BEHAVIOURAL ECONOMICS - 2022/3

Module Overview

This module introduces students to the field of behavioural economics which incorporates psychological evidence into economics. The standard approach in economics explains market outcomes and economic decision-making using theoretical models which usually assume that people are fully rational. Behavioural economics, on the other hand, seeks to increase the explanatory power of traditional models by considering a number of real life decision making situations where some standard rationality assumptions on preferences do not hold. This module builds mainly on the individual decision making models taught in microeconomics and financial economics modules in year 1 and year 2, identifies departures from these classical models, and use them as an inspiration to create alternative theories of decision making.

Module provider

Economics

Module Leader

BOZBAY Irem (Economics)

Number of Credits: 15

ECTS Credits: 7.5

Framework: FHEQ Level 6

Module cap (Maximum number of students): N/A

Module Availability

Semester 1

Prerequisites / Co-requisites

None

Module content

Indicative content includes rationality, decision making under risk and uncertainty, heuristics and biases in risk judgments, prospect theory, intertemporal decision making and other-regarding preferences.

Assessment pattern

Alternative Assessment

N/A

Assessment Strategy

The assessment strategy is designed to provide students with the opportunity to demonstrate

• Knowledge of the main empirical and experimental findings in behavioural economics via two midterms. The midterms are based on the the theory and key papers studied in the main module content ensuring that students are assessed on the full content of the module.


• Ability to apply the knowledge of core concepts from behavioural economics to novel decision making problems via an examination. The exam is designed to allow students to be apply their technical skills creatively to novel decision making problems

Thus, the summative assessment for this module consists of:

2 midterm tests (worth 25% of the final grade in total)
A final exam (worth 75% of the final grade)

Formative assessment and Feedback

Students receive verbal feedback during lectures (in which questions related to real-world examples in economics are both attempted and discussed). Students are provided with fortnightly-tasks relating to the material which they work on independently or in groups and can then post these works on the discussion forum where they receive feedback. These are also discussed in lectures. Students can also attend the module leader’s regular weekly office hours, or meet by appointment. Feedback on assessments will be given during lectures and students will be provided feedback documents which summarise commonly made mistakes in the assessments. For the midterms and the exam, sample questions are made available for students as well as model answers so that they can familiarise themselves with the setup. Students are also encouraged to post, and to answer others’, questions on the module webpage discussion board. The module leader also uses the discussion board to answer students’ questions.

Module aims

• To provide a broad overview of important results from behavioural economics.
• To combine and compare standard topics in economics (such as expected utility theory, rationality of preferences) with observed psychological regularities and formalise departures from the assumptions made in standard models by examining empirical and experimental evidence.
• To develop an understanding of how people make decisions.

Learning outcomes

Methods of Teaching / Learning

The learning and teaching strategy is designed to ensure that students achieve the module’s learning outcomes:

Lectures are designed to enhance ability to identify and examine empirical and experimental evidence of departure from the assumptions made in the standard  economic models; and help students understand how these departures can be formalised theoretically and be tested empirically.

Weekly guided learning activities include (but are not limited to) self-tests, case studies, problem sets, and surveys that link students’ own decision making processes to behavioural models. These activities are designed to enhance skills in applying mathematical methods to behavioural economics and to practical individual decision making in general, as well as to encourage independent research.

The learning and teaching methods include: 2-hour lecture per week x 11 weeks. 

Indicated Lecture Hours (which may also include seminars, tutorials, workshops and other contact time) are approximate and may include in-class tests where one or more of these are an assessment on the module. In-class tests are scheduled/organised separately to taught content and will be published on to student personal timetables, where they apply to taken modules, as soon as they are finalised by central administration. This will usually be after the initial publication of the teaching timetable for the relevant semester.

Reading list

https://readinglists.surrey.ac.uk
Upon accessing the reading list, please search for the module using the module code: ECO3052

Other information

Surrey's Curriculum Framework is committed to developing graduates with strengths in Employability, Digital Capabilities, Global and Cultural Capabilities, Sustainability and Resourcefulness and Resilience. This module is designed to allow students to develop knowledge, skills, and capabilities in the following areas: 

Behavioural models taught in this module are used in variety of settings such as individual consumption decisions, investment decisions, firm pricing and policy making. By enhancing reasoning about decision making in such settings, and encouraging independent thinking to apply and expand on the taught content, the module contributes to employability, and resourcefulness and resilience. Via formative assessments, the module encourages students to work in digital teams and participate in online networks (such as discussion forums) contributing to digital capabilities.

Programmes this module appears in

Please note that the information detailed within this record is accurate at the time of publishing and may be subject to change. This record contains information for the most up to date version of the programme / module for the 2022/3 academic year.