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Behavioral Economics - JEB147

Title:	Behavioral Economics
Czech title:	Behavioral Economics
Guaranteed by:	Institute of Economic Studies (23-IES)
Faculty:	Faculty of Social Sciences
Actual:	from 2024
Semester:	winter
E-Credits:	5
Examination process:	winter s.:written
Hours per week, examination:	winter s.:2/0, Ex [HT]
Capacity:	185 / unknown (unknown)
Min. number of students:	unlimited
4EU+:	no
Virtual mobility / capacity:	no
State of the course:	taught
Language:	English
Teaching methods:	full-time
Note:	course can be enrolled in outside the study plan enabled for web enrollment priority enrollment if the course is part of the study plan

Guarantor:	doc. PhDr. Julie Chytilová, Ph.D. prof. PhDr. Michal Bauer, Ph.D.
Teacher(s):	prof. PhDr. Michal Bauer, Ph.D. doc. PhDr. Julie Chytilová, Ph.D. Mgr. Iñaki Alberto Veruete Villegas
Class:	Courses for incoming students
Pre-requisite :	JEB104

Examination dates WS schedule Noticeboard

Annotation -

This course introduces the key concepts in behavioral economics, a modern and quickly emerging field that integrates insights from psychology into economics.
We will focus on the following topics: social preferences and fairness, time discounting and limited self-control, the role of misperceptions, discrimination and group identity, behavioral public policy. After introducing the concepts, the classes will be largely based on discussion of individual papers.

Last update: Chytilová Julie, doc. PhDr., Ph.D. (15.09.2023)

Course completion requirements -

A grade from this course will be based on a written final test, which will take place at the end of the course.

Grading: A = 90.1-100; B = 80.1-90; C = 70.1-80; D = 60.1-70; E = 50.1-60; F = 0-50.

For more details about the final exam, including sample questions, please see a separate document uploaded in SIS.

Last update: Chytilová Julie, doc. PhDr., Ph.D. (24.08.2023)

Literature -

Fehr, Ernst and Klaus Schmidt. "A Theory of Fairness, Competition, and Cooperation." Quarterly Journal of Economics, 1999, 114(3), pp. 817-868.

Charness, Gary and Matthew Rabin. "Understanding Social Preferences with Simple Tests." Quarterly Journal of Economics, 2002, 117(3), pp. 817-869.

Gneezy, U., and J. A List. 2006. "Putting behavioral economics to work: Testing for gift exchange in labor markets using field experiments." Econometrica 1365–1384.

Gneezy, U., and A. Rustichini. 2000. "A Fine is a Price." The Journal of Legal Studies 29:1–17.

Falk, A. 2007. "Gift exchange in the field." Econometrica 75:1501–1511.

Kube, S., M. A Maréchal, and C. Puppe. 2006. "Putting Reciprocity to Work—Positive versusNegative Responses in the Field." University of St. Gallen Department of Economics working paper series.

Kube, S., M. A Maréchal, and C. Puppe. 2011. "The currency of reciprocity—Gift-exchange in the workplace." American Economic Review, 102(2012), 1644-1662.

Ingvild Almås et al., "Fairness and the Development of Inequality Acceptance," Science 328, no. 5982 (May 28, 2010): 1176 -1178.

Ariely, D., and K. Wertenbroch. 2002. "Procrastination, deadlines, and performance: Self-control by precommitment." Psychological Science 219–224.

Augenblick, N., Niederle, M., & Sprenger, C. (2015). Working over time: Dynamic Inconsistency in real effort tasks. Quarterly Journal of Economics, forthcoming. doi:10.1016/j.jfluchem.2010.02.012

Thaler, R. H, and S. Benartzi. 2004. "Save More Tomorrow: using behavioral economics to increase employee saving." Journal of Political Economy 112:164–187.

Ashraf, N., D. Karlan, and W. Yin. 2006. "Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines." Quarterly Journal of Economics 121:635–672.

Duflo, E., M. Kremer, and J. Robinson. 2009. "Nudging Farmers to Utilize Fertilizer: Theory and Experimental Evidence from Kenya." CEPR Discussion Papers.

Haushofer, J., & Shapiro, J. (2013). Household Response to Income Changes: Evidence from an Unconditional Cash Transfer Program in Kenya. Working paper

A. Mani, S. Mullainathan, E. Shafir, J. Zhao, Poverty impedes cognitive function. Science 341(6149), 976-980 (2013).

Haushofer, J., & Fehr, E. (2014). On the psychology of poverty. Science (New York, N.Y.), 344(6186), 862–7. doi:10.1126/science.1232491Bartos,

V., Bauer, M., Chytilova, J. and Levely, I. (2018): Effects of poverty on impatience: Preferences or inattention. CEPR working paper.

Last update: Bednařík Petr, PhDr., Ph.D. (15.06.2020)

Requirements to the exam -

A grade from this course will be based on a written final test, which will take place at the end of the course.

Grading: A = 90.1-100; B = 80.1-90; C = 70.1-80; D = 60.1-70; E = 50.1-60; F = 0-50.

There will be four dates for the final exam.

• December 20, 2024, 11:30am-12:50pm in room 206 (capacity limited to 59 students due to room size)

• January 31, 2025, 9:30-10:50am in room 109

• February 7, 2025, 9:30-10:50am in room 109

• February 14, 2025, 9:30-10:50am in room 109

For more details about the final exam, including sample questions, please see a separate document uploaded in SIS.

Last update: Chytilová Julie, doc. PhDr., Ph.D. (12.09.2024)

Syllabus

For the list of readings for each topic please see the attached pdf document with the syllabus

TOPIC 1: INTRODUCTION (Michal Bauer)

What is the definition of behavioral economics?
How does behavioral economics differ from experimental economics?
Overview of topics and requirements of this course

TOPIC 2: SOCIAL PREFERENCES (Michal Bauer)

Models of social preferences: altruism, inequality aversion, reciprocity, concern about social efficiency
Evidence of trust and reciprocity in the laboratory
Applications

How can social preferences help to explain unemployment?
Reciprocity on the labor market: Can employers motivate employees to exert more effort by giving them higher wages? Do wage cuts reduce effort?
Reciprocity in charitable giving: Can NGOs mobilize donations by distributing gifts?
Reciprocity in day care centers: Can introducing “market” crowd out fairness motives?

TOPIC 3: FORMATION OF SOCIAL PREFERENCES (Michal Bauer)

Are social preferences exogenous or shaped during childhood?
How do social preferences develop with age during childhood and adolescence?
Does parental background and social environment matter?

TOPIC 4: TIME DISCOUNTING AND LIMITED SELF-CONTROL (Michal Bauer)

Present-biased preferences and naivite: introducing the concepts
Are people present-biased?
Demand for commitment

Do people procrastinate? Can deadlines help?
Do people demand commitment when they want to save?
Do people demand commitment at work and does it help increase effort?

TOPIC5: BEHAVIORAL ECONOMICS OF POVERTY (Michal Bauer)

“Behavioral poverty trap” – why poverty may affect economic decision-making via psychological channels?
Does poverty reduce cognitive skills, productivity and increase time preference?

TOPIC 6 (if time allows): MISPERCEPTIONS AND INFORMATION (Michal Bauer)

Do people have accurate beliefs about important facts or views of others?
Do inaccurate beliefs (misperceptions) shape important life decisions?
Can inaccurate beliefs by corrected by providing facts?
How misperceptions affect schooling choices, health behavior and labor market participation?

TOPIC 7: DECISION-MAKING IN GROUPS AND GROUP IDENTITY (Julie Chytilová)

Are there differences in decision-making of individuals and of groups? Are groups more rational? Are groups less pro-social?
How can group identity influence economic outcomes?
How can we measure the effects of group identity on behavior?

TOPIC 8: DISCRIMINATION (Julie Chytilová)

What are the standard economic explanations of discrimination?
How can we measure existence of discrimination? Lab experiments, audit studies, correspondence experiments.
Do we also discriminate sub-consciously?
What are the consequences of discrimination?
What affects discrimination?

TOPIC 9: BEHAVIORAL PUBLIC POLICY (Julie Chytilová)

How can the findings from behavioral economics be applied in public policies? Choice architecture, nudges and defaults.
Examples – how to nudge people to save money and to save energy?
How to balance freedom of choice and government interventions? Libertarian paternalism.

Last update: Chytilová Julie, doc. PhDr., Ph.D. (15.09.2023)

Entry requirements -

Pre-requisite

JEB104 – Microeconomics I

Last update: Chytilová Julie, doc. PhDr., Ph.D. (09.09.2018)