Behavioral Economics: Nudging to Shape Decisions

Explain the influence of intertemporal components in the choices we make and realize how they can lead to non-standard behavior (such as obesity, addiction, and credit card overuse and dependence).

Formulate mathematical models that explain phenomena like procrastination and overindulgence.

Visualize examples of how self-control problems can lead to poor decision-making—As soon as you turn eighteen you are much more likely to be tried as an adult, and yet we do not see people stop committing crimes as soon as they turn eighteen. Why is this?

Learn how to apply this knowledge in a way that modifies behavior and improves the health of your business or people around you.

Compare the dichotomy between the standard rational economics assumption that humans are self-interested and the behavioral economics propositions explaining how and why humans are altruistic and care about giving to others.

Articulate why thinking in financial terms and incentives might not always be a wise idea and understand why fairness matters in economic marketplaces and how it is compatible with running a business.

Analyze why and when it is socially acceptable to charge fees or surcharges and, more generally, to balance supply and demand using standard economic pricing mechanisms.

Learn the importance of social norms and pressure, reciprocity, and distributive vs. procedural justice

Discover through a Qualtrics-based exercise in experimentation and prediction what kind of motivational treatments work best in the short run to make someone execute a given task.

Realize that behavioral economics is just getting started when it comes to understanding motivation—What other approaches motivate people to make decisions?

Think about how to create a company culture that is built on solid psychological principles.

Recognize how information interventions over biased beliefs can modify mind-sets and be potential sources of change and development of new standards in decision-making.

Learn how nearly everyone exhibits common biases such as projection bias and the bias of the winner’s curse.

Identify some of the most important biases, including survivorship bias and overconfidence, and learn how they influence business decision-making.

Discover how our attention is limited and why this leads us to make significant decision errors when our attention is drawn to some things but not others.

See how something as simple as failing to pay attention to certain digits of a number can dramatically change how certain economic markets function.

Learn how inattention works in a competitive market and how to grapple with the ethics of competing for consumer attention.

Measure and identify the sensitive topic of discrimination through five distinctive methods: audit studies, all-else-equal studies, own-group bias studies, correspondence studies, and eliminating group cues in the decision-making process.

Learn how standard economics categorizes discrimination into one of two models: statistical discrimination and taste-based discrimination.

Explore how psychology can deepen our understanding of how discrimination works and how we can combat it.

Become familiar with basic principles of good choice architecture and the way we can influence people’s behavior by nudging them into a good direction.

Discuss several examples of nudging such as putting numbers into context and smart engineering/design.

Detect examples of nudges and sludge (bad psychology; the exact opposite oulf nudging) in the real world and apply your insight to your business or career.