MG455 Half Unit
Decisions, Biases and Nudges
This information is for the 2018/19 session.
Dr Barbara Fasolo
This course is compulsory on the MSc in Management Science (Decision Sciences). This course is available on the CEMS Exchange, Global MSc in Management, Global MSc in Management (CEMS MiM), Global MSc in Management (MBA Exchange), MBA Exchange, MSc in Marketing and MSc in Risk and Finance. This course is available as an outside option to students on other programmes where regulations permit.
This course is available as an outside option to students on all other Management and LSE programmes (both post-graduate and advanced undergraduate) where regulations permit, and is complementary to other behavioural courses offered at LSE.
It is an advantage to have had an introductory social science course in one of these fields: economics, management, psychology or sociology.
It is important to be comfortable with multi-disciplinary research
This course introduces students to Behavioural Decision Science: the science that explains and predicts how humans make decisions (the decision ‘process’) and how well (the decision ‘outcome’). The course will focus on the process, and unveil the subtle and sometimes unconscious influences played by our mind (biases) and the context in which decisions are faced: is there risk and uncertainty? What has been chosen in the past? Is the decision maker in a positive or negative mood? Is the decision made offline or online, from a “menu” or from memory? All of these (and more) are factors that often determine how information is searched before choosing, how decisions are made and the quality of the decision made.
The course is entirely seminar-based, and will alternate teaching with interactive activities designed to experience first-hand the process of decision making, before reviewing behavioural decision theories and evidence from lab and field studies. Teaching will cover experiments and applications across different ‘domains’ (managerial, policy, organisations, consumer, and even personal, like choice of career or a partner). The aim of the course is to offer a balanced view of the strengths and weaknesses that humans have when making any decision and cover successful interventions of “nudges”” which are being implemented around the world in private and public organisations to help consumers and the public make it easier to make good decisions without complex systems or support. The assessment will give students the opportunity to apply their skills to spot strengths and weaknesses of a decision of their choosing, as well as to produce a “state-of-art behavioural report” that reviews in a rigorous and scholarly manner the literature and empirical evidence on a specific aspect of the intuitive decision process under scrutiny.
25 hours of seminars in the LT.
Students on this course will have a reading week in line with departmental policy.
Students will be expected to produce 1 presentation and 1 exercise in the LT.
1. A short and timed group presentation (after Reading Week). You will work as a group and spot the biases in a real decision that you will select. You will give a brief group presentation of the biases and the mechanism that requires correction (via debiasing or nudging). After the presentation you will receive feedback as a group. This feedback will help you prepare for the summative assessment.
2. Individual review of an anonymous essay (End of LT). Students will play the role of the “assessor” and review an anonymous behavioural report (submitted by one of the students from a previous year) by implementing the different evaluation criteria which are used in this course. This exercise will help you review your and your course-mates’ behavioural reports, and improve your summative assessment.
- Ariely, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. Harper Collins.
- Bazerman, M. (2017) Judgment in Managerial Decision Making. New York: Wiley. 8th edition;
- Hastie, R., and Dawes, R.M. (2001). Rational Choice in an Uncertain World. Sage Publications, Thousand Oaks
- Hardman, D. (2009). Judgment and decision making: Psychological perspectives. Malden: Blackwell Publishing; Leicester, England: British Psychological Society
- Kahneman, D. (2011) Thinking Fast and Slow. London: Allen Lane;
- Melnikoff, D. E., & Bargh, J. A. (2018). The mythical number two. Trends in cognitive sciences, 22(4), 280-293.
- Russo, J. E. & Schoemaker, P. J. H. (2002) Winning decisions: How to make the right decision the first time, Piatkus Publ. Limited,
- Sunstein, C.R. Thaler, R.H. (2008) Nudge - New Haven, CT: Yale University Press
- Yates, F. J. (2003). Decision Management: How to Assure Better Decisions in Your Company. Jossey-Bass
Coursework (100%, 3000 words) in the ST.
Summative (due beginning of ST): The summative assessment will be a 'Behavioural Report' which comprises two parts. in the first part (no more than 1000 words), you will be asked to report on the decision, the bias and the nudging or debiasing intervention designed by you and your group. in the second part of the report (no more than 2000 words), you will focus on one of the processes/aspects that you covered in the first part of the essay and complete a scholarly review on it, with reference to behavioural literature, theories and concepts. the first part of the essay will count for 25% of your mark while 75% will come from the second part. You will be required to provide full essay-style referencing. Although the summative assignment will tackle decision makers' presented in groups, all students will write both parts of the summative essay on their own and receive an individual mark.
- team working
- problem solving
- application of information skills
Total students 2017/18: Unavailable
Average class size 2017/18: Unavailable
Controlled access 2017/18: No
Value: Half Unit
Personal development skills
- Problem solving
- Application of information skills