performance.|
|Competencies:||• Examine (real-world) cases where people make decisions that are inconsistent with the assumptions of rational decision making and they will identify the consequences of this irrational behavior for the society.|
|• Design experiments and develop policy intervention aiming at ameliorate societal well-being and improve people’s life.|
1) Since the course requires that you read several scientific papers you need to have some knowledge of Microeconomics and Econometrics.
2) It is recommended that you followed or are following Micro III and Behavioral and Experimental Economics.
3) You should have a sound knowledge of Behavioral and Experimental Economics.
The final exam (three questions) covers the content of the entire course (2 hours, closed book, written exam at computers). The language of examination is English.
Exam: 17 December 2019
Re-exam: 6 February 2020
Both the requirements below must be fulfilled by the student to be able to sit the exam:
1: During the course each student is assigned to a specific group. In the group the student has to work on all the activities given by the teacher.
2: During each lecture, in class, the student has to answer and submit one (or more) assignment questions covering the reading material. The student must have 75% of the mandatory assignments approved to be able to sit the exam.
The course consists of 21 lectures of 2 hours in room CSS 35-3-12.
In odd weeks (37, 39, 41, 43, 45, 47, 49), we meet both on Wednesday (15.15-17.00) and on Friday (13:15-15.00). In even weeks (36, 38, 40, 44, 46, 48, 50) we meet only on Wednesday (15.15-17.00). Note that in week 42 there will not be class because of the Fall Break.
Teaching and learning methods:
The course is divided in two parts:
- In Part 1 “Principles and Methods” (from week 36 to week 41) I will introduce the topic and present the relevant literature for the course.
- In Part 2 “Applications” (from week 43 to week 49) we will discuss and analyze a different topic in each lecture. In Part 2, for each lecture, we will have a group of students (5-10 students) in charge to read the papers assigned and prepare a presentation. Moreover, these students are in charge to actively engage other students in the learning/discussion process.
Last lecture (week 50) is dedicated to exam preparation.
Slides will be posted briefly after each lecture. These slides summarize some (selected) papers and address some issues discussed in class. Note that my slides are designed to guide the discussion during the lecture and thus, they cannot be used to prepare the exam.
I believe firmly in Active Learning. Therefore, I expect you to do most of your learning through the readings and assignments, both on your own and in cooperation with your classmates. I do not intend to cover all important topics in lecture. Rather, my job in this course is to guide the learning by choosing readings and exercises for you, and to coach you through this learning process in a way that maximizes understanding. Your attendance and participation is a requirement since in this course an active discussion in class is essential for an effective peer learning. For this reason, you have to read all the assigned papers before each lecture and do homework and group activities in preparation of (and during) each lecture.
Do you want to know more about my teaching philosophy? Click here.
To foster cooperative learning and an in-depth study, for the entire course you have to be active members of one of the ten groups. Each group will “specialize” on a different topic. Within the first week of the course, you have to choose one of the following ten topics:
2. Health and well-being
5. Work Performance
|6. Charitable giving
7. Saving and Financial Decisions
9. Poverty and Scarcity
Each group will consist of approximately 4-6 students seated together.
In Part 1 of the course you have to collaborate closely, do some homework and prepare short presentations together with your group.
In Part 2, you and your group have to:
- Prepare an oral presentation (45 minutes) of the papers assigned .
- Design and conduct an interactive activity (for 20 minutes) aiming at engaging other students in the learning/discussion process.
|1||36||Sept. 4||15-17||CSS 35-3-12||Introduction|
|2||37||Sept. 11||15-17||CSS 35-3-12||Behavior: Mistakes and Biases|
|3||37||Sept. 13||13-15||CSS 35-3-12||Behavior: Intertemporal choices, time inconsistency and willpower|
|4||38||Sept. 18||15-17||CSS 35-3-12||Tools: Regulation, incentives and information|
|5||39||Sept. 25||15-17||CSS 35-3-12||Tools: Behavioral Insights|
|6||39||Sept. 27||13-15||CSS 35-3-12||Tools: Group presentations|
|7||40||Oct. 2||15-17||CSS 35-3-12||Evaluation: Experiments|
|8||41||Oct. 9||15-17||CSS 35-3-12||Evaluation: Quasi-Experimental Methods|
|9||41||Oct. 11||13-15||CSS 35-3-12||Evaluation: Group presentations|
In week 42 you ahave to prepare “the challenge”. More info during the course.
|10||43||Oct. 23||15-17||CSS 7.0.34||The Challenge|
|11||43||Oct. 25||13-15||CSS 35-3-12||Environment
|12||44||Oct. 30||15-17||CSS 35-3-12||Health and well-being
Rabin healthy habits
|13||45||Nov. 6||15-17||CSS 35-3-12||Dishonesty
|14||45||Nov. 8||13-15||CSS 35-3-12||Education
Does Simple Information Provision Lead to More Diverse Classrooms?
|15||46||Nov. 13||15-17||CSS 35-3-12||Work Performance
|16||47||Nov. 20||15-17||CSS 35-3-12||Charitable giving
|17||47||Nov. 22||13-15||CSS 35-3-12||Saving and Financial Decisions
|18||48||Nov. 27||15-17||CSS 35-3-12||Voting
|19||49||Dec. 4||15-17||CSS 35-3-12||Poverty and Scarcity
|20||49||Dec. 6||13-15||CSS 35-3-12||Discrimination|
|21||50||Dec. 11||15-17||CSS 35-3-12||Exam preparation|
Reading list and material:
Note: Students at the University of Copenhagen have access to many electronic journals. Just click on this link and search for the title you are looking for.
- An interesting talk of Prof. Raj Chetty on how behavioral economics can be used in public policy, you can watch this talk.
- Johnson, E. J., & Goldstein, D. G. (2003). Do defaults save lives? Science, 302, 1338-1339. DOI: https://doi.org/10.1126/science.1091721
- Milkman, K. L., Beshears, J., Choi, J. J., Laibson, D., & Madrian, B. C. (2011). Using implementation intentions prompts to enhance influenza vaccination rates. Proceedings of the National Academy of Sciences, 108(26), 10415-10420. DOI: https://doi.org/10.1073/pnas.1103170108
- Kling, J. R., Congdon, W. J., & Mullainathan, S. (2011). Policy and choice: public finance through the lens of behavioral economics. Brookings Institution Press. Only Chapter 2 (“Psychology and Economics”, pp. 17-39). Book available here: https://www.brookings.edu/wp-content/uploads/2016/07/policyandchoice_book.pdf
- For an overview of “biases” in decision making you can use this app or this infographic.
- Chabris, C. F., Laibson, D. I., & Schuldt, J. P. (2008). Intertemporal choice. The new Palgrave dictionary of economics, 2nd edition. DOI: https://doi.org/10.1057/978-1-349-95121-5_1987-1
- Duckworth, A. L., Milkman, K. L., & Laibson, D. (2018). Beyond willpower: Strategies for reducing failures of self-control. Psychological Science in the Public Interest, 19(3), 102-129. DOI: https://doi.org/10.1177/1529100618821893
- Madrian, B. C. (2014). Applying Insights from Behavioral Economics to Policy Design. Annual Review of Economics, 6(1), 663-688. DOI: https://doi.org/10.1146/annurev-economics-080213-041033
- Richburg-Hayes, L., Anzelone, C., Dechausay, N., Saugato, D., Fiorillo, A., Potok, L., Darling, M. & Balz, J. (2014). Behavioral Economics and Social Policy: Designing Innovative Solutions for Programs Supported by the Administration for Children and Families. OPRE Report No. 2014-16a. Available here: http://www.mdrc.org/sites/default/files/bias_final_full_report_rev4_15_14.pdf
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