Not available in 2022/23
MG452      Half Unit
Behavioural Economics for Management

This information is for the 2022/23 session.

Teacher responsible

Dr Kristof Madarasz MAR 6.10


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 Economics and Management and MSc in Management and Strategy. This course is available with permission as an outside option to students on other programmes where regulations permit.


Graduate level Microeconomics, Game Theory or Managerial Economics, Graduate level Econometrics or Quantitative Analysis is required.

Course content

The course covers formal (mathematical) models of behavioural economics and discusses both experimental and field evidence that motivate and test various aspects of these models.

This course is a post-graduate introduction to behavioural economics and strategy. The topics to be discussed are

1. Risk Perceptions, Loss Aversion and Reference-Dependence.

2. Procrastination, Self Control and Choice over Time.

3. Social Motivation: Image, Reciprocity and Inequity.

4. Processing Information and Mistakes in Cognition.

5. Naivite and Heuristics in Strategic Thinking.

6. Happiness and Welfare.


20 hours of lectures in the LT. 2 hours of lectures in the ST.

Students on this course will have a reading week in Week 6, in line with departmental policy.

Formative coursework

A mock exam comprising of problem sets.

Indicative reading

CamererCamerer, Colin, Linda Babcock, George Loewenstein, and Richard Thaler (1997) "Labor Supply of New York City Cabdrivers: One Day at a Time," Quarterly Journal of Economics

Fehr Ernst and Simon Gachter (2002) Fairness and Retaliation: The Economics of Reciprocity Journal of Economic Perspectives, 2000 (14); 159-181.

Kahneman, Daniel, and Amos Tversky (1979) "Prospect Theory: An Analysis of Decision under Risk" Econometrica, 47(2): 263-292.

Koszegi, B. and Matthew Rabin (2006) Reference-Dependent Preferences. Quarterly Journal of Economics

Laibson, David. (1997) Golden Eggs and Hyperbolic Discounting. Quarterly Journal of Economics

List, John A. 2004. "Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace," Econometrica, 72(2): 615-625.

Madarasz, Kristof (2012) Information Projection: Model and Applications. Review of Economic Studies

Thaler, Richard and Shlomo Benartzi (2004). Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving, Journal of Political Economy.

Rabin, Matthew (2002) Inference by the Believers in the Law of Small Numbers. Quarterly Journal of Economics

Stortz, Richard. (1955) Myopia and Inconsistency in Dynamic Utility Maximization. Review of Economic Studies


Exam (100%, duration: 2 hours) in the summer exam period.

Key facts

Department: Management

Total students 2021/22: Unavailable

Average class size 2021/22: Unavailable

Controlled access 2021/22: No

Value: Half Unit

Guidelines for interpreting course guide information

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.

Personal development skills

  • Team working
  • Problem solving
  • Application of information skills
  • Communication
  • Application of numeracy skills