Predictably Irrational: the Psychology and Economics of Decision Making (BBA20884)

Datos generales

Tipo:	OP	Curso:	3	Periodo:	S semestre
Créditos ECTS:	4 ECTS

Profesorado:

Grupo	Profesor	Departamento	Idioma
	Uri Simonsohn	Operaciones, Innovación y Data Sciences	ENG

To prepare for each class students will be given a few chapters and or articles to read.
There will be short quiz every class (10-15 min)
There probably will be a competition to propose an nudge based intervention.
There is a traditional test at the end of the semester.
The format of class will be lecture combined with general discussion and in-class exercises and experiments.

Making decisions, from the trivial to the fundamental, is part of the everyday life of every manager, investor and consumer. For the last 30 years psychologists -and more recently also economists- have studied how people process information and actually make decisions (rather than how they would make them if they were fully rational and selfish). This research program has provided an insightful understanding of how people's decisions deviate from "optimal? ones, and the consequences of such biases in financial and personal terms. This course is devoted to understanding the nature, causes and implications of these limitations.

The objective of this course is to improve the ability of students to motivate desired behaviors on others, be it consumers, employees or people outside a business relationship altogether. This is accomplished by expanding the limited toolbox that the assumption of rational behavior provides (financial incentives and information) with tools arrived at from insights from psychology and behavioral economics.

1. Topics to be covered 1) Decision process vs outcome 2) Constructed preferences, defaults and elicitation mode effects 3) Choice set effects 4) Loss aversion and mental accounting 5) Risk aversion 6) Impatience 7) Generous preferences 8) Intuition, emotion, and rationality 9) Nudging (helping others decide what they would like to decide) 10) Motivated reasoning

Selected chapters from the following books:
Kahneman, Daniel. Thinking, fast and slow. Macmillan, 2011.
Thaler Richard, H., and R. Sunstein Cass. "Nudge: Improving decisions about health, wealth, and happiness." (2008).
Ariely, Dan. Predictably irrational. New York: HarperCollins, 2008.
Gilovich, Thomas. How we know what isn't so. Simon and Schuster, 2008.
Thaler, Richard H. Misbehaving: The making of behavioral economics. WW Norton & Company, 2015.

Grupo	Profesor	Departamento
	Uri Simonsohn	Operaciones, Innovación y Data Sciences