The Psychology of Choice - Experimental Theory and Methods

Course content

All through our life, we have to make decisions. Whether it is attending to the signal at a crossing, finding a spouse, or investing hard earned money, the common denominator is the choice between options of different values. How we perceive the value of an option depends on how the option is processed by our cognitive system. To understand human decision-making it is therefore crucial to understand human cognition.

Explanations and predictions of people’s choices, in everyday life as well as in the social sciences, are often founded on the assumption that humans are rational. The definition of rationality has been much debated, but there is general consensus that rational choices should satisfy some elementary requirements of consistency and coherence in the assessment of values. In this course we will study decision problems in which people systematically violate these requirements of consistency and coherency, and we trace the violations to the psychological principles that govern the perception of decision problems and the evaluation of options.

The course will provide an overview of the field by focusing on the most central topics and experiments. Some of the topics we will focus on during the course are attention limitations, anchoring, loss aversion, bounded recursive thinking, the importance of context and reference points, and mutual mental states. The impact and relevance of seminal research in each of these topics will be made clear through hands-on experimental experience.

Education

MSc programme in Economics – elective course

 

Learning outcome

Content level:This course aims at introducing students to the interdisciplinary field of `the psychology of choice´, be it dependent (strategic) or independent of others’ choices (non-strategic). This interdisciplinary field has received wide recognition in recent years, for example by the award of the Nobel Prize in Economics 2002 to the psychologist Daniel Kahneman and the economist Vernon Smith. During the course students will learn how to investigate complex human behavior by means of empirically testable hypotheses and experiments. Students should understand how psychologists and economists attempt to understand the microfoundations of human choice behavior. Furthermore, it should provide an in-depth overview of the most important seminal works in the aforementioned topics covered during the course.

Methodological level: Students should learn to critically assess and relate the diverse ideas, concepts and theories developed in psychology and economics to explain humans’ choice behavior. Furthermore, they should learn (i) how experiments are used in social sciences to investigate human choices and (ii) how to analyze and present their results in a simple / clear, but not superficial way.

 

The course has three elements:
- Demonstration experiments: Students participate in demonstration experiments based on the above-mentioned topics.
- One assignment: During the course each student has to analyze with a small group of other students the data from one demonstration experiment, reflect on possible explanations for the observed behavior and present the results to the rest of the class.
- Lectures: We discuss seminal research, and explain the relevance of the demonstration experiments and how the data compares to findings in the literature.

Syllabus will appear from The course website in absalon

 

Sound knowledge of statistical methods and tests from e.g. Probability theory and statistics (Sandsynlighedsteori), Econometrics I, Statistik I and II or equivalent.

Schedule:
2 hours lectures 1 to 2 times a week from week 36 to 50 (except week 42).

The overall schema for the Master is https:/​/​intranet.ku.dk/​economics_ma/​courses/​CourseCatalogue-E17/​Courseschema/​Pages/​default.aspx

Timetable and venue:
To see the time and location of lectures and exercise classes please press the link under "Se skema" (See schedule) at the right side of this page. E means Autumn.

You can find the similar information partly in English at
https:/​​​​​​/​​​​​​skema.ku.dk/​​​​​​ku1718/​​​​​​uk/​​​​​​module.htm
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E17; [Name of course]””
-Select Report Type: “List – Weekdays”
-Select Period: “Efterår/Autumn – Weeks 31-5”
Press: “ View Timetable

ECTS
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Individual exam at the computers of Copenhagen University.
The exam assignment is in English and must be answered in English.
Aid
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
if chosen by the Head of Studies.
Criteria for exam assessment

Students are assessed on the extent to which they master the learning outcome for the course.

To receive the top grade, the student must be able to demonstrate in an excellent manner that he or she has acquired and can make use of the knowledge, skills and competencies listed in the learning outcomes.

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • English
  • 206