Syllabus/achievement requirements

The texts wich are marked with an * are the curriculum.


Rabin, M: "A Perspective on Psychology and Economics" in European Economic Review, 46, pp. 657-685, 2002.

Camerer, C and G. Loewenstein : Behavoiral Economics: Past, Present, Future, 2003. Mimeo, Carnegie Mellon University.

Rabin, M: "Psychology and Economics" in Journal of Economic Literature, 36, pp. 11-46, 1998.

Laibson, D. and R. Zeckhauser: "Amos Tversky and the Ascent of Behavioral Economics" in Journal of Risk and Uncertainty, 1998.

Topic 1: Behavioral decision theory


* Kahneman, D., J. Knetsch,and R. Thaler: "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias" in Journal of Economic Perspectives, 5, pp. 193-206, 1992.

Expected utility and conjunction fallacy:

Hylland, A.: Decisions under uncertainty - Standard theory and alternatives, 2003.

* Tversky A. and D. Khaneman: "Extensional versus Intuitive Reasoning: The Conjunction Fallacy in Probability Judgement" in Psychological Review, 91, pp. 293-315, 1984.

Prospect theory:

* Kahneman, D. and A. Tversky: "Prospect Theory: An Analysis of Decision under Risk" in Econometrica, 47, pp. 263-291.

* Rabin, M. and R. Thaler: "Anomalies: Risk aversion" in Journal of Economic Perspectives, 15, pp. 219-232, 2001.

* Chateauneuf, A. and P. Wakker: "An axiomatixation of Cumulative Prospect Theory for Decision Under Risk" in Journal of Risk and Uncertainty, 18, pp. 137-145, 1999. (Only part 1. Pasic Concepts).

Camerer, C.: "Prospect Theory in the Wild: Evidence from the Field" in Choices, Values and Frames, 2000.

Rabbin, Matthew: "Risk Aversion and Expected-Utility Theory: A Calibration Theorem" in Econometrica, 68, pp. 1281-1292, 2000.

Starmer, C.: "Developments in Nonexpected-Utility Theory: The Hunt for å Descriptive Theory of Choice Under Risk" in Journal of Economic Literature, 38, pp. 332-382, 2000.

Mental accounting, endowment effects, and the equity premium puzzle:

* Benartzi, S. and R. Thaler: "Myopic Loss Aversion and the Equity Premium Puzzle" in Quarterly Journal of Economics, 110, pp. 73-92, 195.

* Thaler, R.: "Mental Accounting Matters" in Journal of Behavioral Decision Making, 12, pp. 183-206, 1999.

* Kahneman, D., J. Knetsch, and R. Thaler: "Experimental Tests of the Endowment Effect and the Coase Theorem" in Journal of Political Economy, 98, 1325-1348, 1990.

* List, J.: "Neoclassical Theory Versus Prospect Theory: Evidence from Marketplace" in Econometrica, 72, pp. 615-625, 2004.

Barberis, N., M. Huang, and T. Santos: "Prospect Theory and Asset Prices" in Quarterly Journal of Economics, 116, pp. 1-53, 2001.

Camerer, C., L. Babcock, G. Loewenstein, and R. Thaler: "Labor Supply of New York City Cabdrivers: One Day at a Time" in Quarterly Journal of Economics, 112, pp. 407-443, 1997.

Prelec, D. and G. Loewenstein: "The Red and the Black: Mental Accounting of Savings and Debt" in Marketing Science, 17, pp. 4-28, 1998.

Skyrms, B: Evolution of the Social Contract, 1996. Chapter 4, Cambridge University Press.

Topic 2: Time inconsistency and self-control.


* Frederick, S., G. Loewenstein, and T. O'Donoghue: "Time Discounting and Time Preference: A Critical Review" in Journal of Economic Literature, 40, pp. 351-401, 2002.

Loewenstein, G. and D. Prelec: "Anomalies in Intertemporal Choice: Evidence and an Interpretation" in Quarterly Journal of Economics, 107, pp. 573-597, 1992.

Rubinstein, A.: "Discussion of 'Behavioral Economics'" in To appear in : Advances in Economics and Econometrics - Theory and Applications, Ninth World Congress of the Econometric Society.

General economic models of time-inconsistent preferences:

Strotz, R.H.: "Myopia and Inconsistency in DynamicUtility Maximization" in Review of Economic Studies, 23, pp. 165-180, 1956.

Goldman, S.M.: "Consistent Plans" in Review of Economic Studies, 47, pp. 533-537, 1980.

Self-control problems:

* O'Donoghue, T. and M. Rabin: "Doing it Now or Later" in American Economic Review, 89, pp. 103-124, 1999.

* Laibson, D.: "Golden Eggs and Hyperbolic Discounting" in Quarterly Journal of Economics, 112, pp. 443-477, 1997.

* Laibson, D. : "Life-Cycle Consumption and Hyperbolic Discount Functions" in European Economic Review, 42, pp. 861-871, 1998.

* Angeletos, G. -M., D. Laibson, A. Repetto, J. Tobacman, and S. Weinberg: "The Hyperbolic Consumption Model: Calibration, Simulation, and Empirical Evaluation" in Journal of Economic Perspectives, 15, pp. 47-68, 2001.

O'Donoghue, T. and M. Rabin: "Choice and Procrastination" in Quarterly Journal of Economics, 116, pp. 121-160, 2001.

Ariely, D. and K. Wertenbroch: "Procrastination, Deadlines, and Performance: Self-Control by Precommitment" in Psychological Science, 13, pp. 219-224, 2002.


Gul, F. and W. Pesendorfer: "Temptation and Self-Control" in Econometrica, 69, pp. 1403-1435.

* Gul, F. and W. Pesendorfer: "Self-Control and Theory of Consumption" in Econometrica, 72, pp. 392-406, 2004.

Dual self:

* Thaler, R. and H. Sherfin: "An Economic Theory of Self-Control" in Journal of Political Economy, 89, pp. 392-406, 1981.

Fudenberg, D. and D.M. Levine: A dual self model of impulse control, 2006.

Topic 3: Social preferences and fairness

Results from experimental economics:

* Camerer, C. : "Dictator, Ultimatum, and Trust Games" in Chapter 2 in : Behavioral Game Theory. Experiments in Strategic Interaction, pp. 43-113, 2003. Princeton University Press/Russell Sage Foundation.

* Smith, V. L.: "Rational Choice: The Contrast Between Economics and Psychology" in Journal of Political Economy, 99, pp. 877-897, 1991.

Fehr, E., and S. Gächter: "Altruistic Punishment in Humans" in Nature, 415, pp. 137-140, 2002.

Fairness and reciprocity:

* Sobel, J.: "Interdependent Preferences and Reciprocity" in Journal of Economic Literature 43, pp. 392-436, 2005.

* Fehr, E. and U. Fischbacher: "Why Social Preferences Matter - the Impact of Non-Selfish Motives on Competition, Cooperation and Incentives" in Economic Journal, 112, pp. C1-C33, 2002.

* Fehr, Ernst, and K.M. Schmidt: "A Theory of Fairness, Competition, and Cooperation" in Quarterly Journal of Economics, 114, pp. 817-868, 1999.

Impure altruism and intrinsic motivation:

* Andreoni, J.: "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving" in Economic Journal, 100, pp. 464-477, 1990.

Frey, B.: "Pricing and Regulating Affect Environmental Ethics" in Environmental and Resource Economics, 2, pp. 399-414, 1992.

Social interaction:

* Becker, G.S.: "A Note on Restaurant Pricing an Other Examples of Social Influences on Price" in Journal of Political Economy 99, pp. 1109-1116, 1991.

Lindbeck, A.: "Welfare State Disincentives with Endogenous Habits and Norms" in Scandinavian Journal of Economics, 97, pp. 477-494, 1995.

Nyborg, K., and M. Rege: "On Social Norms: The Evolution of Considerate Smoking Behavior" in Journal of Economic Behaviour and Organization, 52, pp. 323-340, 2003.

Published May 31, 2006 4:58 PM - Last modified June 14, 2006 4:05 PM