B2813 - Behavioral Economics for Sustainable Systems

Learning outcomes

This course is intended to allow students to become familiar with the literature in behavioral economics and decision making. The course has two facets: first it will uncover the inner workings of human biases and judgment and the students will gain insights into how inherent bias or poorly structured information can affect business decisions. Second, it will discuss how the adoption of a behavioral economics approach will support managers and decision makers to cope both with economic sustainability of businesses and environmental and social sustainability.

Course contents

Introduction to Behavioral Economics and Sustainability

• Overview of key concepts in behavioral economics
• Importance of sustainability in modern business practices
• Interconnections between human behavior, economics, and sustainable development

Cognitive Biases and Decision Making

• Understanding common cognitive biases (e.g., anchoring, loss aversion, confirmation bias)
• Impact of biases on decision making in business and policy
• Strategies to mitigate biases in organizational settings

Behavioral Insights for Sustainable Business Practices

• Application of behavioral economics to promote sustainable consumption and production
• Case studies of businesses implementing behavioral strategies for sustainability
• Nudging and other behavioral tools to encourage sustainable behavior among consumers and employees

Policy Implications and Behavioral Interventions

• Designing policies that leverage behavioral economics for sustainability
• Evaluating the effectiveness of behavioral interventions in public policy
• Examples of successful behavioral policies in environmental and social sustainability

Readings/Bibliography

Thaler, R. and Sunstein, C. (2009) Nudge: Improving Decisions about Health, Wealth and Happiness, London: Penguin.

Enste, Dominik; Wildner, Julia; Nafziger, Lucia (2021) : Going green with behavioural economics: How to combine business and ethics, IW-Report, No. 1/2021, Institut der deutschen Wirtschaft (IW), Köln

Additional readings will be provided by the teacher during the course.

Lecture notes:

The lecture notes will be made available on the IOL platform before each class (but might be corrected/updated shortly after the class). They should NOT be taken as the only reference, as they often do not cover the analytical details discussed in the manual, which are important for a thorough understanding of the subject matter.

Teaching methods

The course comprises both traditional lectures and a hands-on laboratory part.

Students will have the chance to play simple experiments in class. We will also discuss and analyze data from prominent research papers.

The class is designed to be highly interactive and students are expected to prepare presentations, videos/podcasts, and short essays.

Assessment methods

Attending students: the final grade will be determined by

• class participation, groups assignments and presentation: 50%
• final essay: 50%

Non attending students: will be evaluated with a written exam based on multiple choice questions and open questions.

The dates of the final exams are fixed and cannot be changed. Requests for additional dates will not be accepted.

The maximum possible grade is 30 cum laude. The grading scale is the following:

<18: Fail
18-23: Sufficient
24-27: Good
28-29: Very good
30: Excellent
30 cum laude: Outstanding (the instructor was impressed)

Grade rejection: students can reject the grade obtained at the exam only once. To this end, they must email a request to the instructor within the date set for registration. The instructor will confirm reception of the request asap.

Teaching tools

During the course, students will be involved in mock experiments, which should provide them with a more vivid idea of the issues to be examined later during the lecture, and active participation to the in-class discussion will be encouraged.

The mock experiments will be computer-based and will require the use of a pc, tablet or smartphone connected to the internet.

Office hours

See the website of Natalia Montinari