Behavioural Economics

Volledige vakbeschrijving

The traditional model of the homo economicus is ubiquitous in microeconomic theory. Economic agents are assumed to be rational utility maximisers with self-regarding preferences and unlimited processing capacities. Common sense and the results of economic experiments show that this is not always the case. Often people behave differently than predicted by theory. In this course, we will deal with the following problem statements:
1) When does microeconomic theory apply and when does it lose its predictive power?
2) If it does not apply, what concepts and models can be use to either extend or to substitute the current theory in order to describe human behaviour?

Specifically, we will discuss the following issues:
· Non-expected utility theory
· Intertemporal choice
· Social preferences
· Reciprocity
· Levels of analytical reasoning
· The role of mistakes

In addition, we will touch on the following topics:
· Mental accounting
· Heuristics
· Neuroeconomics