Syllabus/achievement requirements

The articles marked with an * are the curriculum.


Camerer, C. & Loewenstein, G. (2003). "Behavioral Economics: Past, Present, Future". In C. Camerer, G. Loewenstein and M. Rabin. (Eds.). Advances in Behavioral Economics (pp. 3-51). New York and Princeton: Russell Sage Foundation Press and Princeton University Press.

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

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

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

Topic 1: Markets and 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.


* Charles R. Plott (1983): Externalities and Corrective Policies in Experimental Markets, The Economic Journal, 106-127,

* Charles R. Plott (2008): Properties of disequilibrium adjustment in double auction markets. In Plott and Smith (eds.) Handbook of Experimental Economics Results.

* Vernon L. Smith (1989): Theory, Experiment and Economics, Journal of Economic Perspectives, pp 151-169.

Fehr, E. and J.-R. Tyran: Individual Irrationality and Aggregate Outcomes”, Journal of Economic Perspectives, 19(4), 2005. 43-66.

Plott, C.R. and S. Sunder: Efficiency of Experimental Security Markets with Insider Information: An Application of Rational-Expectations Models, 1982. Journal of Political Economy, 90 (4). pp. 663-698.

Conjunction fallacy:

*Gigerenzer, G., Hertwig, R., Hoffrage, U. and P. Sedlmeier: "Cognitive Illusions Reconsidered" in 2008. Vol. 1, Ch 109: 1018-1034.

* 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, endowment:

* Kahneman, D. and A. Tversky: "Prospect Theory: An Analysis of Decision under Risk" in Econometrica, 47, 1979. pp. 263-291.

* 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.

*Köszegi, B and M. Rabin: "A Model of Reference-dependent Preferences" in Quarterly Journal of Economics, CXXI.

* Plott, C R and K Zeiler: "The Willingness to Pay-Willingness to Accept Gap, the "Endowment Effect", Subject Miscounceptions and Experimental Procedures for Eliciting Values" in American Economic Review , 2005. 95, pp. 530-545.

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

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

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

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, 2000. pp. 332-382.

Mental accounting, and applications:

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

*Thaler, R.H. and C.R. Sunstein: "Libertarian Paternalism" in Journal of Behavioral Decision Making, 2003. 12, pp. 183-206.

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.

Topic 2: Time inconsistency and self-control.

Introduction to self-control problems

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

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

Rubinstein, A. (2005), Discussion of 'Behavioral Economics', in Advances in Economics and Econometrics - Theory and Applications, Ninth World Congress of the Econometric Society, Blundell, R., Newey, W.K., Persson, T. (eds.), Volume II, pp. 246-254

* Strotz, R.H. (1956), Myopia and Inconsistency in Dynamic Utility Maximization, Review of Economic Studies, 23, 165-180

Goldman, S.M. (1980), Consistent Plans, Review of Economic Studies, 47, 533-537

Modeling self-control problems I: Multi-self vs. temptation

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

* O'Donoghue, T. and M. Rabin (1999), Doing it Now or Later, American Economic Review, 89, 103-124

O'Donoghue, T. and M. Rabin (2001), Choice and Procrastination, Quarterly Journal of Economics, 116, 121-160

Heidhues, P. and B. Koszegi (2009), Futile attempts at self-control, Journal of European Economic Association, 7, 423-434

* Gul, F. and W. Pesendorfer (2001), Temptation and Self-Control, Econometrica, 69, 1403-1435

Gul, F. and W. Pesendorfer (2004), Self-Control and Theory of Consumption, Econometrica, 72, 119-158

Application to the theory of consumption

* Laibson, D. (1997), Golden Eggs and Hyperbolic Discounting, Quarterly Journal of Eonomics, 112, 443-477

* Laibson, D. (1998), Life-Cycle Consumption and Hyperbolic Discount Functions, European Economic Review, 42, 861-871

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

Modeling self-control problems II: Dual self

* Thaler, R. and H. Shefrin (1981), An Economic Theory of Self-Control, Journal of Political Economy, 89, 392-406

* Fudenberg, D. and D.M. Levine (2006), A Dual Self Model of Impulse Control, American Economic Review, 96, 1449-1476


Topic 3: Social preferences and fairness


* 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.

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

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. K

Inequality aversion

* Camerer, C: "Dictator, Ultimatum, and Trust Games", Behavioral Game Theory. Experiments in strategic interaction, pp. 101-104, 2003. Princeton University Press/Russell Sage Foundation. K

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


* Camerer, C: "Dictator, Ultimatum, and Trust Games", Behavioral Game Theory. Experiments in strategic interaction, pp. 105-117, 2003. Princeton University Press/Russell Sage Foundation. Chapter 2.8.4 (Extensive-Form Fairness Equilibrium) can be skipped. K

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

Rabin, M: "Incorporating Fairness into Game Theory and Economics" in American Economic Review 83, pp. 1281-1302.


* Nyborg, K and M Rege: "Does Public Policy Crowd Out Private Contributions to Public Goods?" in Public Choice 115 (3), pp. 397-418.

* Brekke, K. A., S. Kverndokk, and K. Nyborg (2003): An Economic Model of Moral Motivation, Journal of Public Economics 87 (9-10), 1967-1983

Andreoni, J: "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence" in Journal of Political Economy 97 (6), pp. 1447-1458.

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

Social norms and social approval

* Young, H.P.: Social Norms and Economic Welfare, 1998. European Economic Review 42. 821-830 (only Sections 1-4 are compulsory reading).

* 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.

Akerlof, G A (1980): "A Theory of Custom, of Which Unemployment May be One Consequence" in Quarterly Journal of Economics 94 (4), pp. 749-775.

Lindbeck, A (1997): "Incentives and Social Norms in Household Behaviour" in American Economic Review 87 (2), pp. 370-377.


Texts marked K are for sale in Akademika as part of a compendium

Published May 30, 2014 2:33 PM - Last modified Aug. 27, 2014 3:02 PM