Subject Code: HS7L016	Subject Name: Fundamentals of Behavioral Economics	L-T-P: 3-1-0	Credit: 4
Pre-Requisite(s): None
Content: Introduction: What is behavioral economics? History and evolution; Objectives and scope; Themes and methodology of behavioral economics; Preferences, Choices and Decision Making: Herd Behavior; Non- standard beliefs (viz. gamblers' fallacy);Values, preferences and choice; believes; Choice under uncertainty; Axioms, Assumptions and Definitions; Decision making under risk and uncertainty; prospect theory; loss aversion and endowment effect; The standard model; Present Bias and Commitment Devices; Choice overload and Nudging debate; Inter temporal choice: The discounted utility model; Alternative inter temporal choice models; Time preferences, time inconsistent preferences; Alternative inter temporal choice models (time preferences, time inconsistent preferences); Hyperbolic discounting; Nudges, Happiness and Policy design: Incentives and norms for public policy; Social forces in markets and collective action problem; Social norms versus market incentives; Taxation and tax compliance; Tax attitude; Practical implications Text/Reference Books: Handbook of Behavioral Economics-Foundations and Applications - BD Bernheim, S DellaVigna, D Laibson(ed), North Holland. 2019. Wilkinson N, and Hales M, An Introduction to Behavioral Economics, Palgrave Macmillan, 2012. Dhami S, The Foundations of Behavioral Economic Analysis, Oxford University Press, 2016. Thaler, Richard H., and Cass R. Sunstein. Nudge: Improving decisions about health, wealth, and happiness. Yale University Press, 2008. Mullainathan, Sendhil and Eldar. Shafir. Scarcity: Why Having Too Little Means so Much. New York: Times Books, Henry Holt and Company, 2013. Kahneman, Daniel. Thinking, fast and slow. Farrar, Straus and Giroux, 2011. Mullainathan, Sendhil and Richard H. Thaler. 2000. “Behavioral Economics.”NBER Working Paper - 7948. Rabin, Matthew (1998). “Psychology and Economics.” Journal of EconomicLiterature.

Subject Code: HS7L016

Subject Name: Fundamentals of Behavioral Economics

L-T-P: 3-1-0

Credit: 4

Pre-Requisite(s): None

Content:

Introduction: What is behavioral economics? History and evolution; Objectives and scope; Themes and methodology of behavioral economics; Preferences, Choices and Decision Making: Herd Behavior; Non- standard beliefs (viz. gamblers' fallacy);Values, preferences and choice; believes; Choice under uncertainty; Axioms, Assumptions and Definitions; Decision making under risk and uncertainty; prospect theory; loss aversion and endowment effect; The standard model; Present Bias and Commitment Devices; Choice overload and Nudging debate; Inter temporal choice: The discounted utility model; Alternative inter temporal choice models; Time preferences, time inconsistent preferences; Alternative inter temporal choice models (time preferences, time inconsistent preferences); Hyperbolic discounting; Nudges, Happiness and Policy design: Incentives and norms for public policy; Social forces in markets and collective action problem; Social norms versus market incentives; Taxation and tax compliance; Tax attitude; Practical implications

Text/Reference Books:

Handbook of Behavioral Economics-Foundations and Applications - BD Bernheim, S DellaVigna, D Laibson(ed), North Holland. 2019.
Wilkinson N, and Hales M, An Introduction to Behavioral Economics, Palgrave Macmillan, 2012.
Dhami S, The Foundations of Behavioral Economic Analysis, Oxford University Press, 2016.
Thaler, Richard H., and Cass R. Sunstein. Nudge: Improving decisions about health, wealth, and happiness. Yale University Press, 2008.
Mullainathan, Sendhil and Eldar. Shafir. Scarcity: Why Having Too Little Means so Much. New York: Times Books, Henry Holt and Company, 2013.
Kahneman, Daniel. Thinking, fast and slow. Farrar, Straus and Giroux, 2011.
Mullainathan, Sendhil and Richard H. Thaler. 2000. “Behavioral Economics.”NBER Working Paper - 7948.
Rabin, Matthew (1998). “Psychology and Economics.” Journal of EconomicLiterature.