MG452      Half Unit
Behavioural Economics for Management

This information is for the 2025/26 session.

Course Convenor

Prof Kristof Madarasz

Availability

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. This course uses controlled access as part of the course selection process.

How to apply:

Places on oversubscribed courses will be allocated via a random ballot process with priority given to students with the course in their Programme Regulations, followed by other Department of Management students, then students from elsewhere in the school. Providing you apply before the Department deadline of 10am on Monday 29 September 2025, the time you applied will not be taken into account. Please be aware that places on high demand courses cannot be guaranteed. By submitting an application, students are confirming that they meet any pre-requisites specified. Providing an additional written statement will not aid a student’s chances of being accepted onto a course, and statements are not read.

For further information and updates on course availability during Week 1, please see the Department of Management Electives Moodle page.

Deadline for application:

Please apply by 10am on Monday 29 September 2025 with your first course choices. No allocations are made before this date and time.

For queries contact:

Please view the Department of Management Electives page for contact emails.

This course may be capped/subject to controlled access. For further information about the course's availability, please see the MG Elective Course Selection Moodle page (https://moodle.lse.ac.uk/course/view.php?id=3840).

Requisites

Additional requisites:

Advanced Microeconomics, Game Theory or Managerial Economics, Advanced 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 and Risk Attitudes.  
  2. Intertemporal Choice.  
  3. Social Motivation.
  4. Processing Information and Mistakes in Cognition. 
  5. Projective Strategic Thinking. 
  6. Well-being and Mental Health. 

Teaching

30 hours of seminars in the Autumn Term.

This course has a reading week in Week 6 of Autumn Term.

In its Ethics Code, LSE upholds a commitment to intellectual freedom. This means we will protect the freedom of expression of our students and staff and the right to engage in healthy debate in the classroom.

Formative assessment

A mock exam comprising of problem sets.

 

Indicative reading

  • Camerer, 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

Assessment

Exam (100%), duration: 120 Minutes in the Spring exam period


Key facts

Department: Management

Course Study Period: Autumn Term

Unit value: Half unit

FHEQ Level: Level 7

CEFR Level: Null

Total students 2024/25: Unavailable

Average class size 2024/25: Unavailable

Controlled access 2024/25: No
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