Browse Hierarchy ECOM101: Behavioural Economics

There is mounting evidence that people violate many of the "rationality" assumptions of mainstream economics. Behavioural economics studies such violations and proposes theories to explain them. Some key topics are bounded rationality, overconfidence, prospect theory, dynamic inconsistency, and implications of human irrationalities for public policy. Knowledge of behavioural economics provides students with a deeper and more realistic understanding of human decision­making than is offered by the mainstream approach alone. Such knowledge will hopefully also make students less susceptible to common mistakes in their own decisions.