312208 Microeconomics 3: Behavioral Economics (V) (WiSe 2016/2017)

In the course, we will study how behavioral economists explain a range of psychological and social phenomena, and how those explanations differ from the ones provided by standard economic literature. In particular, we will study various ways in which cognitive limitations influence decision-making and strategic interactions.
The tentative course outline is as follows:

1 Introduction
2 Decision under certainty
Basic Consumer Theory
Violations (Binary Cycles, Context Dependence, Framing)
Reference Dependent Models
3 Decision under uncertainty
Expected Utility Theory
Prospect Theory
4 Intertemporal Choice
Exponential Discounting
Quasi-Hyperbolic Discounting
5 Behavioral Game Theory
Other-regarding Preferences
Dominance Solvable Games
Mixed Strategy Equilibrium

Requirements for participation, required level

Students are expected to be familiar with standard materials in microeconomics and game theory.

Bibliography

1. A Course in Behavioral Economics, by Erik Angner (Palgrave Macmillan, 2016).
2. An Introduction to Behavioral Economics, by Wilkonson and Klaes (Palgrave Macmillan, 2012).
3. Behavioral Game Theory: Experiments in Strategic Interaction, by Colin F. Camerer (Princeton University Press, 2003).