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2017/18 Undergraduate Module Catalogue

LUBS3375 Behavioural Economics

10 creditsClass Size: 90

Module manager: Gabriel Burdin

Taught: Semester 1 View Timetable

Year running 2017/18


LUBS2140Intermediate Microeconomics

This module is not approved as a discovery module

Module summary

This module aims to provide an introduction to core developments in Behavioural Economics. The module introduces analytical tools to understand an ample repertoire of human behaviours which remain unexplained by the basic neoclassical paradigm and situations in which that paradigm fails to provide accurate predictions. Abstract concepts and models will be illustrated by examples and laboratory experiments, and applied to a wide range of settings, particularly to labour markets and organisational analysis.


This module aims to:
- Provide an introduction to behavioural economics, which integrates insights from psychology and economics
- Provide an introduction to the use of experiments in economics

Learning outcomes
On completion of this module, students will be able to:
- Assess the importance of psychological realism in economic analysis and policymaking
- Interpret evidence based on economic experiments, its implications, merits and limits
- Apply concepts drawn from behavioural economics to concrete social and economic problems


Indicative content:
1. What is Behavioural Economics (BE)?
1.1 BE and neoclassical economics
1.2 BE in the History of Economic Thought
1.3 BE and experimental economics

2. Decisions under risk and uncertainty
2.1 The standard expected utility model
2.2 Evidence/anomalies
2.3 Prospect theory
2.4 Applications

3. Intertemporal choice
3.1 The standard discounted utility model
3.2 Evidence/anomalies
3.3 Sign/Magnitude effects
3.4 Time-inconsistent preferences: hyperbolic discounting
3.5 Applications

4. Judgment
4.1 Probability judgment: statistical sampling/Bayesian updating
4.2 Evidence/anomalies
4.3 Judgment heuristics and bias
4.4 Anchoring effects/confirmation bias
4.5 Applications

5. Fairness/other-regarding preferences
5.1 Distinguishing rationality and selfishness
5.2 Evidence: Dictator/Ultimatum/Trust/Public Good Games
5.3 Neuro-economics and social preferences
5.4 Models: reciprocity, inequality aversion
5.5 Economic incentives and social preferences: crowding in/out effects
5.6 Applications

6. Emotions and economic behaviour
6.1 Visceral influences
6.2 Projection bias
6.3 Emotions and risky decisions
6.4 Emotions and intertemporal choices
6.5 Emotions and social preferences

Teaching methods

Delivery typeNumberLength hoursStudent hours
Class tests, exams and assessment12.002.00
Private study hours82.00
Total Contact hours18.00
Total hours (100hr per 10 credits)100.00

Private study

Private study will be supported by providing appropriate materials (problem sets, case-studies, applications) and opportunities for formative feedback, particularly during seminars and through scheduled course contact hours.

Opportunities for Formative Feedback

Students will make oral presentations in groups and solve problem sets during the course. This will provide extensive opportunities for formative feedback, particularly during seminars and through scheduled course contact hours.

Methods of assessment

Exam typeExam duration% of formal assessment
Standard exam (closed essays, MCQs etc) (S1)2 hr 00 mins100.00
Total percentage (Assessment Exams)100.00

Resit will be 100% by exam.

Reading list

There is no reading list for this module

Last updated: 01/12/2017


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