The world is currently facing serious challenges such as climate change, an energy crisis, obesity, an aging population or poverty. These problems are caused by how we deal with limited natural resources like our environment and health. Finding solutions to these issues should be of high priority. While governments started to impose hard measures such as laws and regulations, behavioral economics offers a softer approach. By combining the fields of economics and psychology, behavioral economics analyses human behavior and decision-taking with its underlying biases. Based on these insights, it nudges people towards a more sustainable use of limited resources. As a result, people take better decisions for themselves, society, and the world.

This course explores the theoretical key concepts (Prospect Theory, Cognitive Biases) of behavioral economics and goes into detail concerning existing and future fields of applications. In the end students will apply the gained knowledge to develop their own nudging approach to tackle a global challenge. 

Course outline:

Session 1: Introduction to behavioral economics

Session 2: Prospect theory

Session 3: Cognitive biases

Session 4: Interim presenations

Session 5: Methodological approaches, nudging & nudge units

Session 6: Final assignment

At the end of the course students will

• know and understand the theoretical key concepts in the field of behavioral economics
• be familiar and able to critically assess existing applications of behavioral economics
• have the skills to employ theoretical concepts to real-life issues

In addition, students will

• work in diverse team-settings
• be able to explain and present complex topics to an audience in an understandable way
• give constructive feedback on others' presentations
• think outside the box to come up with new application fields

As this is a highly interactive class regular attendance is mandatory. In-class discussions play a vital role in the course design and they can only be fruitful if everyone attends and contributes on a regular basis.

You may miss one session, but be aware that this will affect your class participation and, as a result, may affect your final grade. If you miss more than one session, you will be deregistered from the course. 

The final grade of the students participating in the course will be based on the following:

• participation in class as well as quizzes after class: 30% (individual)
• presentation of an assigned nudge application: 20% (team)
• presentation and report of an own nudging idea: 30% (team)
• peer rating: 10% (individual)
• course reflection: 10% (individual)

Final grading:

       ≥ 90%...1

       ≥ 80%...2

       ≥ 70%...3

       ≥ 60%...4

       < 60%...5

SBWL students must have successfully completed course I (Foundations of IB) and II (IB Applications) of the specialization.

Exchange students need a basic understanding of economics.