Psychology of Economic Life

This information is for the 2021/22 session.

Teacher responsible

Prof Saadi Lahlou 

Dr Frédéric Basso 


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

Course content

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), The course 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.


Michaelmas Term: 20 hours of lectures; 8 x weekly seminar sessions of 2 hours and 1 x workshop of 3 hours. Lent Term: 6 hours of lectures, 4 hours of seminars and two workshops of 3 hours. 

Formative coursework

Students will be expected to produce two PB403 mini-essays that precede each summative assessment.

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%, 2000 words) in the MT.
Essay (50%, 5000 words) in the ST.

The 2000-word PB403 essay is an individual essay which will be marked separately. 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)


Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Important information in response to COVID-19

Please note that during 2021/22 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the differing needs of students in attendance on campus and those who might be studying online. For example, this may involve changes to the mode of teaching delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.

Key facts

Department: Psychological and Behavioural Science

Total students 2020/21: 37

Average class size 2020/21: 13

Controlled access 2020/21: Yes

Value: One Unit

Guidelines for interpreting course guide information

Personal development skills

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