Behavioral Economics (LLS 127)
Meets Tuesdays, 7 – 9:30 p.m.
March 17 – May 5, 2015
Kohlberg Hall, Room 226
Standard economic theory assumes we are all perfectly rational and use all the information we have available to make decisions that maximize our well-being. But we all know people (perhaps including ourselves) who behave in ways that violate this assumption. People spend money they've promised to save for retirement, hold on to stocks they know they should sell, or keep smoking despite committing to quit. These are not random mistakes. They reflect systematic problems in our ability to understand complex situations, to make good decisions today about the future, and to separate factual information from our emotional responses.
Behavioral economics, in contrast, provides models that allow us to understand why we make mistakes about what will really be in our own best interest. From these models we can extract strategies that will help us—as individuals and collectively—to make critical decisions that are consistent with our true goals and preferences. This course is aimed at anyone interested in human behavior and will provide all necessary background in economics.
- Behavioral economics vs. standard economic analysis
- Financial mistakes
- Health mistakes
- Using behavioral economics to change behavior
- Behavioral economics and public policy
Ellen Magenheim, Professor of Economics. She teaches Health Economics, Intermediate Microeconomics, and Industrial Organization. Her scholarly work is focused on the application of behavioral economics to shaping improvements in health and financial behavior.