Behavioral Economics and Public Policy

Catalog description

This course introduces students to the field of Behavioral Economics - the subfield of economics that uses economic tools coupled with insights from psychology to better understand human behavior. The goal is not to replace traditional economics but to improve and expand upon it. Standard economic theory assumes that individuals are fully rational decision-makers. So we often analyze how consumers maximize their utility subject to budget constraints and how producers maximize their profits to production functions. However, this is often not the case in the real world. Behavioral economics uses findings from various lab and feel experiments to advance existing economic models by identifying ways in which individuals are systematically irrational. This course identifies ways in which these findings have been used to advance public policies in education, health, energy, taxation, and more.