| Description |
481518-FS2025-0-Behavioral Economics
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The neoclassical model constitutes the dominating paradigm within economics. One may say rightly so, as the model does a (surprisingly) good job at making qualitative predictions in a broad range of settings. And yet, quite often (and even predictably so) it fails to properly predict and explain human behavior. The field of behavioral economics addresses these systematic shortcomings of the neoclassical model, by “injecting good psychology and other social sciences”, as Nobel Laureate Richard Thaler puts it.
In this course, we will cover several of the key models which have emerged in the past 40 years or so and are increasingly pervasive within mainstream economics. In doing so, we will reflect on where the “standard model” falls short and where behavioral economics allows us to make better predictions. We will (aim to) cover the following topics:
1) Foundations
2) Intertemporal preferences
3) Reference-dependent preferences
4) Preferences over uncertainty
5) Social preferences
In each topic, we will roughly follow the following structure: (A) identify anomalies, that is, evidence which is at odds with the standard model; (B) introduce behavioral theory and discuss it; (C) where appropriate, we will also highlight welfare implications of market and policy responses to “behavioral agents”.
The course emphasizes economic models, but will also cover experiments and empirical evidence when evaluating the behavioral models relative to the standard model. In particular, we plan to run in-class experiments which will be conducted by students taking the parallel seminar “Seminar in Experimental Economics”. It is possible to take both lecture and seminar at the same time but be aware of the limited number of seats in the seminar.
The course will closely follow the book “Behavioral Economics: Evidence, Theory, and Welfare” by Brandon Lehr.
lecture: Tuesday, 09.15 - 11.00 hrs, 106, H4
Exercise with Severin Wildhaber (severin.wildhaber@unibe.ch)
Thursdays, 08.15 - 10.00hrs (bi-weekly), 106, H4
1.Exam: Tuesday, 26 May, 2026, 09.15-10.45 hrs, 106, H4
2. Exam: Tuesday, 08. September 2026, 09.15 - 10.45 hrs, tba |
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