Behaviour, Decisions and Markets
If you want to predict the outcome of an election, whose advice should you take: the pundits’ or the market? What are the motivations that lie behind our decision to give to charity? To what extent are our decisions influenced by context? The aim of this module is to enable you to examine economic theory from a behavioural perspective, and highlight instances where standard economics predicts actual choices correctly and instances where it does not. You will be introduced to recent behavioural theories that have emerged to explain the empirical observations, and will discuss the implications for economics, business and politics. While focusing on the main developments in behavioural economics, the module aims to expose you to the methodology of experimental economics and how it can be used to empirically test economic theory.
This module looks at the fundamentals of behaviour to understand issues like financial crisis and irrationality in markets, so it is applicable to an international environment.
Sustainability is explored in relation to topics of economic sustainability, cooperation in order to maintain the common public good and the necessary conditions to achieve success.
Students develop their critical thinking and writing skills in this module.
Full module specification
|Module title:||Behaviour, Decisions and Markets|
|Duration of module:||
Duration (weeks) - term 2: |
The aim of this module is to enable students to examine economic theory from a behavioural perspective, and highlight instances where standard economics predicts actual choices correctly and instances where it does not. Students will be introduced to recent behavioural theories that have emerged to explain the empirical observations, and will discuss the implications for economics, business and politics. While focusing on the main developments in behavioural economics, the module aims to expose students to the methodology of experimental economics and how it can be used to empirically test economic theory.
ILO: Module-specific skills
- 1. be familiar with the methodology of and recent developments in experimental economics and their impact on economic theories
- 2. understand how economics experiments are designed
ILO: Discipline-specific skills
- 3. discuss and evaluate how economic theories are developed and tested
- 4. understand how new theories are developed to account for new empirical evidence.
ILO: Personal and key skills
- 5. participate in group work
- 6. produce high quality work (whether in a group or individually) in written form
- 7. engage in independent study
- 8. research and summarise a body of literature in order to produce a report
- 9. engage in critical thought and reasoned discussion
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Participating in experiment (typical group size: 4 students)||1 hour||1-5||Verbal|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Written essay||25||1,500 words||1-6, 8, 9||Verbal or written|
|Exam||75||2 hours||1-4, 6-9||Verbal|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Exam and Essay||Exam (100%) 2 hours||1-4, 6-9||Augus re-assessment period|
• Rational Choice
• Framing Effects
• Group Decision-Making
• Social Identity • Bargaining and Fairness
• Market Experiments
• Behavioural Game Theory I: Coordination
• Behavioural Game Theory II: Cooperation
• Behavioural Game Theory III: Sequential Decision-Making
Indicative learning resources - Basic reading
Holt, C.A (2006) Markets, Games and Strategic Behavior, London: Pearson / Addison Wesley
Kahneman,D and Tversky, A. (2000) Choices, Values, and Frames Cambridge: Cambridge University Press
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Last revision date