Behavioral Economics: a Critical Introduction

What guides human decisions in a context of risk and uncertainty? Behavioral economics suggests that the human mind is subject (importantly, predictably so) to a number of biases and systematic errors which can be traced to simplifying shortcuts of intuitive thinking (heuristics) and the very machinery of cognition. Though the field enjoys growing recognition and is praised for its integration of psychological research into economic science, no real unified theory of behavior has emerged. Further, to the extent that behavioral economics interprets findings as departures from idealized economic models, it presupposes a specific (some might argue narrow) view of rationality. Other conceptualizations of what it means to be rational can enrich our understanding of how human beings make decisions in the face of time and informational constraints. Perhaps heuristics in judgment aren’t so irrational after all. Cognitive biases and even mechanisms of self-deception may have their own evolutionary purpose. How should we understand our own behaviour and decisions?

In this course, drawing from research in microeconomics, psychology and neuroscience, we’ll strive to understand how humans make decisions and assess situations of risk and uncertainty. What does behavioral economics contribute to our understanding of economic decisions? Reviewing pioneering work and key findings on mental biases, as well as Kahneman’s two-system model of thinking “fast” and “slow”, we’ll assess the field’s relevance. Turning to the issue of what might be missed, we’ll survey alternative approaches to rational decisions and the human mind, such as Gigerenzer’s work on heuristics, and consider topics such as gut feelings and hidden motives. Throughout the course, we will ask what it means to act and decide rationally. Is rationality a straightforward evaluation of cost and gain, or is our very assessment of utility dependent on factors that don’t easily answer to instrumental reason?

Course Schedule

Wednesday, 6:30-9:30pm
July 11 — August 01, 2018
4 weeks

$315.00

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