HU Credits: 3

Degree/Cycle: 2nd degree (Master)

Responsible Department: Environmental Economics & Management

Semester: 2nd Semester

Teaching Languages: English

Campus: Rehovot

Course/Module Coordinator: Prof. Eyal Ert

Coordinator Email: Eyal.Ert@mail.huji.ac.il

Coordinator Office Hours: Tuesday 8:00-9:00

Teaching Staff:
Prof. Eyal Ert

Course/Module description:
The normative model, bounded rationality and alternative theories, cognitive aspects of judgment and decision processes, heuristics and biases, the experimental approach, decisions under risk and uncertainty, learning and decisions from experience, social and environmental influence, implications for policy and choice architecture.

Course/Module aims:
Introducing the field of decision research and providing the basic tools necessary for conducting research in this area

Learning outcomes - On successful completion of this module, students should be able to:
-know normative and descriptive models of decision making
-apply behavioral models on new decision problems (predict behavior)
- recognize the differences between the normative approach to the experimental approach
-design experiments
-criticize experiments

Attendance requirements(%):
100

Teaching arrangement and method of instruction: A blend of online lectures, materials and assignments with interactive weekly meetings (Tuesdays) using the "flipped classroom" method.

Course/Module Content:
1.introduction and the Prospect theory
2.restricted rationality and Prospect theory
3.Relative judgment: Review and applications
4.Role of context and "reversal Preferences"
5.risk vr. Uncertainty
6.time preferences
7.decisions from experience
8. description vs. experience
9.Personality factors vr. social influence
10.introduction to the games theory
11. social dilemmas
12.Policy and choice architecture

Required Reading:
Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. science, 211(4481), 453-458.

Gigerenzer, G. (2008). Why heuristics work. Perspectives on psychological science, 3(1), 20-29.

Ert, E., & Erev, I. (2017). It won’t happen to me. Risk in Extreme Environments: Preparing, Avoiding, Mitigating, and Managing. 111-128.

Ert, E., Erev, I., & Roth, A. E. (2011). A choice prediction competition for social preferences in simple extensive form games: An introduction. Games, 2(3), 257-276.

Additional Reading Material:
Luce, R. D., & Raiffa, H. (1957). Games and decisions. New York: Wiley &
Sons. (Chapters 1 & 2):
Kahaneman, D. (2003), Maps of Bounded Rationality: Psychology for Behavioral
Economics. American Economic Review, 93(5), 1449-1475.
Tversky, A., & Kahneman, D. (1992). Advances in prospect theory: Cumulative
representation of uncertainty. Journal of Risk and uncertainty, 5(4), 297-323.

Camerer, C. F. (2004). Prospect theory in the wild: Evidence from the field. Colin F.
Camerer, George Loewenstein, and Matthew. Rabin, eds., Advances in Behavioral
Economics, 148-161.

Ert, E., & Erev, I. (2013). On the descriptive value of loss aversion: Six clarifications.
Judgment and Decision Making, 8, 214-235.

Thaler, R. (1999). Mental Accounting Matters. Journal of Behavioral Decision
Making , 12(3), 183-206.

Tversky, A. & Kahneman, D. (1981). The framing of decisions and the psychology of
choice, Science, 211(4481), 453-458.

Tversky, A., Slovic, P. & Kahneman, D. (1990), The causes of preference reversal,
American Economic Review 80(1), pp. 204–217.

Tversky A, Fox CR. (1995) Weighing risk and uncertainty. Psychological Review.
102, 269–283.

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

Gigerenzer, G., & Gaissmaier, W. (2011). Heuristic decision making. Annual Review
of Psychology, 62, 451–482.
Frederick, S., Loewenstein, G. & O'Donoghue, T. (2002). Time Discounting and
Time Preference: A critical review. Journal of Economic Literature. 40(2), 2002.
Erev, I. & Barron, G. (2005) On adaptation, maximization, and reinforcement
learning among cognitive
strategies, Psychological Review, 112, 912–931

Biele, G., Erev, I., & Ert, E. (2009). Learning, risk attitude and hot stoves in restless
bandit problems. Journal of Mathematical Psychology, 53(3), 155-167.
Erev, I., Ert, E., Roth, A., Haruvy, E., Herzog, S., Hau, R., Hertwig, R., Stewart, T.,
West, R., and Liebre, C. (2010). A choice prediction competition for choices from
experience and from description. Journal of Behavioral Decision Making. 23: 15-47
Erev, I., Ert, E., Roth, A., Haruvy, E., Herzog, S., Hau, R., Hertwig, R., Stewart, T.,
West, R., and Liebre, C. (2010). A choice prediction competition for choices from
experience and from description. Journal of Behavioral Decision Making. 23: 15-47
Yechiam, E., and Ert E. (2011). Risk attitude in decision making: Search for trait like
constructs. Topics in Cognitive Science. 3: 166-186.
Camerer, C. F. (1997). Progress in Behavioral Game Theory, Journal of Economic
Perspectives, 11(4), 167-188
Hardin, G. (1968). The tragedy of the common. Science, 162, 1243-1248.

Brewer, M. B., Kramer, R. M. (1986). Choice behavior in social dilemmas: Effects of
social identity, group size, and decision framing. Journal of Personality and Social
Psychology, 50(3), 543-549.
Thaler, R. & Sunstein. C. (2003). Libertarian Paternalism. American Economic
Review, 93, 175 – 179.

Ariely D. Norton M. I. (2008). How actions create—not just reveal—preferences.
Trends in Cognitive Science, 12: 13–16.

Hoffman, A. and M. H. Bazerman. Changing Practices on Sustainability:
Understanding and Overcoming the Organizational and Psychological Barriers to
Action. In Organizations and the Sustainability Mosaic, edited by S. Sharma, M.
Starik and B. Husted. Edward Elgar Publishing, 2007

Grading Scheme :
Written / Oral / Practical Exam 50 %
Active Participation / Team Assignment 13 %
Submission assignments during the semester: Exercises / Essays / Audits / Reports / Forum / Simulation / others 21 %
Other 16 %

Additional information:
This syllabus is only a summary of main characterics of the course and does not replace the detailed syllabus that appears on the course website. The detailed syllabus is the one determining the course description, its goals, and its requirements and evaluation.

The exercise will serve as "Magen": if the grade is lower then the exam, then the exam's grade will count instead, so the exam could count up to 71% of the final grade.

Mutual Reading of 4 mandatory papers will be done via Perusall

Active participation will includes completion of tasks that will be published along the course, and participation in class meetings

Students will be given the option to submit a short research project (experimental proposal) for bonus pts.