Behavioural Economics II - Business & Policy Applications (BSMP003)

This module information is representative of what is included in the module in a given year. Details of actual reading, lectures and coursework may vary year to year and will be available at the beginning of the semester.

 

Module Co-ordinator

Dr Leonhard Lades

Semester

Spring

Level

11

Credit value

20

Contact hours

Teaching will consist of 11 x 2 hour lectures and a series of 9 x 2 hour seminars.  Seminars will be used to develop the main piece of coursework which will be a behaviourally informed proposal targeting a key policy or business issue.

Assessment

Assessment will consist of an examination (60% of course grade), a policy/business intervention proposal (20% of course grade), and an essay requiring the critical evaluation and integration of a set of academic papers on policy/business applications of behavioural science (20% of course grade).

The module aims to provide a clear outline of the ways in which behavioural assumptions are central to public policy as well as important aspects of finance and business. The general purpose of this course is to generate an understanding of how behavioural principles can be used to inform the creation of successful policies in government and business. To do this, we will specify the ways in which behavioural assumptions must be made in policy and business domains and then outline how behavioural science can inform these assumptions.

 

Module Objectives

The course will provide a detailed overview of the rapidly growing literature outlining the psychological levers of behaviour change and how behavioural insights can inform the design of the decision context across numerous domains including: (i) business, (ii) finance, (iii) law, (iv) the environment, (v) health, (vi) education, (vii) employment, and (viii) well-being. We will draw from applied research examining the impact of: (i) social norms in policy formation and political expression, (ii)  behavioural science in the justice system, (ii) behavioural factors in savings and financial decisions and in the employer-employee relationship, (iv) the psychological levers of behaviour change particularly in the area of health, and  (v) a rapidly growing literature outlining how behavioural insights can inform the design of the decision context across numerous domain. Students will be introduced to taxonomies of behavioural principles. These will form a ‘behavioural toolkit’ that can be applied to policy formation and business decisions in many ways. Students will produce a behaviourally-based intervention plan to affect an important area of choice/behaviour in either a policy or business area. They will outline a rationale for this intervention, the methodology that could be used to introduce it, and form an evaluation plan.

 

Learning Outcomes

On completion of this module students are expected to have achieved the following four main Learning Outcomes (LO):

LO1: Students will obtain a thorough knowledge and understanding of applications of behavioural insights in public policy and business. In particular, they will be able to answer the following questions.

  • Which behavioural factors necessitate public policies and which behavioural factors are/can be utilised by businesses (e.g. limited willpower, procrastination, bounded rationality, biases in probability weighting, social and fairness norms)?
  • How can theory in behavioural science and behavioural economic inform the design and evaluation of business and policy strategy with a particular focus on the decision context and the choice architecture? How are the predictions made from such theory distinct from and complementary to traditional economic theory?
  • How and why are behaviour change interventions structured in taxonomies? How can this collective research effort assist in producing an evidence-base for matching policies/business goals, interventions and target behaviours to produce effective solutions?
  • What are the goals of public policy from a behavioural perspective (e.g. the role of human welfare and how it is assessed)?
  • What do the core aspects of public policy entail (e.g. regulation, laws to the prioritization of funding, and the production of interventions)?
  • How can behavioural science be applied to key questions across a range of core policy domains including health promotion, regulation, education and employment, and environmental protection?
  • How are behavioural science researchers involved in the empirical estimation of policy and business effects and in the understanding and shaping of the theoretical principles that inform both business and policy?

LO2: Students will be able to evaluate the policy relevance of academic journal articles.

LO3: Students will be able to apply behavioural insights in an innovative way to a policy/business area. They will be able to identify, describe, and outline a behaviourally-informed solution to an important business or policy challenge.

LO4: Students will improve their ability to present and critically discuss academic papers. 

Introductory reading

The core textbooks for this module are:

  1. Shafir, E. (2013). The Behavioral Foundations of Public Policy. Princeton, NJ: Princeton University Press.
  2. Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. Yale University Press.

 

 

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