Psychology and Economics
Introduces the theoretical and empirical literature of behavioral economics. Examines important and systematic departures from the standard models in economics by incorporating insights from psychology and other social sciences. Covers theory and evidence on time, risk, and social preferences; beliefs and learning; emotions; limited attention; and frames, defaults, and nudges. Studies applications to many different areas, such as credit card debt, procrastination, retirement savings, addiction, portfolio choice, poverty, labor supply, happiness, and government policy. Students participate in surveys and experiments in class, review evidence from lab experiments, examine how the results can be integrated into models, and test models using field and lab data. Students taking graduate version complete additional assignments.
Spring 2020
Psychology and Economics (aka Behavioral Economics) is a growing subfield of economics that incorporates insights from psychology and other social sciences into economics. This course covers recent advances in behavioral economics by reviewing some of the assumptions made in mainstream economic models, and by discussing how human behavior systematically departs from these assumptions. Applications will cover a wide range of fields, including labor and public economics, industrial organization, health economics, finance, and development economics.
Readings
- Gold and Hester (1987): The Gambler’s Fallacy and the Coin’s Memory." Unpublished manuscript. Carnegie Mellon University.
Prerequisites & course information
Subject meets with 14.13 Prereq: 14.01 G (Spring) 4-0-8 units
Sources
- Course catalogue ↗2026–2027
- MIT OpenCourseWare ↗Spring 2020
- MIT OCW readings ↗
- MIT OCW syllabus ↗
- Historical MIT OpenCourseWare offering. Named reading entries and schedule topics are automatically extracted from the linked source pages.