| Course Unit Code | 114-0539/01 |
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| Number of ECTS Credits Allocated | 5 ECTS credits |
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| Type of Course Unit * | Choice-compulsory |
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| Level of Course Unit * | Second Cycle |
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| Year of Study * | |
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| Semester when the Course Unit is delivered | Summer Semester |
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| Mode of Delivery | Face-to-face |
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| Language of Instruction | English |
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| Prerequisites and Co-Requisites | Course succeeds to compulsory courses of previous semester |
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| Name of Lecturer(s) | Personal ID | Name |
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| HLA31 | Ing. Karel Hlaváček, Ph.D. |
| MEL044 | doc. Ing. Aleš Melecký, Ph.D. |
| Summary |
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| 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 |
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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.
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| Course Contents |
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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
13) Altruism, reciprocity and peer effect
14) Practical applications of behavioral economics |
| Recommended or Required Reading |
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| Required Reading: |
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BADDELEY, Michelle. Behavioural Economics: A Very Short Introduction. Oxford: Oxford University Press, 2017. 144 s. ISBN 9780198754992.
O'SULLIVAN, Arthur. Behavioral Economics. Oxford: Oxford University Press, 2022. 472 s. ISBN 978-0197515921.
THALER, Richard B. a Cass R. SUNSTEIN. Nudge: The Final Edition. New York: Penguin Books, 2021. 384 s. ISBN 978-0143137009. |
BADDELEY, Michelle. Behavioural Economics: A Very Short Introduction. Oxford: Oxford University Press, 2017. 144 s. ISBN 9780198754992.
O'SULLIVAN, Arthur. Behavioral Economics. Oxford: Oxford University Press, 2022. 472 s. ISBN 978-0197515921.
THALER, Richard B. a Cass R. SUNSTEIN. Nudge: The Final Edition. New York: Penguin Books, 2021. 384 s. ISBN 978-0143137009. |
| Recommended Reading: |
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ARIELY Dan a Jeff KREISLER. Dollars and Sense. New York: Harper Collins, 2018. 288 s. ISBN 978-0062651211.
TALEB, Nassim N. Skin in the Game: Hidden Asymmetries in Daily Life. New York: Random House, 2020. 304 s. ISBN 978-0425284643.
WILKINSON, Nick a Matthias KLAES. An Introduction to Behavioral Economics. 3rd ed. New York: Bloomsbury, 2017. ISBN 978-1137524126. |
ARIELY Dan a Jeff KREISLER. Dollars and Sense. New York: Harper Collins, 2018. 288 s. ISBN 978-0062651211.
TALEB, Nassim N. Skin in the Game: Hidden Asymmetries in Daily Life. New York: Random House, 2020. 304 s. ISBN 978-0425284643.
WILKINSON, Nick a Matthias KLAES. An Introduction to Behavioral Economics. 3rd ed. New York: Bloomsbury, 2017. ISBN 978-1137524126. |
| Planned learning activities and teaching methods |
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| Lectures, Seminars |
| Assesment methods and criteria |
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| Tasks are not Defined |