A Course in Behavioural Economics

by Erik Angner

Introduction

1. Introduction

  1. What is this book?
  2. The origins of behavioral economics
  3. Methods
  4. Looking ahead

I Choice Under Certainty

2. Rational Choice Under Certainty

  1. Introduction
  2. Preferences
  3. Rational preferences
    Box: Logical symbols
  4. Indifference and strict preference
    Box: How to do proofs
  5. Preference orderings
  6. Choice under certainty
  7. Utility
    Box: A final word about proofs
  8. Discussion

3. Decision-making Under Certainty

  1. Introduction
  2. Opportunity costs
  3. Sunk costs
  4. Menu dependence and the decoy effect
  5. Loss aversion and the endowment effect
  6. Anchoring and adjustment
  7. Discussion

II Judgment Under Risk and Uncertainty

4. Probability Judgment

  1. Introduction
  2. Fundamentals of probability theory
  3. Unconditional probability
    Box: Odds
  4. Conditional probability
  5. Total probability and Bayes's rule
  6. Bayesian updating
  7. Discussion

5. Judgment Under Risk And Uncertainty

  1. Introduction
  2. The gambler's fallacy
  3. Conjunction and disjunction fallacies
  4. The Three-Step Technique - Steps 1 and 2
  5. Base-rate neglect
  6. Confirmation bias
  7. Availability
  8. Discussion

III Choice under risk and uncertainty

6. Rational Choice Under Risk and Uncertainty

  1. Introduction
  2. Uncertainty
  3. Expected value
  4. Expected utility
  5. Attitudes toward risk
  6. Discussion

7. Decision-Making under Risk and Uncertainty

  1. Introduction
  2. Framing effects in decision-making under risk
  3. Bundling and mental accounting
  4. The Allais problem and the sure-thing principle
  5. The Ellsberg problem and ambiguity aversion
  6. Probability weighting
  7. Discussion

IV Intertemporal Choice

8. The Discounted Utility Model

  1. Introduction
  2. Interest rates
  3. Exponential discounting
    Box: Discount rates
  4. Discussion

9. Intertemporal Choice

  1. Introduction
  2. Hyperbolic discounting
  3. Choosing not to choose
  4. Preferences over profiles
  5. Discussion

V Strategic Interaction

10. Analytical Game Theory

  1. Introduction
  2. Nash equilibrium in pure strategies
  3. Nash equilibrium in mixed strategies
  4. Equilibrium refinements
  5. Discussion

11. Behavioral Game Theory

  1. Introduction
  2. Social preferences: altruism, envy, fairness, and justice
  3. Intentions, reciprocity, and trust
  4. Limited strategic thinking
  5. Discussion

VI Concluding Remarks

12. General Discussion

  1. Introduction
  2. Behavioral welfare economics
  3. Assessing behavioral economics
  4. Conclusion