AECN 896 Behavioral Economics
AECN 896 Behavioral Economics
Syllabus, Spring/Summer Semester, 2010
(also see the
Class
Schedule, for detail on timing of the topics)
"The economy is ... 'embedded' ...(it) is not a sphere of Prudence Only independent of other ethical considerations (McCloskey, 2006, p. 496)"
"Can a group of asocial monsters, who have never been children and have never loved anything, never had faith or hope or justice or temperance, be shown on a blackboard to create out of rational self-interest a civil society? The problem can be shown rigorously to be insoluble, at least under Prudence-Only axioms of strict self-interest (McCloskey, 2006, p. 497)
Last update: November 16, 2009 . This on-line syllabus is under construction, so stay tuned! This is a new course, growing out of a series of readings and seminar courses organized over the period fall, 2004-spring, 2005, and two test runs for the course, the most recent in 2008. We are moving toward a full-fledged regularly offered course, reflecting the reality that the behavioral approach to economics is gaining in ever more scientific creditability. This new science is providing the basis for going beyond and transcending traditional economic ways of characterizing and thinking about human behavior in the economic realm. Due to the financial crisis and near economic collapse in 2008-2009, interest has perhaps never been greater in what behavioral economics can say about business and industry, economy and community.
Potential Participants in the Course: Graduate students intrigued with the science of behavioral economics and its close relatives represented in economic psychology, neuroeconomics, experimental economics, and institutional economics.
Course number, name, call number: The course will be available through the regular registration process here at UNL, during spring, 2010. It will be offered during the March 29-June 4 time period; see UNL schedule of classes... Call #9004, Section #2. We are also still considering the possibiliy of it being offered as an on-line, distance education course at the same time it is offered in-residence on-campus, much like we now do the Ecological Economics 883 course (see http://agecon.unl.edu/lynne/ecolecon/ecoleconsyllabus.htm ). Stay tuned, and, if you have an interest in taking it as a distance, web-based course, please contact us.
Prerequisites: Generally, knowledge of microeconomics needs to be at least at the upper division undergraduate level, with master's level training in principles preferred; macroeconomics is not essential, but is also useful.
Credits/Hours: Variable, 1 to 3-credit hours.
Meeting Time and Place: The on-campus class will generally meet once per week with place, day and time to be arranged.
Contact information for Instructor:
Online applications used in this course:
Blackboard holds the set of course material, except for books that need to be accessed through a university library or purchased. The Blackboard site is accessible through http://my.unl.edu/ . We will help you interact with Blackboard, posting "how to do" URL sites at appropriate times, e.g. on "How to use the Discussion Board." There is also a Blackboard Manual available (after you log into Blackboard, and the Course, just click on Tools and then Manual). If you have specific technical difficulties in working with Blackboard, we will provide support: Please contact Terry Workman, Instructional Designer, University of Nebraska-Lincoln at tworkman2@unl.edu or call 402-472-0977.
Course Overview:
This course provides an overall map of the territory, pointing to how Behavioral Economics takes a somewhat different approach to economics, business (including agribusiness and the food system) economics, and community economics. As Glimcher et al.(2009, p. 4) note, "... behavioral economics.proposes models of limits on rational calculation, willpower, and self-interest, and seeks to codify those limits formally and explore their empirical implications using mathematical theory, experimental data, and analysis of field data." It recognizes there are Humans at work in real economic choice in contrast to Econs, the Econs referring to the idealized nature of homo economicus in microeconomic theory (the notion of Humans v. Econs is highlighted in Thaler, R.. and Sunstein, C.R. Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven, CN: Yale University Press, 2008, pp. 6-7)).
Course Objectives:
Students will gain a better understanding of the overall frame for thinking in Behavioral Economics terms. One will learn about the major hypotheses that have been tested in the past, which then gives a good basis for forming hypotheses to be tested. Students will also gain a better understanding of how Behavioral Eonomics relates to Neuroeconomics and Institutional Economics. It will also become clear how Behavioral Economics relates to methods in Experimental Economics: As Glimcher et al. (2009, p. 4) point out, there is a kind of convergence at work between Behavioral and Experimental Economics, although the overlap of the two approaches is far from complete: “Behavioral economics is based on the presumption that incorporating psychological principles will improve economic analysis, while experimental economics presumes that incorporating psychological methods (highly controlled experiments) will improve the testing of economic theory.” It is also the case that Behavioral Economics works to suggest alternative economic theory, through basing new theory on empirical findings, and thus putting an ever more solid scientific foundation under economics.
Course Materials:
The course is centered around two Handbooks, both on reserve in the library during the offering of the course.
Altman, M. (Ed.). Handbook of Contemporary Behavioral Economics: Foundations and Developments. New York: M.E. Sharpe, 2006. (This book represents efforts by scientists associated with the Society for the Advancement of Behavioral Economics, SABE. The new SABE website is under constructoin; also see the original SABE website ).
Glimcher, P.W., Camerer, C.F., Fehr, E. and Poldrack, R.A (Eds.). Neuroeconomics: Decision Making and the Brain. New York, NY: Elsevier, 2009. (This book represents efforts by scientists associated with the Society for Neuroeconomics ).
Also, this book is useful in gaining an overview of the field:
Schwartz, H. A Guide to Behavioral Economics. Falls Church, VA: Higher Education Publishers, 2008.
It is suggested you at minimum purchase the Schwartz (2008) book. It is also advisable to buy at least one of the Handbooks. Various web based sources will have these books, e.g. Amazon, Barnes and Noble, directly from the Publisher, etc.
Other recommended books:
Bromley, D. W. Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions. Princeton, NJ: Princeton University Press, 2006. (Note: This is an Institutional Economics book in contrast to a Behavioral Economics book, albeit these two areas of inquiry are highly intertwined, as in "Institutional and Behavioral Economics (e.g. see IBES, the Agricultural and Applied Economics Association Section that works to integrate these ways of thinking at the annual conference of this association). This book helps us understand that one cannot understand individual economic behavior without understanding the institutional context for it, institutions being of three kinds: norms and traditions, working rules of organizations, and property relations. For reviews of this book, see Lynne(2007), Stephenson(2007), and Lynne(2009). For an indicator as to how this approach to thinking about how policy might be understood and applied (i.e. looking at nudges to economic behavior, which is inherent in changing policy) especially see Lynne, 2007).
Etzioni, A. The Moral Dimension: Toward a New Economics. New York: The Free Press, McMillan, Inc., 1988.
Frank, R. What Price the Moral High Ground? Ethical Dilemmas in Competitive Environments. Princeton, NJ: Princeton University Press, 2004.
McCloskey, D. N. The Bourgeois Virtues: Ethics for an Age of Commerce. Chicago: The University of Chicago Press, 2006.
Journal and other readings: In some Lessons, a particular journal paper or part of another book will be required reading. In these cases, the material will be made available through Blackboard, or, students may access the material directly through local university libraries (e.g. through JSTOR or other reference services; generally the library has direct access to the electronic version of the journal if the library has a subscription to it).
Computer requirements:
Any modern computer will do. High speed internet access is desirable but not essential. Microsoft Offie is the main software used in the class.
Course Policies and Procedures:
Category grading is applied, using:
A: 90-100 = Excellent work
B: 80-89 = Good work
C: 70-79 = Poor work
D: 60-69 = Very poor work
F: 50-59 = Insufficient/Failure
Generally, a graduate student must maintain a “B or better” grade point average,
with the goal to obtain at least a B in every course. So, for each
assignment, a grade of 79 or less is subject to the
"safety-net" policy. If your grade is in this range, you have the option of
redoing the assignment. However, the total points added cannot give a new grade higher than 80.
This policy is only to recognize that we all have bad days, bad times with a
particular problem set, etc., and to help ensure everyone is successful.
This policy does not affect the grades of others, in that grades are awarded by category. That is, there is no curve: the entire class, e.g., could earn a B or better grade, including all As. Plus/minus grades are also awarded within each category, e.g. 80-84 = B- and 85-89 = B+. We encourage high quality work, and especially recognize progress made by each individual as we move forward through the semester.
Exams:
There are no exams.
Written and Computer based assignments:
The main
assignment will be to prepare a series of PowerPoints (with the number dependent upon how many credit hours you choose), which will account for 80% of
the grade. At least one of these needs to represent a major area of Behavioral
Economics as delineated in Tomer (2007), drawing on material in the Handbooks as well as journal papers and other books.
"Notes" or "Audio" must be added to each
slide, either prior to or during class, and reflect thoughtful analysis of what is
on-going in each of these cases. These PowerPoints will be presented in-class. These will also be made accessible on the Blackboard system for use by classes in subsequent years. The overall
purpose of developing a PowerPoint(s) with extensive
Notes or Audio augmentation is to not only help yourself and the reader
understand, but also
to persuade, and to help the understanding of all participants (including the Instructor!) in the class.
Discussion on Blackboard:
Participation in the Discussion Board on Blackboard will provide for the other 20% of the grade. The Discussion recognizes that ongoing conversation needs to be connected to the underlying scientific conversation (seeing science as a kind of conversation) in the books, journal papers... as well as to that in other realms, like the contemporary news, and with one's own experiences in dealing with such issues.
Assessment:
To ensure consistency in grading, as well as serving to better characterize what is expected, we use Rubrics in grading. See the Discussion Board Rubric and the PowerPoint Presentations Rubric.
Class Schedule (see UNL Academic Calendar for other important dates):