Psychology of Economic Life

This information is for the 2019/20 session.

Teacher responsible

Prof Saadi Lahlou QUE 3.26

Dr Frédéric Basso QUE 3.14


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

Course content

PB403 Psychology of Economic Life presents a social psychological approach different and complementary to the rational choice models which depict economic actors as information processors whose behaviour can be understood independently of specific contexts.

Framed by our distinctive approach to economic psychology (articulating history of thought and contemporary analyses), PB403 pays particular attention to the social environments that enable and support positive behaviour change in settings characterised by cultural diversity, a need for sustainability and alternative models to growth.

Beyond Homo Economicus, we consider Homo Sapiens with its rationality, but also with its embodied, emotional, social and cultural dimensions as well as the cognitive characteristics and drives inherited from evolution. Our framework acknowledges the importance of context and socio-technical constraints but uses psychology to explain social-psychological aspects of economic phenomena.

The problem addressed by the Psychology of Economic Life is therefore to explore new ways of constructing sustainable Production-Consumption Systems, and to manage the transition from the current state to a more sustainable one, taking into account actual humans (Homo Sapiens) rather than Homo Economicus. This exploration must be informed by a realistic psychology, with a critical but practical, constructive approach and concrete application to real cases, which is the object of this course.


The course is delivered in Michaelmas Term over 20h of lectures; 5 weekly seminar sessions of 2 hours and 2 special seminar sessions of 2 hours (between weeks 7 and 9). Students taking PB403 will also be required to attend PB400 lectures, 10 x 2h (MT), and 9 x 1h seminars/discussion groups (MT).

Formative coursework

Students will be expected to produce one PB403 mini-essay in the Michaelmas Term.

They will also be expected to prodice a 500-word annotated bibliography for any 2 readings from the first 3 lectures from PB400 the Michaelmas term.

Indicative reading

There is no single text for PB403 but one may find the following texts useful.

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

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. (2017) Installation Theory. The societal construction and regulation of individual behaviour. Cambridge: Cambridge University Press.

Laland, K. N., & Brown, G. R. (2011). Sense and nonsense: Evolutionary perspectives on human behaviour. Oxford 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.

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


Essay (50%, 5000 words), essay (30%, 2000 words) and essay (20%, 1500 words) in the MT.

The 5000-word PB403 essay is written in groups, which will be marked collectively (i.e. all students in one group will receive the same mark). The 2000-word PB403 essay is an individual essay which will be marked separately.

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.

Both assessments are prepared by an unmarked formative.

The 1500-word PB400 essay is annotated bibliography for any 6 readings from the fourth and subsequent lectures from PB400.

Key facts

Department: Psychological and Behavioural Science

Total students 2018/19: 34

Average class size 2018/19: 19

Controlled access 2018/19: No

Value: One Unit

Guidelines for interpreting course guide information

Personal development skills

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