23005 Behavioural Economics6cp
Requisite(s): 23567 Intermediate Microeconomics AND 23592 Game Theory
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.
The field of psychology and economics – or behavioural economics – takes the methodology of economic theory beyond the standard assumptions of rationality and self-interest. The goal is to develop models that more accurately describe and predict economic phenomena. The guiding principle is to select modelling assumptions on the basis of psychological realism rather than mathematical or normative convenience. This subject is an introduction to the field. The goals of the subject are to explore more thoroughly the assumptions, implications, and failures of several fundamental standard economic models, to develop alternative, behavioural models based on findings from psychology, and to explore the implications of the new models. The subject develops a better understanding of standard economic theory, a richer appreciation for the way that economists think, and an interesting set of insights about the ways that human psychology affects economic decision-making.
Detailed subject description.