Professor: William Harbaugh
- CRN 26539: Monday & Wednesday, 1615-1745 @ REMOTE
This course is an introduction to three recent developments in how the field of economics models people’s decisions and the interaction of those individual decisions to produce economic outcomes in society. Behavioral Economics consists of a variety of alternatives to the standard economic "rational choice" model of behavior. For example, behavioral economists have developed “hyperbolic discounting” models of choice over time, and argue that these are better predictors of such things as wealth accumulation and addiction than the standard discounting model. Another example would be fairness - people want to be nice to people who are nice to them, and mean to people who are mean. Behavioral models that incorporate these preferences lead to some interesting predictions about how society works. Experimental Economics is a methodology – instead of testing theories using the sort of happenstance data that most empirical economists use, experimentalists get their data from experiments under controlled conditions. We will use experiments - including ones conducted in class with you as participants - to test behavioral theories. Neuroeconomics adds methods from neuroscience, such as fMRI brain scanning, to further test these models. The course will be based on readings from recent research.