Psychology and Economics (Behavioral Economics)

"Economics" often scares people away. After all, it's full of incomprehensible equations and patagonia-wearing, nespresso-drinking, stimulant-consuming hedgefund analysts. It also makes some pretty bold assumptions about rational decision-making.

"Behavioral Economics" on the other hand, is much less scary. It incorporates insights from psychology and other social sciences (woo! no math!) into economics (ok maybe a little math). The broad goal of these efforts is to make economic models more realistic, more interesting, and in turn increase their predictive power and reach.

In this class we'll take a brief dive into what happens when psychologists challenge some of the assumptions that economists make, and how the close collaboration that resulted in the field of Behavioral Economics has changed our understanding of the world, and its humans, a little better.

I will attempt to present findings from a broad range of domains so that everyone leaves knowing just enough to sound marginally more informed during Facebook arguments. These topics may include:

• Beliefs and learning (overconfident CEOs, convertibles in New England, and gambling addictions)

• Time preferences (self-control, Odysseus, and gym memberships)

• Social preferences (fairness, loneliness, and giving to the poor)

• Gender, discrimination, and identity (identity priming and stereotype threat)

• Frames, defaults, and nudges (Why are so many Scandinavians organ donors?)

• Happiness (utility maximization and tradeoffs between time and money)

• The rise and consumption of Fake News (and equally dangerous Real News)

• Poverty (how does financial strain affect decision-making and overall wellbeing?)

• Status signaling (What do vegans, luxury wines, and fake Gucci handbags have in common?)