Foundations of Behavioural Economics

Course content

Why do people volunteer and donate to charitable causes? Why do we often eat unhealthy food, exercise too little, and struggle with completing important tasks in a timely manner? Why do most people think that they are better-than-average car drivers, entrepreneurs, lovers, ... ?  From the perspective of conventional economic theory, these questions are difficult to answer. Behavioral Economics is an attempt to shed light on these and other puzzling phenomena. By enriching the traditional economic model with an empirically more accurate foundation of human behavior, Behavioral Economics aims at improving the predictive power of economic models and the resulting policy recommendations.

In this course, we will discuss the psychological foundations of human behavior and their economic implications. The course builds on the introductory course “Psychology of Choice” and lays the foundations for subsequent field courses in which insights from behavioral economics are applied to different areas of economic research (e.g., Behavioral Finance, Science of Behavior Change, or Behavioral Public Economics).

In the course, we will present the empirical regularities that have inspired the development of Behavioral Economics, analyze the key theoretical models that have been brought forward, and discuss a number of applications where insights from Behavioral Economics have contributed to a better understanding of individual behavior and market outcomes.

The course will focus on the following topics:

  • Fairness and Social Preferences

  • Reference-Dependent Preferences and Loss Aversion

  • Present-Biased Preferences and Limited Self Control

  • Limited Cognitive Resources and Attention

  • Behavioral Economics, Market Interactions, and Economic Policy


MSc programme in Economics – elective course


Learning outcome

After having successfully completed the course, students should be able to


  • understand central theoretical insights and empirical research results in behavioral economics.

  • understand how economic theory, lab and field experiments,and other complementary empirical methods can be used to address research questions in behavioral economics.


  • interpret and critically assess theoretical and empirical studies at the intersection of economics and psychology.

  • put the results of these studies into perspective and identify limitations of the existing body of knowledge.


  • apply behavioral economic insights to theoretical problems and practical empirical questions.

  • The course also equips the students with the necessary tools and skills to continue working on behavioral economic topics in seminars or Master’s theses.


Lectures will supplemented with a number of guided practice sessions. In the practice sessions, we will discuss problem sets and homework assignments. Assignments will consist of theoretical exercises and empirical case studies through which the students can deepen and apply the knowledge acquired in the lecture.
Student participation and an active discussion will be expected and encouraged.

The course will be based on lecture notes and research papers, as well as selected handbook chapters and survey articles. A detailed syllabus with required readings will be provided in the beginning of the course.

The following survey articles provide an excellent introduction to the literature.

  • Rabin, M. (1999). Psychology and Economics. Journal of Economic Literature, 36: 11-46.

  • DellaVigna, S. (2009). Psychology and Economics: Evidence from the Field. Journal of Economic Literature, 47: 315-372.

A thorough knowledge of microeconomic theory (especially game theory and contract theory), microeconometrics and econometrics as in the bachelor programme of Economics are required. In particular, it is strongly recommended that Microeconomics III have been followed prior to taking this course. Ideally, students should also have attended the interdisciplinary course on “The Psychology of Choice”.

2 hours lectures 1 to 2 times a week from week 6 to 20 (except holidays).

Timetable and venue:
To see the time and location of lectures please press the link/links under "Se skema" (See schedule) at the right side of this page (F means Spring).

You can find the similar information in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F19; [Name of course]”
-Select Report Type: “List – Weekdays”
-Select Period: “Forår/Spring – Week 5-30”
Press: “ View Timetable”

The overall schema for the Master can be seen at KUnet:
MSc in Economics => "courses and teaching" => "Planning and overview" => "Your timetable"
KA i Økonomi => "Kurser og undervisning" => "Planlægning og overblik" => "Dit skema"

7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
The exam assignment is given in English and must be answered in English.
Without aids
Marking scale
7-point grading scale
Censorship form
No external censorship
The exam can be selected for external assessment.
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 with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material 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