Behavioural Economics course for school students

At various stages of my teaching I have delved into the area of Behavioural Economics as it is part of the CIE A2 course and from a personal interest perspective. I have attached a course booklet that consists of lesson plans on various topics and resources that are required to supplement the course. Click below to download the course notes and workbook. If you would like the PowerPoints that complement the course please email me – m.johnston@kingscollege.school.nz – and I will forward them on. Ideal for those Friday afternoon classes.

Behavioural economics is about bringing reality into economic analysis. It borrows from psychology, sociology, politics, and institutional economics (which focuses on the rules of the economic game) to describe and explain human behaviour and economic phenomena. Behavioural economics builds upon conventional economics, offering more tools for understanding why people behave the way they do when it comes to income, wealth, ethics, and fairness. It uses prospect theory to describe the choices that the typical person makes. The course is split up into 4 topics and is designed for approximately 12 periods in length.

1. Understanding Choice

Free choice in Economic Decision Making – Nudging – Anchoring and Framing – Free – Placebo Effect – Paradox of Choice – Loss Aversion and Endowment Effect – Conventional v Behavioural Economics

2. Ethics and Economic Growth

Ethical Behaviour – definition – Milton Friedman and ethical behavior – The Conventional – Perspective on Ethical Behaviour and the Economy – A Good Company – Ethics / – Happiness – Examples of Companies with socially responsible norms – Ethics and Profits
Ethical consumers

3. Behavioural Finance

Definition – what is it? – Efficient Market Hypothesis – Random Walk Hypothesis – Irrational Exuberance – Bubbles and Busts – Tulip – Great Crash – Dot.com – 2008 Global – Financial Crisis – Causes of Bubbles

4. Game Theory

Introduction to Game Theory – Football – Penalty Shoot outs – Golden Balls Game Show

5. Money and Happiness

Conventional Theory – Money = Happiness – Measuring Happiness – Gross Domestic Product v Gross National Happiness – Diminishing Returns for Income and Wealth
Easterlin Paradox: Money doesn’t buy happiness
– The Hedonic Treadmill – Money leads to more happiness but not for too long – Differences in happiness between countries – Government Policy and Happiness- Smarter Spending

Sources:

Behavioural Economics for Dummies – Morris Altman
Thinking, Fast and Slow – Daniel Kahneman
Economic Naturalist – Robert Frank
Nudge – Richard Thaler & Cass Sunstein
Inside Job – DVD
Black Gold – DVD
The Corporation – DVD
How Algorithms Shape our World – TED Talk

Leave a Reply

Your email address will not be published. Required fields are marked *