LFU:online

Department of Economic Theory, Policy and History Department of Economic Theory, Policy and History

Ass.-Prof. Felix Holzmeister, PhD Ass.-Prof. Felix Holzmeister, PhD, +43 512 507 71040

432073

PS Behavioural and Experimental Economics

PS 2

4,5

weekly

each semester

English

Behavioral economics combines results from experiments and insights from psychology in order to study how people make decisions. This course will introduces some of the major issues, methods and models currently debated in this field.

Behavioral economics is a diverse subject, focusing on situations where observed behavior systematically deviates from standard theoretical models and what this implies for both positive and normative economics. The content of this course includes areas related to decisions made over risk, time and the income of others. Topics include: Subjective well-being: the Easterlin paradox, relationship between decision and experienced utility. Choice under certainty: reference dependence, endowment effect, menu dependence, mental accounting. Expected Utility Theory (EUT): failures of EUT, probability weighting, loss aversion, prospect theory, preference reversal. Other regarding preferences: positional goods, distributional preferences, warm glow, reciprocity. Time preferences: exponential and hyperbolic discounting, present bias and quasi-hyperbolic discounting, diversification bias, intra-personal conflict.

Lectures and excercises

The course will be completed with a written exam

09.10.2015