Behavioral Economics and Public Policy from edX

The course gives an introduction to behavioral economics through various tools and techniques and gives a detailed perspective to understand decision making. It will help in understanding the various psychological processes that a consumer goes through while making a decision using topics like nudges, choice architectures, some notions of fairness and also some real life examples. The course will also contextualise how a simple nudge can change a person’s decisions, strategies, and choices. The course touches upon indicators like Heuristics and biases, growth biases and risk preferences. The course will also introduce the terms like Loss aversion, sunk costs, discounting. It will give a distinction between the thought processes of econs and humans. Lastly, the course also delves into the topic of discrimination and its types, evidences and consequenes and how policies have been introduced to reduce the various gaps.

What you'll learn

At the end of this course, you will

Explain and analyze nudges and how choices can alter a person’s behaviour
Understand decision making and its deep psychological processes.
Correlate human behviour with financial decisions.
Understand the various choices and strategies that we take in real life environment by practical examples.

What's inside

Learning objectives

Explain and analyze nudges and how choices can alter a person’s behaviour

Processes.

Explain and analyze nudges and how choices can alter a person’s behaviour
Processes.

Syllabus

Week 1: Heuristics and Biases

Heuristics and Biases

Representativeness

Biases resulting from representativeness

Anchoring

Availability

Affect

Overconfidence

Exponential growth bias

Other biases

Week 2: Risk Preference of Humans

Changes vs Levels

Loss aversion: losses and gains

Probability weighting function

Prospect theory

Mental accounting

Bundling gains and losses

Acquisition and Transaction Utility

Sunk Costs

Week 3: Impatience and Self Control

Discounting the future

Exponential discounting

Anomalies

Present biased discounting

Naifs. Partial Naifs and sophisticates

Commitment Contracts

Week 4: Strategic thinking and social preferences

Strategic thinking among econs

Strategic thinking among humans: Level K

Cognitive Hierarchy Model

The idea of fairness

Week 5: Behavioral Public Policy

Discrimination

Post hoc justification

Types of Discrimination

Evidence of Discrimination

Consequences of Discrimination

Combatting Discrimination

Economics of Gender

Differences in Gender

Policies to rduce gender gaps

Week 6: Nudges and Public Policy

Nudges

Designing a choice architecture

Choice architecture

Half a dozen nudges

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Explores a wide range of concepts and theories that are fundamental to understanding behavioral economics, making it ideal for learners looking to build a solid foundation in the field

Taught by Ritwik Banerjee who is recognized for their expertise in behavioral economics

Develops valuable analytical and decision-making skills, which can be applied to personal and professional situations, making it relevant to a wide audience

Utilizes a blended learning approach, including videos, readings and discussions, catering to diverse learning styles

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Behavioral Economics and Public Policy with these activities:

Organize and summarize lecture notes and readings.

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Organizing your materials will help you retain information and prepare for assessments.

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Review your lecture notes and identify key points.
Summarize the main arguments and concepts from the readings.
Organize your notes and summaries using a logical structure.
Create flashcards or mind maps to enhance memorization.

Read ‘Thinking Strategically’ by Dixit and Nalebuff.

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‘Thinking Strategically’ provides real-world examples and case studies that will help you understand how game theory is applied in various fields.

View The Art of Strategy: A Game Theorist's Guide to... on Amazon

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Read the chapters on game theory basics and applications.
Analyze the case studies presented in the book.
Reflect on how the game theory concepts discussed in the book relate to the lectures.

Simulate decision scenarios using Python.

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Simulating decision scenarios using Python will give you hands-on practice with implementing game theoretic concepts.

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Set up a Python environment for game simulation.
Find tutorials on implementing game theory algorithms in Python.
Develop Python scripts to simulate different game scenarios.

Three other activities

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Attend a game theory discussion group or study session.

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Engaging in peer discussions will allow you to exchange ideas, learn from others, and clarify your understanding.

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Identify or create a study group or discussion forum.
Prepare questions or topics for discussion.
Actively participate in discussions and share your insights.

Solve game theory puzzles and problems.

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Solving game theory puzzles will challenge your understanding and help you develop strategic thinking skills.

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Find online resources or textbooks with game theory puzzles.
Set aside time for regular practice.
Focus on understanding the underlying concepts rather than just finding the solutions.
Reflect on your solutions and identify areas for improvement.

Provide guidance to fellow students in understanding game theory concepts.

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Mentoring others will reinforce your understanding and foster a deeper engagement with the course material.

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Identify opportunities to assist fellow students.
Provide clear explanations and examples to help others grasp concepts.
Encourage questions and discussions to foster critical thinking.

Career center

Learners who complete Behavioral Economics and Public Policy will develop knowledge and skills that may be useful to these careers:

Behavioral Economist

Behavioral Economists conduct research on the psychological factors that influence economic decision-making. They apply concepts like nudges and choice architecture to design policies that encourage individuals to make better choices. A deep understanding of the topics covered in this course, such as risk preferences and biases, can aid aspiring Behavioral Economists.

See salaries and explore the career path for Behavioral Economist

Behavioral Scientist

Behavioral Scientists apply behavioral economics principles to understand and influence human behavior across various domains. The concepts covered in this course, such as nudges, choice architecture, and loss aversion, are essential for aspiring Behavioral Scientists seeking to design impactful interventions.

See salaries and explore the career path for Behavioral Scientist

Economist

Economists use behavioral economics to analyze the impact of psychological factors on economic behavior. This course covers concepts like heuristics and biases, loss aversion, and risk preferences, which are essential for understanding human decision-making and its implications for the economy.

See salaries and explore the career path for Economist

Public Policy Analyst

Public Policy Analysts use behavioral economics to understand the impact of policies on public behavior. Analyzing the effectiveness of nudges and other policy interventions, as covered in this course, can help professionals design better public policies.

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Social Psychologist

Social Psychologists study social influences on human behavior. Understanding concepts such as heuristics and biases, as covered in this course, can provide a strong foundation for understanding social phenomena and devising effective interventions.

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Policy Analyst

Policy Analysts use behavioral economics to analyze the impact of policies on public behavior. This course covers concepts like nudges and choice architecture, which are essential for designing effective policies that encourage individuals to make better choices.

See salaries and explore the career path for Policy Analyst

Education Policy Analyst

Education Policy Analysts use behavioral economics to understand the psychological factors that influence educational outcomes. Understanding concepts like heuristics and biases, as covered in this course, can aid in the development of effective policies that improve teaching and learning.

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Marketing Manager

Marketing Managers use behavioral economics principles to understand consumer behavior and develop effective marketing campaigns. Concepts such as heuristics and biases and loss aversion can be particularly important in this field. Taking this course would provide a strong foundation for a career in marketing, helping professionals understand the psychological processes that influence consumer behavior.

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Health Psychologist

Health Psychologists apply behavioral economics principles to understand the psychological factors that influence health-related behaviors. Concepts such as heuristics and biases, risk preferences, and discounting can inform the design of effective interventions to promote healthier choices.

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Public Health Specialist

Public Health Specialists use behavioral economics principles to understand the psychological factors that influence health behaviors. Concepts such as heuristics and biases, risk preferences, and discounting can inform the design of effective public health campaigns.

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User Experience (UX) Designer

UX Designers apply behavioral economics principles to enhance user experience in digital products and services. Concepts such as cognitive biases and mental accounting can inform the design of intuitive interfaces that cater to user needs. This course would provide a solid grounding for those aspiring to excel in UX Design.

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Product Manager

Product Managers leverage behavioral economics principles to design products that meet consumer needs. Understanding concepts like heuristics and biases can assist in creating user-friendly and intuitive products. This course would provide a valuable foundation for professionals seeking to become successful Product Managers.

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Human Factors Engineer

Human Factors Engineers apply behavioral economics principles to design products and systems that are safe and user-friendly. Understanding concepts such as heuristics and biases, mental accounting, and risk preferences can aid in designing systems that minimize human error.

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Marketing Consultant

Marketing Consultants assist clients in developing and implementing marketing strategies. Understanding the psychological principles behind consumer behavior, as taught in this course, can aid in the creation of effective marketing campaigns that resonate with target audiences.

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Financial Advisor

Financial Advisors use behavioral economics to understand the decision-making biases that can lead to suboptimal financial choices. Knowing about risk preferences, loss aversion, and other concepts covered in this course can equip aspiring Financial Advisors with the knowledge to assist clients in making informed financial decisions.

See salaries and explore the career path for Financial Advisor