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Terminated in academic year 2020/2021

Behavioral Economics

Type of study Follow-up Master
Language of instruction Czech
Code 114-0439/02
Abbreviation BE
Course title Behavioral Economics
Credits 5
Coordinating department Department of Economics
Course coordinator doc. Ing. Aleš Melecký, Ph.D.

Subject syllabus

1) Introduction to Behavioural Economics
• Antecedents of behavioural economics
• Methodology of economics
• Theoretical approaches in behavioural economics
• Experimental method in economics
• Examples of behavioural evidence
2) Behavioural Decision under Risk and Uncertainty
• Classical decision theory
• Subjective expected utility theory
• Violations of expected utility theory
3) Behavioural Models of Decision Making
• Rank dependent utility theory
• Prospect theory
• Human behaviour for extreme probability events
• Risk preferences and time preferences
4) Applications of Behavioural Decision Theory
• Endowment effect and exchange asymmetries
• Myopic loss aversion
• Goals and contracts as reference points
• Moral hazard, loss aversion, and optimal contracts
5) Present Bias and Time-inconsistency
• Evidence on temporal human choice
• Behavioural models of time discounting
• Applications of present-biased preferences
6) Behavioural Game Theory
• Evidence of strategic human choice
• Models of behavioural game theory
7) Behavioural models of learning
• Evolutionary game theory
• Models of learning
• Stochastic social dynamics
8) Emotions
• Emotions of human behaviour
• Interactions between emotions and cognition
9) Bounded Rationality
• Judgment heuristics
• The law of small numbers
• Conjunction fallacy
• The availability heuristics
10) Behavioural Finance
• Neoclassical theory of capital markets and its limitations
• Behavioural perspective on investors` behaviour
• Speculative bubbles as a characteristics of market anomalies
11) Social Preferences and Labour Economics
• Evidence on social behaviour
• Models of fairness and reciprocity
• Applications in labour economics
12) Economics of information
• Moral hazard and incentive contracts
• Adverse selection and signaling
• Economics and psychology

Literature

DHAMI, Sanjit S. The foundations of behavioral economic analysis. Oxford: Oxford University Press, 2017. ISBN 9780198715535 .
WILKINSON, Nick. An introduction to behavioral economics: A Guide for Students. New York: Palgrave Macmillan, 2007. ISBN 9780230532595 .
THALER, Richard B. Misbehaving: The Making of Behavioral Economics. W. W. Norton, 2016. ISBN 9780393352795.

Advised literature

BADDELEY, Michelle. Behavioural Economics: A Very Short Introduction. Oxford: Oxford University Press, 2017. ISBN-13: 9780198754992 .
SKOŘEPA. Michal. Decision Making: A Behavioral Economic Approach. Houndmills, Basingstoke: Palgrave Macmillan, 2010. ISBN 978-0230248250 .
KAHNEMAN, Daniel. Thinking, fast and slow. New York: Farrar, Straus and Giroux, 2013. ISBN 9780374533557.