Behavioral Economics is a new field in economics which looks at how psychology, cognition, emotions and other factors affect economic decision-making. This is in stark contrast to classical theory that assumes a theoretical model of purely rational actors, or “homo economicus” in the words of Richard Thaler, the University of Chicago professor who wrote the book we will use: Misbehaving, The Making of Behavioral Economics (W.W. Norton & Company, 2015). Thaler received the 2017 Nobel Prize in Economics for his
contributions to the field. In Misbehaving, Thaler presents an engaging and first hand tour of the development of this new field from 1970 to the present, including the battles with classical theorists. Along the way, he also describes many of the ways that classical theory’s failure to consider the imperfection and “misbehaving” of actual human behavior results in incorrect economic predictions. If you are interested in learning how a new academic discipline developed, or to change the way you think about economics, ourselves and our world, join us. Use of Canvas is required. No class on 05/25/20.