IIMBx: Behavioral Economics and Public Policy

This course provides a perspective to understanding decision making. It will equip the learners with tools to better understand these deep psychological processes. It will discuss the topics like loss aversion, nudges, some notions of fairness and will also deal with practical examples which will help to form strategies in real life work environment.

Course Description

This course introduces learners to behavioral economics, emphasizing how psychological factors influence decision-making processes. Topics include nudges, choice architectures, fairness, heuristics and biases, and risk preferences, showcasing their impact on both individual choices and policies.

What Students Will Learn

Analyze nudges and how they can alter behaviors.
Understand the deep-seated psychological processes behind decision-making.
Correlate human behavior with financial decisions through real-life examples.

Prerequisites or Skills Necessary

A basic understanding of economics is required to fully benefit from the course content.

Course Coverage

Introduction to behavioral economics principles.
Detailed exploration of decision-making processes.
Analysis of psychological factors affecting economic choices.
Applications of behavioral insights in public policies.

Who This Course is For

This course is ideal for students, professionals, or anyone interested in understanding the psychological aspects of economics and improving decision-making strategies in both personal and professional contexts.

Real-World Application of Skills

Learners can apply these behavioral insights to better understand consumer behaviors, enhance business strategies, design more effective policies, and improve their decision-making skills in everyday life.

Course Syllabus

Week 1: Heuristics and Biases

Exploration of cognitive biases like representativeness, anchoring, availability, and overconfidence.

Week 2: Risk Preference of Humans

Coverage of loss aversion, probability weighting, prospect theory, and mental accounting.

Week 3: Impatience and Self-Control

Understanding of discounting, present biased discounting, and commitment contracts.

Week 4: Strategic Thinking and Social Preferences

Insights into strategic thinking variations between econs and humans and the notion of fairness.

Week 5: Behavioral Public Policy

Discussion on discrimination, its types, evidences, consequences, and policies to reduce gender and other disparities.

Week 6: Nudges and Public Policy

Comprehensive look at designing effective nudges and choice architectures for policy-making.