Behavioral Economics for Public and Social Policy: syllabus

Course:	Behavioral Economics for Public and Social Policy
Supervisor:	doc. PhDr. Pavol Frič, Ph.D.
Teacher:	Ing. Radek Kovács
Course code	JSM732
Examination	1/1, exam
ECTS	a) self-study and preparation for lectures 2 ECTS b) direct tuition and consultation 1 ECTS c) preparation of 3 presentations 0.5 ECTS d) elaboration of 2 critical reflections and a seminar paper 3.5 ECTS total 7.0 credits
Prerequisites	None
Web	(Moodle kurz EVP)
Consulting hours	https://konzultace.fsv.cuni.cz

Brief Characteristics of the Course:

“Do we make decisions rationally or irrationally? And how do we know? How can we use irrationality in social and public policy?” The elective course “Behavioral Economics for Public and Social Policy” provides answers to these fundamental questions. The aim is to acquaint students with the key principles and concepts of behavioral economics and its theory of nudge, to deepen their knowledge of subjects based on neoclassical economics and illustrate how behavioral economics can help to achieve more effective outcomes. The course will present current knowledge of behavioral economics and social psychology, with regard to their practical applicability in public policies (health policy, pension policy, environmental policy, savings making, education policy, welfare and happiness economics, etc.) with the subsequent formulation of implications for their implementation in the spirit of so-called "nudges".

The graduate of the course can:

formulate basic differences between neoclassical and behavioral economics,
explain mental abbreviations and heuristics and use them to propose solutions to achieve more effective outputs,
critically evaluate and identify areas in which the application of behavioral concepts can contribute to the improvement of public policy processes with regard to their implementation, efficiency or redistribution;

Graduates will use the acquired skills when working in both the public and private or non-profit sector. For a full understanding of the subject matter, continuous home preparation for each lecture is recommended (reading selected chapters of elementary literature).

Course Structure and Contents:

The course consists of three main parts - lectures, home reading of recommended literature and discussion / presentations and is not factually focused on a specific public policy or sector.

Elementary Literature:

KAHNEMAN, D. (2011). Thinking, Fast and Slow. New York: Farrar, Straus and Giroux. [česky: KAHNEMAN, D. 2012. Myšlení rychlé a pomalé, Jan Melvil Publishing, ISBN 978-80-87270-42-4]

THALER, R.H., SUNSTEIN, C.R. (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven: Yale University Press. [česky: Nudge (Šťouch) Jak postrčit lidi k lepšímu rozhodování o zdraví, majetku a štěstí. Albatros Media a.s., 2010]

Recommended Literature:

ARIELY, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. New York, NY: Harper. [česky: ARIELY, D. 2009. Jak drahé je zdarma : proč chytří lidé přijímají špatná rozhodnutí : iracionální faktory v ekonomice i v životě. Vyd. 1. Praha: Práh, 2009. ISBN 978-80-7252-239-2]

Behavioral Insights Team (2014). EAST: Four simple ways to apply behavioral insights. https://38r8om2xjhhl25mw24492dir-wpengine.netdna-ssl.com/wp-content/uploads/2015/07/BIT-Publication-EAST_FA_WEB.pdf.

CAMERER C. (2000): Prospect theory in the wild: Evidence from the field, In: Choices, Values, and Frames. Contemporary Psychology. No.47. American Psychological Association, Washington, DC, pp. 288-300. ISBN 9780521621724.

DHAMI, Sanjit S. (2019). The foundations of behavioral economic analysis. Volume 1, Behavioral economics of risk, uncertainty, and ambiguity. Oxford: Oxford University Press. ISBN 9780198835608.

DOLAN, P. et al. (2010). Mindspace: Influencing Behaviour through Public Policies. London: Cabinet Office and the Institute for Government.

KAHNEMAN, D., KNETSCH, J.L., THALER, R.H. (1991). Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias, The Journal of Economic Perspectives, 5(1), pp. 193-206, Winter.

KAHNEMAN, D., KNETSCH, L.J. and THALER, R. (1990). "Experimental Tests of the Endowment Effect and the Coase Theorem." Journal of Political Economy 98 (6): 1325-1348.

KRPAN D, GALIZZIM M and DOLAN P. (2019). Looking at Spillovers in the Mirror: Making a Case for “Behavioral Spillunders” Front Psychol 10:1142doi: 103389/fpsyg201901142

SAMSON, A. (2016). The Behavioral Economics Guide. Behavioral economics.

SCHMIDT, AT, ENGELEN, B. (2020). The ethics of nudging: An overview. Philosophy Compass. 2020; 15: e12658. https://doi.org/10.1111/phc3.12658

SUNSTEIN, Cass R. and THALER, R. (2003), Libertarian Paternalism Is Not an Oxymoron, The University of Chicago Law Review, Vol 70, No.4.

SUNSTEIN,Cass R. (2020). Behavioral Science and Public Policy. Cambridge University Press, number 9781108972789.

THALER, R. H. (2015). Misbehaving: The Making of Behavioral Economics. W W Norton & Co. [česky: THALER, R. H. (2017) Neočekávané chování: příběh behaviorální ekonomie. Argo]

WILKINSON, N. - KLEAS, M. (2012). An Introduction to Behavioral Economics. Palgrave.

Study Control:

Prerequisites for completing the course are (1) preparation for lectures and active participation in teaching activities. Students must have read articles and processed assignments intended for discussion. Part of the duties is (2) elaboration and submission of a seminar paper on the topic of the selected presentation in the range of 15 standard pages of continuous text (upload to the Moodle course page), (3) presentation of a seminar paper and (4) elaboration of 2 critical reflections in the range of 3.000 to 5.000 characters each, spaces included, references excluded

(1) Preparation for Lectures

A list of compulsory and recommended home study literature is prepared for each lecture. The selection of literature seeks to cover key aspects of the topic. The texts will be discussed; therefore, it is absolutely necessary to read them in advance and prepare any questions and suggestions for discussion. It is not necessary to read all the case studies, they mainly serve as illustrations of the discussed topic and inspiration for the processed presentations, two critical reflections and seminar paper.

(2) + (3) Seminar Paper and its Continuous Presentations

1. Specification of the public and social policy issue

(description of the selected problem, its topicality and the tree of causal relations in the range of 3-4 pages),

2. Strategy, Goals, Methodology, Theoretical-conceptual framework

(proposal of a suitable behavioral policy design with 5-10 solution variants in the range of 3-4 pages)

3. Effectiveness evaluation

(description of how the results obtained will be evaluated in terms of effectiveness, i.e cost-benefit analysis, technical feasibility, political viability, acceptance among course participants, in the range of 3-4 pages)

4. Finalization

(proposal of a clear and convincing solution for the selected problem, a discussion of the advantages and disadvantages of the selected design and the reasons for its choice. (3-4 pages)

The seminar paper must be submitted in electronic form to the address radek.kovacs@fsv.cuni.cz. The subject of the email must contain the course code in square brackets, i.e [JSM732], otherwise it will not be entered correctly. The fi