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Module

ECO3005 : Behavioural Economics and Experimental Methods

  • Offered for Year: 2020/21
  • Module Leader(s): Dr Jytte Seested Nielsen
  • Lecturer: Professor Susan Chilton
  • Owning School: Newcastle University Business School
  • Teaching Location: Newcastle City Campus
Semesters
Semester 1 Credit Value: 10
Semester 2 Credit Value: 10
ECTS Credits: 10.0

Aims

The primary aim of the module is to introduce students to the basic foundations of behavioural economics and experimental methods in the context of so-called “behavioural anomalies” that stand in contrast to the predictions of standard economic theory with respect to individual behaviour. Students will gain experience of economic decision-making experiments as an analytical technique.

Outline Of Syllabus

In the past twenty years there has been a revolution in economics with the study not of how people would behave if they were perfectly rational, but of how they actually behave – and this has thrown up a number of so-called apparently persistent “behavioral anomalies” that stand in contrast to the predictions of conventional economic theory. In this module we will illustrate how experimental methods have been and can be utilized to explore a number of such anomalies and assess their robustness
The module will be based around the following topics.
1.Introduction to behavioural economics
2.Experiment methods. Techniques.
3.Experimental methods. Applications
4.Field experiments
5.Prospect theory
6.Mental accounting
7.Preference reversal.
8.Ambiguity aversion (Ellsberg Paradox)
9.Allais Paradox
10.Social preferences (Dictator game and/or Ultimatum game).
11.Willingness-to-pay/Willingness-to-accept discrepancy
12.Rationality spill-over
13.Time inconsistent preferences
14.Charitable giving, altruism and warm glow
15. Nudge

Each topic will be supported, either singularly or in combination, by:
i.Experiments - experiments sourced from the literature. Students will participate in the experiments and will analyse the data
ii. Seminars will be based around academic journal papers from the experimental literature. Students will participate by identifying the key hypotheses, describe the design and discuss the results.
iii.Lectures: will place the student tasks into their wider context by drawing on other evidence in the literature, thus providing a broader perspective to the topic and will, where relevant, assess the implications for conventional theory.

Teaching Methods

Please note that module leaders are reviewing the module teaching and assessment methods for Semester 2 modules, in light of the Covid-19 restrictions. There may also be a few further changes to Semester 1 modules. Final information will be available by the end of August 2020 in for Semester 1 modules and the end of October 2020 for Semester 2 modules.

Teaching Activities
Category Activity Number Length Student Hours Comment
Guided Independent StudyAssessment preparation and completion130:0030:00N/A
Structured Guided LearningLecture materials182:0036:00N/A
Scheduled Learning And Teaching ActivitiesSmall group teaching61:006:00N/A
Scheduled Learning And Teaching ActivitiesWorkshops31:003:00N/A
Structured Guided LearningStructured non-synchronous discussion92:0018:005 hrs to be done synchronously
Guided Independent StudyStudent-led group activity150:0050:00N/A
Guided Independent StudyIndependent study157:0057:00N/A
Total200:00
Teaching Rationale And Relationship

i.       Experiments – Intended Knowledge Outcome 2, Intended Skills Outcomes 1,2,3.
iii.       Lectures – Intended Knowledge Outcomes 1,2, Intended Skills Outcomes 4
iv.       Small group teaching Intended Knowledge Outcome 2, Intended Skills Outcomes 2,3

Assessment Methods

Please note that module leaders are reviewing the module teaching and assessment methods for Semester 2 modules, in light of the Covid-19 restrictions. There may also be a few further changes to Semester 1 modules. Final information will be available by the end of August 2020 in for Semester 1 modules and the end of October 2020 for Semester 2 modules.

The format of resits will be determined by the Board of Examiners

Exams
Description Length Semester When Set Percentage Comment
Written Examination1202A70N/A
Other Assessment
Description Semester When Set Percentage Comment
Report2M30Individual report of 2,000 words
Formative Assessments
Description Semester When Set Comment
Prob solv exercises1MQuestions about experimental data will be provided
Prob solv exercises2MQuestions about experimental data will be provided
Assessment Rationale And Relationship

The unseen examination at the end of the module is designed to encourage study and to test student understanding of the fundamental theoretical and empirical evidence with respect to economic behavioural anomalies. The report provides the student with the opportunity to demonstrate effective in-depth, written communication of the experimental process and its outputs.

Reading Lists

Timetable