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2023/2024  KAN-CPHIO2002U  Behavioural Economics

English Title
Behavioural Economics

Course information

Language English
Course ECTS 7.5 ECTS
Type Mandatory (also offered as elective)
Level Full Degree Master
Duration One Quarter
Start time of the course Third Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc/MSc in Business Administration and Philosophy, MSc
Course coordinator
  • Johanna Sophie Jost - Department of Accounting (AA)
  • Kristian Bondo Hansen - Department of Management, Society and Communication (MSC)
Main academic disciplines
  • CSR and sustainability
  • Sociology
  • Business psychology
Teaching methods
  • Face-to-face teaching
Last updated on 01-12-2023

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • to advance students’ understanding of markets by recognizing the biases and errors of judgment to which all of us are prone
  • strengthen the students’ ability and to analyze and manage complex decisions
  • strengthen students’ ability to support or assess managerial and financial decision-making in all types of firms and organizations
  • through various exercises and experiments students will moreover get familiar with their own behavioral profile
Behavioural Economics:
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 Open book: all written and electronic aids, including internet access
Read more here about which exam aids the students are allowed to bring and will be given access to : Exam aids and IT application package
Make-up exam/re-exam
Same examination form as the ordinary exam
The number of registered candidates for the make-up examination/re-take examination may warrant that it most appropriately be held as an oral examination. The programme office will inform the students if the make-up examination/re-take examination instead is held as an oral examination including a second examiner or external examiner.
Course content, structure and pedagogical approach

This course provides students with a critical view on economics, and its standard models and assumptions based on what we know about personal and market behavior. It is an introduction to a critique that takes as its premise that decision-making and behavior are not necessarily driven by rational considerations but by aspects of psychology.


The purpose of this course is to enable students to understand economic theories of the market on their own terms while at the same time identifying more philosophical themes related to for example rationality, efficiency and value inherent in these theories.
This double understanding of markets should enable students not only to reflect critically about mainstream economic theory but also articulate this critique on the terms of economic theory itself. In the wider context of the CM(fil.) master, the idea of this course is to activate philosophical thinking from inside economics rather than the other way around

Description of the teaching methods
This course begins by reviewing the standard economic assumptions related to preferences and expected utility – to make sense of how psychology impacts individuals and markets it is necessary to take this step back –, its inability to account for various paradoxes and anomalies, and the genesis of behavioral economics. Philosophical themes covered in this part include rationality, utilitarianism (ethics), and empiricism (epistemology).

These central theoretical developments have subsequently proved incomplete as individuals’ actual choices violate a number of important assumptions. For example, the assumption of risk aversion proved to be poorly grounded in actual behavior as did market efficiency. (Social) Psychology provided interesting alternative explanations that naturally call for philosophical scrutiny: Prospect theory, heuristics and biases, mental accounting, overconfidence, and nudging (paternalism). Philosophical themes include fairness, emotions, and inter-temporal choice.

The final part of the course describes how psychological biases have the potential to impact the behavior of managers in practice. Both the abilities of rational managers to take action when markets are believed to reflect irrationality and the possibility that managers are themselves the source of bias are addressed. Here, the philosophical purpose is to abstract what is valid from all realms. Some 'debiasing' strategies will also be covered.

Lastly, Experimental research occurs several times throughout the course, as a method to investigate behavior with respect to the topics of this course and as a topic in and of itself. The idea is to give students the relevant methodological knowledge to conduct behavioral research during their studies as well as in their professional work.
Feedback during the teaching period
Feedback is, in part, provided on an ongoing basis through Q&A during the lectures. This includes a dedicated Q&A session for exam preparation. Moreover, feedback is provided on the group work and experimental exercises that we do in class. Finally, students are encouraged to make use of office hours.
Student workload
Lectures 30 hours
Exam 4 hours
Preparation 172 hours
Expected literature

Indicative literature (incomplete):


Bruni, L. and R. Sugden (2007). The road not taken: How psychology was removed from economics, and how it might be brought back. The Economic Journal, 117, 146-173.

Gigerenzer, G. and W. Gaissmaier (2011). Heuristic decision making. Annual review of psychology, 62, 451-482.

Kahneman, D. (2011). Thinking, fast and slow. Macmillan.

Kahneman, D. and A. Tversky (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47, 263-291.

Simon, H. A. (1987). Making management decisions: The role of intuition and emotion. The Academy of Management Executive, 1, 57-64.

Thaler, R. H. and C. R. Sunstein (2003). Libertarian paternalism. American Economic Review, 93, 175-179.

Tversky, A. and D. Kahneman (1974). Judgment under uncertainty: Heuristics and biases. Science, 185, 1124-1131.

Zuboff, S. (2019). The age of surveillance capitalism: The fight for the human future at the new frontier of power. Profile Books.

Last updated on 01-12-2023