Introduction to Behavioural Economics

About Course

Ever wondered why people make irrational financial decisions even when they know better?

Our Introduction to Behavioral Economics course explores the fascinating world of human behavior and its impact on economic decisions. This course delves into the key concepts of behavioral economics, highlighting why it is crucial to understand these principles in today’s complex financial landscape. This course provides a comprehensive overview of behavioral economics, examining how psychological factors influence economic decision-making. You’ll explore the historical context and compare behavioral economics with traditional economic theories, gaining insights into why people often act against their best financial interests.

Enrol Now if you want to get introduced to the thinking processes & consumer insights!

Core Concepts of Behavioral Economics: Understand the fundamental principles and theories of behavioral economics. Learn how psychological factors influence economic decisions.
Importance of Behavioral Economics: Discover why behavioral economics is crucial in today's financial and economic landscape. Explore the real-world applications and implications of behavioral economic theories.
Historical Comparison with Traditional Economics: Compare and contrast behavioral economics with traditional economic theories. Understand the limitations of traditional models and how behavioral economics addresses them.
Key Milestones in the Development of Behavioral Economics: Trace the evolution of behavioral economics from its inception to its current prominence. Study significant milestones and influential figures who have shaped the field.
Decision-Making Processes: Explore how and why people make economic decisions, often irrationally. Analyze various biases and heuristics that affect decision-making.
Applications of Behavioral Economics: Learn how behavioral economics principles can be applied to improve marketing strategies, public policies, and financial planning. Study case studies and real-world examples of behavioral economics in action.
Improving Economic Outcomes: Develop strategies to utilize behavioral insights for better decision-making in personal and professional contexts. Understand how to design interventions that can nudge individuals towards more rational and beneficial economic behaviors.

Course Content

Behavioural Economics: Core Concepts
This module on Behavioural Economics introduces how the field blends psychology, sociology, and economics to understand real-world decision-making beyond traditional rational models. It covers key psychological insights, including cognitive biases (like anchoring and confirmation bias), heuristics (mental shortcuts leading to biased judgments), and emotional influences on decision-making. It also explores sociological factors, such as social norms and cultural differences, that shape economic behavior. Additionally, it revises traditional economic theories, like utility and expected utility, to account for human irrationalities. The module emphasizes how biases like loss aversion, status quo bias, overconfidence, and temporal discounting affect choices, providing a more comprehensive view of human behavior and its implications.

Behavioural Economics Explained

00:00
Importance of Behavioural Economics

00:00
Introduction to Behavioural Economics by Donald Duck

00:00

Behavioural vs Traditional Economics
This module contrasts Traditional Economics with Behavioral Economics. Traditional economics assumes rational decision-making with stable preferences, perfect information, and optimal choices. Behavioral economics, however, integrates psychological insights, recognizing that people often act irrationally due to cognitive biases and limited information.

Key Milestones related to Behavioural Economics
This module outlines the development of behavioral economics and its key figures. In the 1950s, Herbert Simon introduced bounded rationality, highlighting cognitive limitations in decision-making. In the 1970s and 1980s, Daniel Kahneman and Amos Tversky developed Prospect Theory, uncovering cognitive biases like loss aversion. Richard Thaler's work in the 1980s and 1990s on mental accounting and nudges established behavioral economics as a distinct field. Robert Shiller's research from the 1990s onward in behavioral finance provided insights into market behaviors like irrational exuberance. Key figures include Herbert Simon, Daniel Kahneman, Amos Tversky, Richard Thaler, and Robert Shiller, all of whom significantly contributed to integrating psychology with economics.

Introduction to Behavioural Economics

About Course

What Will You Learn?

Course Content

Behavioural Economics Explained

Importance of Behavioural Economics

Introduction to Behavioural Economics by Donald Duck

Historical Comparison with Traditional Economics

Historical Development & Key Figures

Quick Links

Contact