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Behavioral Economics

  • Teacher(s):   L.Santos Pinto  
  • Course given in: English
  • ECTS Credits: 6 credits
  • Schedule: Autumn Semester 2021-2022, 4.0h. course (weekly average)
  •  sessions
  • site web du cours course website
  • Related programmes:
    Master of Science (MSc) in Economics

    Maîtrise universitaire ès Sciences en management, Orientation Behaviour, Economics and Evolution

    Master of Science (MSc) in Management, Orientation Marketing

    Master of Science (MSc) in Management, Orientation Business Analytics

    Master of Science (MSc) in Management, Orientation Strategy, Organization and Leadership
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In the last three decades there has been a behavioral revolution in Economics and Finance. This revolution came into age when the 2002 Nobel Prize in Economics was attributed to Daniel Kahneman and Vernon Smith. In 2017, Richard Thaler won the Nobel prize in Economics for his innovative and pathbreaking research in Behavioral Economics. Courses in Psychology and Economics, Behavioral Economics, or Behavioral Finance are now offered regularly in most top US and European graduate programs and many students choose to specialize in these fields. The purpose of this course is to make masters students at UNIL acquainted with both seminal contributions as well as frontier research in Behavioral Economics.


1. Introduction 1.1. What is Behavioral Economics? 1.2. Five Lessons from Behavioral Economics

2. Choice under Uncertainty 2.1. Expected Utility Theory 2.2. Behavioral Facts 2.3. Behavioral Theories 2.4. Rank Dependent Utility 2.5. Prospect Theory 2.6. Reference-Dependent Preferences 2.7 Salience Theory

3. Buyers, Sellers and Markets 3.1. The Endowment Effect 3.2 Explaining the Endowment Effect 3.3. Applications of Loss Aversion 3.4. Bounded Rationality 3.5. Obfuscation and Information Suppression

4. Intertemporal Choice 4.1. The Standard Dynamic Decision Theory Model 4.2. Behavioral Facts: Self-Control Problems, Preference for Immediate Gratification 4.3. Quasi-Hyperbolic Discounting 4.4. Applications: Addiction, Savings, Obesity, Smoking, Contract Design and Self-Control 4.5. Other Approaches to Intertemporal Choice

5. Self-Confidence and Motivation 5.1. Behavioral Facts 5.2. Behavioral Theories 5.3 Applications: Markets and Organizations

6. Behavioral Game Theory 6.1. Experimental Evidence for Limited Strategic Thinking in Humans 6.2. Non-Equilibrium Theories of Behavior in Games: Level-k Models 6.3. Applications: Auctions and Entry Games

7. Conclusion 8.1. Appraisals of Behavioral Economics 8.2. Criticisms of Behavioral Economics 8.3. Where do We Go from Here?


Most of the lectures will follow papers. However, there are three textbooks in Behavioral Economics that cover several topics of the course:

*Dhami, Sanjit, The Foundations of Behavioral Economic Analysis, Oxford University Press, 2016.

Wilkinson, Matthias Klaes, An Introduction to Behavioral Economics, Palgrave MacMillan, 2012.

Angner, Erik, A Course in Behavioral Economics, Palgrave MacMillan, 2012.

*Spiegler, Ran, Bounded Rationality and Industrial Organization, Oxford University Press, 2011.

*Wakker, Peter P., Prospect Theory for Risk and Ambiguity, Cambridge University Press, 2010.

Ariely, Dan, The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home, Harper Collins, 2010.

Ariely, Dan, Predictably Irrational: The Hidden Forces that Shape our Decisions, Harper Collins, 2008.

*Camerer, Colin, George Lowenstein and Mathew Rabin. Advances in Behavioral Economics, Russel Sage Foundation and Princeton University Press, 2004.

*Camerer, Colin, Behavioral Game Theory: Experiments in Strategic Interaction, Russell Sage Foundation and Princeton University Press, 2003.

*Kahneman, Daniel and Amos Tversky. Choices, Values and Frames, New York: Russell Sage Foundation; Cambridge, U.K.; New York: Cambridge University Press, 2000.

Thaler, Richard H. The Winner’s Curse: Paradoxes and Anomalies of Economic Life, Princeton University Press, 1994.

Elster, Jon and George Loewenstein. Choice over Time, Russell Sage Foundation, 1992.

Thaler, Richard. Quasi Rational Economics, New York, N.Y.: Russell Sage Foundation, 1991.

Kahneman, Daniel, Paul Slovic, and Amos Tversky, eds., Judgment under Uncertainty: Heuristics and Biases, Cambridge University Press, 1982.


Microeconomic Theory (Analyse économique: Microéconomie)


First attempt

Without exam (cf. terms)  

Take-home problem sets (60%) + presentation of a journal article (40%). Because of the health evolution related to COVID-19, the study plans may be adapted during the semester.


Written 3h00 hours
Not allowed
Not allowed

If you fail the course, you have to make the retake exam which counts for 100%

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