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2022/2023  KAN-CCMVI2121U  Applied Behavioral Economics: Experiments within Firms, Non-Profits, and Public Institutions

English Title
Applied Behavioral Economics: Experiments within Firms, Non-Profits, and Public Institutions

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration Summer
Start time of the course Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 60
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Luigi Butera - Department of Economics (ECON)
For academic questions related to the course, please contact course responsible Luigi Butera (lbu.eco@cbs.dk).
Main academic disciplines
  • Statistics and quantitative methods
  • Business psychology
  • Economics
Teaching methods
  • Blended learning
Last updated on 25-11-2022

Relevant links

Learning objectives
Students having successfully participated in the course are able to:
  • Understand what behavioral biases are and how they may affect people’s decisions.
  • Understand what monetary and non-monetary incentives are, and how they may affect people’s economic decisions.
  • Understand how different types of behavioral constraints affect people’s economic decisions, including psychological biases.
  • Ability to formulate testable research hypotheses.
  • Ability to identify ways to test hypotheses using experiments or existing data.
  • Ability to communicate scientific results.
Course prerequisites
A good understanding of microeconomics and econometrics
Applied Behavioral Economics: Experiments within Firms, Non-Profits, and Public Institutions:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Summer
Aids Closed book: no aids
However, at all written sit-in exams the student has access to the basic IT application package (Microsoft Office (minus Excel), digital pen and paper, 7-zip file manager, Adobe Acrobat, Texlive, VLC player, Windows Media Player), and the student is allowed to bring simple writing and drawing utensils (non-digital). PLEASE NOTE: Students are not allowed to communicate with others during the exam.
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
1st retake: 4-hour written sit-in, new exam question.
2nd retake: 72-hour home assignment, maximum 10 pages.
Description of the exam procedure

The written sit-in exam consists in questions designed to test students’ understanding of the course content. The exam includes both questions about the concepts covered in class, and questions asking to apply the concepts learned in class to concrete business cases. 

Course content, structure and pedagogical approach

Economics studies how people allocate scarce resources among competing needs.  But what are those competing needs, and exactly what resources are scarce? 


Neoclassical economic models typically assumes that people seek to maximize their own wealth, that they are only constrained in the amount of money and time they have, and that they can make the best use of what they know: useful information is always taken into account, irrelevant information is ignored, the way problems are framed does not affect decisions, and neither do the circumstances in which decisions are taken. This does not mean that people do not make mistakes, but that those mistakes are assumed to not be systematic. 


Behavioral economics uses the same theoretical and empirical approaches but relaxes these assumptions about human behavior. First, people care about money, but also care about other things: the wellbeing of others, the wellbeing of the planet, their social reputation and social standing, their self-esteem, their values, among others. Second, money and time are not the only scarce resource: people often suffer from limited attention, willpower, time inconsistency, limited experience and information, and often have incorrect beliefs about the world. Third, people tend to make mistakes in systematic ways, they often ignore relevant information, they make decisions that depend on how the problem is framed, and often are influenced by their emotions. Behavioral economics provide tools to model and test how people make decisions in real life. 


Understanding what influences people’s economic decisions is crucial for policy making, as well as for the private sector. 


This is why the most successful and innovative firms, organizations and institutions in the world have all one thing in common: a dedicated team of economists working closely with data scientists to understand the economics behind their businesses.  


This course aims at providing students with a hands-on introduction to the tools necessary to apply evidence-based decision-making within firms, non-profit organizations and public institutions.   The goal is not only to enable students to become consumers of the empirical literature on behavioral and experimental economics, but also active producers of original and testable ideas to improve the activities, processes, and organizational architecture of their future workplaces, whether those might be for-profit firms, non-profit organizations, or public institutions. 


We will begin the course by reviewing neoclassical and behavioral theories of individual preferences, as well as the empirical evidence supporting (or refuting) those theories. This may include (but not limited to): expected utility and prospect theory, time and risk preferences (including self-control, habit formation), other-regarding preferences (e.g. altruism), social image concerns (e.g. peer pressure, shame, social recognition), trust, honesty, cooperation and bargaining. We will then review empirical work showing how people respond to different types of incentives, and what psychological biases consistently affect people’s decisions. 


We will then turn to the basic tools of the trade, and cover how to formulate a testable research hypothesis, and design an experiment (or A/B test) to test it. 


Finally, we will bring it all together and cover research papers drawn from various fields of economics that have provided new scientific insights into human behavior and the functioning of markets, while at the same time created value added for the firms and/or organizations involved in the study. 

Description of the teaching methods
The class activities will include lectures, classroom experiments, group exercises, and occasionally short student presentations.
Feedback during the teaching period
In addition to office hours and email communications, there will be feedback activities, such as group and individual feedback in class. We also aim to give constant feedback to students in the form of Q and A in the classroom. We encourage students to ask questions and participate in class discussion. Furthermore, we encourage students to form study-groups with other students to secure peer feedback on their work.
Student workload
Teaching 33 hours
Preparation 169 hours
Exam 4 hours
Further Information

This is a 3 weeks course.


Preliminary assignment: The course coordinator uploads Preliminary Assignment on Canvas at the end of May. It is expected that students participate as it will be included in the final exam, but the assignment is without independent assessment and grading.



We reserve the right to cancel the course if we do not get enough applications. This will be communicated on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams in start March.

Expected literature

Most of the material covered during the course will be in the form of research papers and chapters of selected books. Below you will find a list of additional suggested readings that we might also use in the course



Acemoglu, D., Laibson, D., and List, J. (2018), Microeconomics, 2nd edition, Pearson.


Schultz, T. P., & Strauss, J. (Eds.). (2008). Handbook of development economics (Vol. 4). Elsevier. 


Thaler R., Sunstein, C., (2008). Nudge: Improving decisions about health, wealth, and happiness


List, J., & Gneezy, U.,(2014). The why axis: hidden motives and the undiscovered economics of everyday life


Camerer, C.F., Loewenstein, G. and Rabin, M. eds. (2003). Advances in Behavioral Economics.


Kagel J., Roth A. (Eds.). (1995). The handbook of experimental economics, Elsevier 

Last updated on 25-11-2022