Behavioral and Experimental Economics
Content
Lecturer: Dr. Juliane Hennecke
This course introduces students to Behavioral and Experimental Economics, combining economic theory with insights from psychology to better understand individual decision-making. It covers key behavioral concepts such as heuristics and biases, loss aversion and prospect theory, time inconsistency as well as social preferences and reciprocity, and examines how these challenge and extend the standard rational choice model. A central focus is on experimental methods, including laboratory and field experiments, to identify causal effects and test economic theories. Students learn to critically assess experimental evidence and its relevance for policy and real-world applications, replicate existing papers using the statistical software STATA as well as to design and run an own experiment and statistically test the resulting data.
Goals of this module
Students . . .
. . . understand and can critically assess the contribution of experimental studies.
. . . know to what extent neoclassical economic theories hold in experimental settings.
. . . know how to model preferences and utility to incorporate specific behavior that cannot be captured by the neoclassical model.
. . . can explain and apply important concepts and models from the field of behavioral economics.
. . . can describe the experimental approach to economics.
... know how to design and run a simple experiment.
... get a basic understanding of the use of STATA your statistical testing based on experimental data.
... know how to read and interpret research articles from experimental economics.
Content of the Course
1) Behavioral Economics
- 1.1) Heuristics and Biases
- 1.2) Risk & Prospect Theory
- 1.3) Time Inconsistency & Hyperbolic Discounting
- 1.4) Behavioral Policy
2) Behavioral Game Theory
- 2.1) Social Preferences
- 2.2) Reciprocity & Trust
3) Experimental Economics
- 3.1) Experimental Design (Tutorial: Designing and running an own experiment)
- 3.2) Treatment Testing (Tutorial: Basic introduction into STATA and testing of own experiment)
- 3.3) Applications of Experimental & Behavioral Economics (Tutorial: Paper Replication using STATA)
Language: English
Timeframe: Weekly lecture + weekly exercise/tutorial
Assessment: Exam (100%)