Course Syllabus

Behavioral Economics: European Case Studies

Semester & Location:	Spring 2024 - DIS Copenhagen
Type & Credits:	Elective Course - 3 credits
Major Disciplines:	Business, Economics
Prerequisite:	One course in intermediate or advanced microeconomics at university level.
Faculty Member:	Toke Fosgaard & Jimmy Martínez-Correa - Contact via Canvas inbox
Time & Place:	Tuesdays 13.15 - 16.10 Classroom: F24-503

Course description:

Behavioral Economics is revising the standard economic model of human behavior by integrating psychological research and economic science. This course is based on new theory and experiments by examining actual economics related human behavior. The analytical skills of the students will be developed through work with conflicting theories and with data on choices made by people based on social norms that contradict the strictly rational model. We relate this to how behavior and norms are different in the Nordic and European countries as compared to the American research material presented in class.

Learning objectives of the course:       

By the end of this course, you will be able to:

• Understand what behavioral biases are and identify domains where they exist
• Learn how one can exploit biases in markets and through interaction with other individuals
• Know how a range of behavioral biases (in individual decision making and interactive decisions) have been addressed in the behavioral economics literature
• Understand the tension between traditional economics and behavioral economics, and how they might or might not explain biases
• Be able to structure a research question on observed behavioral biases
• Be able to test your own behavioral hypothesis with experimental methods
• Gain the necessary skills to approach and understand the growing body of behavioral economics literature

Required texts:

Please pick up the following textbooks from the DIS library during arrivals week:

John List: “The Voltage Effect” (VE)

Uri Gneezy "Mixed Signals"

These are easy-to-read books with several real-life examples where behavioral economics and experiments can help us understand puzzling phenomena. Additionally, we do recommend that while reading the book, students should take notes of potential new ideas derived from the results explained in the books, and that could be used later for the semester project that students have to deliver. We explain the semester project in more detail below.

In addition, several research papers for each lecture will be available on DIS Canvas, but most of them can be found online.

Pre-requisites:

One course in intermediate or advanced microeconomics at university level.

Approach to teaching:

The course mixes theory from texts, research papers and practical exercises in experiments. The course combines discussion-based class sessions, class based experiments, team work, and team presentations through assignments. Your learning process depends on your active participation in class as well as outside the classroom. You are strongly encouraged to bring your observations into the classroom.

Expectations of the students:

We expect students to be curious and willing to engage in discussions. For the semester project, we expect students to observe behavior in the real world, reflect on it, and to be able to design an experiment to test it.

Computer policy:

You can use Laptop and tablets for note-taking purposes. These devices (and maybe smartphones) may also be used also for conducting online experiments so please bring them to class.

Components of Course Grades:

1. Exam First Half (15 out of 100 points): There will be a midterm exam with questions in the readings from the first half of the term. Any material covered in Lecture 1 through 6 is fair game for the exam. It is a closed-book exam that will last 1 hour.
2. Student participation + experiments (10 out of 100 points): This component covers active participation in class, performance in small assignments, in-classroom experiments and field experiments to be run during the field trips. Furthermore, students will have the responsibility (under instruction of the teacher) to run the classroom experiments. This will give a chance for students to experience what it entails to run an experiment and accumulate experience to potentially run experiments for their semester project. Students will coordinate with the instructors to find out which experiments they are responsible for. Participation is not to be confused with mere attendance during the semester. A qualitative judgment of your contribution will be made by the instructors and improper use of computers in class can for instance affect this assessment.
3. Semester Project (50 out of 100 points):
   Each student will be randomly assigned to a team of approx. 4 persons.
   1. Each group has to upload 2 pages with a description of 3 possible topics for the semester project. (needs to be uploaded on https://disabroad.instructure.com/login/canvas, further guidelines are available here)
   2. Additionally, a 2 page peer review constructively criticizing the 3-topic proposal submitted by another class group should be uploaded (needs to be uploaded on canvas, further guidelines are available here).
      
      Discussions about potential topics for the semester project are made with Jimmy and Toke.

Delivering both the 3-topics proposal and the peer review are worth 5 points each, for a total of 10 points, only if both assignments are delivered on time.

1. Building upon the two previous assignments, each group will write a 1-page semester project proposal
   (to be uploaded on canvas).

If the project proposal is submitted on time and the group satisfactorily defends their proposal, the group can obtain up to 5 points.

Building upon feedback and all previous assignments, each group will write a 1-page with the description of the experimental design(to be uploaded on canvas).

If the experimental design description is submitted on time and the group satisfactorily defends their proposal, the group can obtain up to 5 points.

1. Finally, each group will write an 8-page semester project (to be uploaded on canvas).
   Finally each group has to present and defend the project in at the end-of-semester Showcase. The written report and the presentation together counts towards the grading of the semester project.

Minor funding is available for conducting the experiments for the semester projects.

It is expected that the distribution of work for the semester project is evenly split among the members of each group. Therefore, the individual grade of the semester project will be the same for all members. As a consequence, it is up to the members of each group to make sure that all the members contribute equally to the semester project and no free-riding occur. If any group is having free-riding issues, group members should contact the instructors and measures will be taken on a case-by-case basis.

4. Class presentations (10 out of 100 points): Each group will make one 20-minute presentation, occurring throughout the semester. Each group will have to find a current “real life” unsolved/understudied problem (using news articles, magazines, blogs, papers, etc...) that is related to the topic of the lecture of the day. The presentation must emphasize what traditional economics would say about the problem and compare it to what behavioral economics has to say about the problem. Additionally, the presentation can include comments on the suggested solutions by both approaches, as well as include the pros and cons of each suggested solution. Finally, the presentation should give some recommendation to solve the problem. Students can contact the instructors for further information about guidelines for the presentations.
5. Exam Second Half (15 out of 100 points): This exam is similar to the first exam, but covers only material from the second part of the course. Any material covered in Lectures 7 through 10 is fair game for the exam. It is a closed-book exam that will last 1 hour. .

Components of Grading (Summary):             

1. Exam First Half                                                       = 15 points                 
2. Exam Second Half                                                  = 15 points                  
3. Student Participation + experiments                   = 10 points               
4. Semester project:            
   4.1. 3-topics Proposal and Peer Review              = 10 points                
   4.2. Semester Project Proposal                            = 5 points                
   4.3. Experimental Design Proposal                      = 5  points            
   4.4. Semester Project - Presentation                   = 30 points                
5.  Class Presentations                                              = 10 points   

Total                                                                             = 100 points                 

Faculty                                                                         

Jimmy Martínez-Correa

2015 – Present   Associate Professor at Copenhagen Business School

2012 –  2015       Assistant Professor at Copenhagen Business School

2012 – Present   Fellow at the Center for the Economic Analysis of Risk, Georgia State University

2007 – 2012       PhD at Georgia State University

2005 – 2007       Chief Economist, Trade Association of Insurers (Colombia)

2003 – 2005       Junior Economist at the Department of Financial Stability, Central Bank (Colombia)

Web:                   Jimmy Website

Toke Fosgaard

2023 -                    Associate professor at The Danish Technical University

2016 – Present     Associate professor at University of Copenhagen

2021-2022           Visiting professor at University of California, San Diego

Web:                      link

 

Academic Regulations  

Please make sure to read the Academic Regulations on the DIS website. There you will find regulations on: 

• Course Enrollment and Grading  
• Academic Expectations and Honor Code 

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