This course is relevant to students with interest in marketing, general management, strategy, design, policy and finance.
2 classes per week for 6 weeks
The purpose of this course is to make behavioural economics accessible as a tool for solving management problems in strategy, marketing, and policy. By the end of the course, students should:
- Have a working understanding of key principles of behavioural economics
- Be able to articulate the relevance and implications of these principles for common business and policy problems
- Be able develop behaviourally informed insights and tactics using these principles
- Have sufficient foundation in behavioral principles to recognize, absorb and use new behavioural concepts they may encounter over the course of their career
This course focuses on core behavioral economic principles every executive should understand. We start from the premise that classical economic theory has a lot to say about how people should make certain types of decisions to optimize their outcomes. The heart of the course is understanding when, why, and how real decision-makers fall short of this standard, sometimes with severe consequences. Most famously, BE has been as a corrective for bad decision-making by “nudging” consumers toward choices. But its relevance is in fact much broader. Every organization has an interest in the choices made by its agents and stakeholders, whether they be consumers, citizens, managers, or other businesses. BE tells us how, when, and why people are likely to make counter-intuitive choices, with important implications for applications as varied as marketing, product development, customer experience management, pricing, strategy, and public policy.
Core topics of the course include: the role of emotions in decision-making; how expectations and other context variables shape perception; surprising ways people think about time and money; risk; and self-control. We also develop an understanding of choice architecture as a managerial tool – how controllable variables such as time, assortment, and complexity influence decision-makers.
Evaluation and Grade Distribution
|Midterm Exam*||Class session 8 or 9||20%|
|Final Group Projects||During exam period||40%|
- Cases and articles to be purchased by students or made available on the course web portal.