Psychology of Economic Life

This information is for the 2017/18 session.

Teacher responsible

Prof Saadi Lahlou QU 3.26

Additional teacher(s): Dr Frédéric Basso QU 3.1.4


This course is compulsory on the MSc in Psychology of Economic Life. This course is not available as an outside option.

Course content

Human activity is goal-oriented and social; it is evaluated at individual level in terms of emotions and well-being.–a heritage of our Primate nature. Humans have now grown outside of the initial “natural” ecological condition of small tribes of hunters-gatherers to which their body and psyche were adapted. They have socially constructed socio-economic systems (“Production-Consumption Systems” –PCS). In these PCS, individual satisfaction and resources are obtained through participating into a labor division following institutional rules. While this institutionalized system enables canalizing positively some explosive characteristics of humans (competition, hierarchy, preference for the present etc.), the growth of such PCS in a limited world poses urgent problems of sustainability.

Some of the most blatant limitations to the current system come from human drives (competition, aggression, desire for more, inter-group rivalry, short-termism, etc.).

The problem addressed by the Psychology of Economic Life is therefore to explore new ways of constructing sustainable PCS, and to manage the transition from the current state to a more sustainable one. This exploration must be informed by a realistic psychology, which is the object of this course.


The course is delivered in Michaelmas Term over 10 lectures of 2h (2 per week, over weeks 1 to 5); 5 weekly seminar sessions of 1.5 hours (weekly over weeks 1 to 5) and three special seminar sessions of 2 hours (weeks 7, 8, 9). Students taking PS465 will also be required to attend PS443A lectures, 10 x 120 mins (MT), and 9 x 60 mins seminars/discussion groups (MT).


Week 1:

Lecture 1: Introductory lecture. Course narrative [SL]

Lecture 2: Societal psychology, economics and installation theory [SL]

Week 2

Lecture 3: Organisations and Markets [FB]

Lecture 4: The cognitive side of economic life (1): From procedural rationality to heuristics in decision-making [FB]

Week 3:

Lecture 5: Representations and Institutions.  [SL]

Lecture 6: Installation Theory, Advanced. [SL]

Week 4

Lecture 7: Motivation at Work [FB]

Lecture 8: The socio-cognitive side of economic life:  Thinking about other individuals [FB]

Week 5:

Lecture 9: Transactions and platforms: what is exchanged in interaction? [SL]

Lecture 10: Change processes: principles, forms; theories and practice [SL]

The lectures will be delivered in weeks 1 to 5 so the weeks from 6 to 10 can be used to prepare the case that will be used for the essay.

Formative coursework

Students will be expected to produce 1 quiz and 1 mini-essay in the Michaelmas Term.

The Quiz will be a multiple choice question formative exam (based on content of PS443A).

Indicative reading

There is no single text for PS465 but one may find the following texts useful.

Barkow, J., Cosmides, L., & Tooby, J. (1992). The adapted mind: Evolutionary psychology and the generation of culture. New York: Oxford University Press. Oxford University Press.

Diamond, J. (2005). Collapse. How societies choose to fail or succeed. New York: Penguin Books.

Goffman, E. (1959). The presentation of self in everyday life. New York: Doubleday Anchor books.

Himmelweit, H. T. & Gaskell G. (1990). Societal psychology. London: Sage Publications, Inc.

Johansson, T. (2000). Social Psychology and Modernity. Buckingham & Philadelphia: Oxford University Press.

Kahneman, D. (2011). Thinking, fast and slow. New York: Farrar, Straus and Giroux.

Lahlou, S. (n.d.). (2017) Installation Theory. The societal construction and regulation of individual behaviour. Cambridge: Cambridge University Press.

Lewis, A. (Ed.). (2008). The Cambridge Handbook of Psychology and Economic Behaviour. Cambridge: Cambridge University Press.

Lewis, A., Webley, P., & Furnham, A. (1995). The New Economic Mind. Hemel Hempstead: Harvester/ Wheatsheaf Books.

Farr, R. M. (1997). “The new economic mind: The social psychology of economic behavior: A. Lewis, P. Webley, and A. Furnham (eds.)” Book review. Journal of Economic Psychology, 18(6), 713-717.

Mead, G. H. (1934). Mind, self & society: from the standpoint of a social behaviorist. Chicago: The University of Chicago press.

Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. New Haven & London: Yale University Press.

Webley, P., Burgoyne, C., Lea, S., & Young, B. (2001). The Economic Psychology of Everyday Life. Hove & Philadelphia: Psychology Press


Exam (25%, duration: 1 hour) in the LT week 0.
Essay (75%, 5000 words) in the MT.

The exam is a seated Multiple Choice Question based on PS443A. The exam is individual.

The essay is written in groups.

Assessment is part of the learning process. Students must demonstrate their knowledge of theories learned in the course, and apply them to analyse a real case of economic phenomenon (business model, organization, public policy…) -and eventually propose realistic recommendations for an improvement of sustainability. The case must be different from cases studied in the option courses, and from the dissertation. This work is collective. The students will be assembled in groups and produce a case study collectively. The  group essay is collectively marked by group; but students will also be asked requested to write a 1000 words individual short essay individually marked.

Both assessments are prepared by an unmarked formative.

Key facts

Department: Psychological and Behavioural Science

Total students 2016/17: 20

Average class size 2016/17: 20

Controlled access 2016/17: No

Value: One Unit

Guidelines for interpreting course guide information

Personal development skills

  • Self-management
  • Team working
  • Problem solving
  • Communication
  • Specialist skills