Skip to main content
Skip header

ECTS Course Overview



Behavioral Economics

* Exchange students do not have to consider this information when selecting suitable courses for an exchange stay.

Course Unit Code114-0539/01
Number of ECTS Credits Allocated5 ECTS credits
Type of Course Unit *Choice-compulsory
Level of Course Unit *Second Cycle
Year of Study *
Semester when the Course Unit is deliveredSummer Semester
Mode of DeliveryFace-to-face
Language of InstructionEnglish
Prerequisites and Co-Requisites Course succeeds to compulsory courses of previous semester
Name of Lecturer(s)Personal IDName
HLA31Ing. Karel Hlaváček, Ph.D.
MEL044doc. Ing. Aleš Melecký, Ph.D.
SUL080Ing. Monika Šulganová, Ph.D.
Summary
Economic theory perceives in its models a human as a rational individual maximizing its utility. Such an individual is only considered to be the optimal theoretical concept, and the actual behavior of a person may sometimes appear to be seemingly irrational. In this course, we abandon the assumptions of traditional models and focus on both, consumer behavioral theory and business theory, but also on investment theory and finance from a behavioral perspective. The experimental economics overcome the barrier of pure rationality and selfishness, and along with behavioral economics it allows economists to observe human behavior.
Learning Outcomes of the Course Unit
Characterize the nature of behavioral economics and explain the basic concepts in this field.
Describe the differences between classical and behavioral economics and criticism of rational decision making.
Introduce basic behavioral heuristics and their practical applications.
Introduce the penetration of behavioral economics into other areas such as behavioral finance and marketing.
Course Contents
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
Recommended or Required Reading
Required Reading:
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.
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.
Recommended Reading:
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.
BADDELEY, Michelle. Behavioural Economics: A Very Short Introduction. Oxford: Oxford University Press, 2017. ISBN-13: 9780198754992.
KAHNEMAN, Daniel. Myšlení rychlé a pomalé. Brno: Jan Melvil publishing, 2012. ISBN 9788087270424.
KAHNEMAN, Daniel. Thinking, fast and slow. New York: Farrar, Straus and Giroux, 2013. ISBN 9780374533557.
SKOŘEPA. Michal. Decision Making: A Behavioral Economic Approach. Houndmills, Basingstoke: Palgrave Macmillan, 2010. ISBN 978-0230248250.
Planned learning activities and teaching methods
Lectures, Seminars
Assesment methods and criteria
Tasks are not Defined