Participants learn about boundedly rational aspects of human behaviour which play a key role in predicting and designing individual and strategic decisions as well as aggregate outcomes in markets and politics. Further they learn to apply the insights generated by a boundedly rational approach to various fields in Public Economics, Competition Policy, and Managerial Economics, among others.

This course will cover recent behavioural models of intertemporal decision-making, decisions under risk and uncertainty, and social decision-making. We will discuss recently developed models taking the bounded rational nature of human decisions into account. The course uses theoretical reasoning which will guide the analysis of applied questions from diverse fields. The fields of application may comprise savings and retirement decisions, health insurance, public good provision and environmental issues, charity giving, taxation, cartel formation, whistle blowing, incentives and promotion schemes in firms, among others. An important part of the course will be devoted to discussions of policy implications, policy recommendations, and the need or curse of government intervention. 1-2 meetings will be devoted to discussions with guests from institutions responsible for implementing and/or evaluating policies in practice (e.g. the Ministry of Finance or regulation authorities).