Syllabus/achievement requirements

The articles marked with an * are the curriculum. Other articles are recommended reading. Texts marked K are for sale in Akademika as part of a compendium. The readings are listed in themes corresponding roughly to the lectures.


Literature providing an overview over behavioral economics


  • Camerer, C. & Loewenstein, G. (2004). "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. Link to pdf
  • Laibson, D. and R. Zeckhauser: "Amos Tversky and the Ascent of Behavioral Economics" in Journal of Risk and Uncertainty, 16, pp. 11-46, 1998. Link to pdf
  • Rabin, M: "Psychology and Economics" in Journal of Economic Literature, 36, pp. 11-46, 1998. Link to pdf
  • Rabin, M: "A Perspective on Psychology and Economics" in European Economic Review, 46, pp. 657-685, 2002. Link to pdf


    Literature on 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, winter, pp. 193-206, 1992. Link to pdf



  • * Plott, C. R. (1983): "Externalities and Corrective Policies in Experimental Markets,"The Economic Journal, pp. 106-127. Link to pdf
  • Plott, C. R. (2008): Properties of disequilibrium adjustment in double auction markets. In Plott and Smith (eds,) Handbook of Experimental Economic Results. Link to pdf
  • Vernon L. Smith (1989): Theory, Experiment and Economics, Journal of Economic Perspectives, pp. 151-169. Link to pdf
  • Fehr, E. and J.-R. Tyran: "Individual Irrationality and Aggregate Outcomes", Journal of Economic Perspectives, 19(4), 2005. 43-66. Link to pdf
  • 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. Link to pdf


    Expected utility and conjunction fallacy:

  • If you are unfamiliar with expected utility, it may be worth wile reconsider the introductions from standard textbooks. E.g. Varian, H.R. (1992): Microeconomic Analysis (3.ed), Norton. (Chapter 11).
  • * Gigerenzer, G., Hertwig, R., Hoffrage, U. and P. Sedlmeier: "Cognitive Illusions Reconsidered" in 2008. Vol. 1, Ch 109: 1018-1034. Link to pdf
  • * Tversky A. and D. Khaneman: "Extensional versus Intuitive Reasoning: The Conjunction Fallacy in Probability Judgement" in Psychological Review, 91, pp. 293-315, 1984. Link to pdf


    Prospect theory and endowment:

  • * Kahneman, D. and A. Tversky: "Prospect Theory: An Analysis of Decision under Risk" in Econometrica, 47, 1979. pp. 263-291. Link to pdf
  • * 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. Link to pdf
  • * Marzilli Ericson, Keith M. and Andreas Fuster (2014): “The Endowment Effect”, Annu. Rev. Econ. 2014. 6:555-79. Link to pdf (Earlier version)
  • * Plott, C. R and K. Zeiler: "The Willingness to Pay-Willingness to Accept Gap, the "Endowment Effect", Subject Misconceptions and Experimental Procedures for Eliciting Values" in American Economic Review, 2005. 95, pp. 530-545. Link to pdf
  • * Rabin, M. and R. Thaler: "Anomalies: Risk aversion" in Journal of Economic Perspectives, 15, pp. 219-232, 2001. Link to pdf
  • Camerer, C.: "Prospect Theory in the Wild: Evidence from the Field" in Choices, Values and Frames, 2000.
  • Köszegi, B and M. Rabin: "A Model of Reference-dependent Preferences" in Quarterly Journal of Economics, CXXI. Link to pdf
  • List, J.: "Neoclassical Theory Versus Prospect Theory: Evidence from Marketplace" in Econometrica, 72, pp. 615-625, 2004. Link to pdf
  • Rabin, Matthew: "Risk Aversion and Expected-Utility Theory: A Calibration Theorem" in Econometrica, 68, pp. 1281-1292, 2000. Link to pdf
  • 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. Link to pdf


    Mental accounting and applications:

  • * Barberis, Nicholas C.: “Thirty Years of Prospect Theory in Econometrics: A Review and Assessment” in Journal of Economic Perspectives, 27(1), 173-196, 2013. Link to pdf
  • * Thaler, R. H.: "Mental Accounting Matters" in Journal of Behavioral Decision Making, 12, pp. 183-206, 1999. Link to pdf
  • * Thaler, R.H. and C.R. Sunstein: "Libertarian Paternalism" in Journal of Behavioral Decision Making, 2003. 12, pp. 183-206. Link to pdf
  • Barberis, N., M. Huang, and T. Santos: "Prospect Theory and Asset Prices" in Quarterly Journal of Economics, 116, pp. 1-53, 2001. Link to pdf
  • Benartzi, S. and R. Thaler: “Myopic Loss Aversion and the Equity Premium Puzzle” in Quarterly Journal of Economics, 110, 73-92, 1995. Link to pdf
  • 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. Link to pdf
  • Prelec, D. and G. Loewenstein: "The Red and the Black: Mental Accounting of Savings and Debt" in Marketing Science, 17, pp. 4-28, 1998. Link to pdf


Literature on 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. Link to pdf
  • * Strotz, R.H. (1956), "Myopia and Inconsistency in Dynamic Utility Maximization," Review of Economic Studies, 23, 165-180. Link to pdf
  • Loewenstein, G. and D. Prelec (1992), "Anomalies in Intertemporal Choice: Evidence and an Interpretation," Quarterly Journal of Economics, 107, 573-597. Link to pdf
  • 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. Link to pdf
  • Goldman, S.M. (1980), "Consistent Plans," Review of Economic Studies, 47, 533-537. Link to pdf


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

  • *Gul, F. and W. Pesendorfer (2004), "Self-Control and Theory of Consumption," Econometrica, 72, 119-158. Link to pdf
  • * O'Donoghue, T. and M. Rabin (1999), "Doing it Now or Later," American Economic Review, 89, 103-124. Link to pdf
  • O'Donoghue, T. and M. Rabin (2001), "Choice and Procrastination," Quarterly Journal of Economics, 116, 121-160. Link to pdf
  • Heidhues, P. and B. Koszegi (2009), "Futile attempts at self-control," Journal of European Economic Association, 7, 423-434. Link to pdf
  • Ariely, D. and K. Wertenbroch (2002), "Procrastination, Deadlines, and Performance: Self-Control by Precommitment," Psychological Science, 13, 219-224. Link to pdf
  • Gul, F. and W. Pesendorfer (2001), "Temptation and Self-Control," Econometrica, 69, 1403-1435. Link to pdf


    Application to the theory of consumption

  • * Laibson, D. (1997), "Golden Eggs and Hyperbolic Discounting," Quarterly Journal of Eonomics, 112, 443-477. Link to pdf
  • * Laibson, D. (1998), "Life-Cycle Consumption and Hyperbolic Discount Functions," European Economic Review, 42, 861-871. Link to pdf
  • * 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. Link to pdf

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


    Literature on 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. Link to pdf
  • * Sobel, J.: "Interdependent Preferences and Reciprocity" in Journal of Economic Literature 43, pp. 392-436, 2005. (Chapter 5 can be skipped) Link to pdf


    Experimental economics:

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


    Inequality aversion

  • Camerer, C. (2003). "Dictator, Ultimatum, and Trust Games", Behavioral Game Theory. Experiments in Strategic Interaction (Princeton University Press/Russell Sage Foundation), pages 101-104K
  • * Fehr, Ernst, and K. M. Schmidt: "A Theory of Fairness, Competition, and Cooperation" in Quarterly Journal of Economics, 114, pp. 817-868, 1999. Link to pdf


    The following pages from the overview readings (see above) are particularly relevant for this topic: 

  • Sobel, J.: “Interdependent Preferences and Reciprocity” in Journal of Economic Literature 43, 398-401, 2005. Link to pdf



  • * 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. Link to pdf
  • Rabin, M: "Incorporating Fairness into Game Theory and Economics" in American Economic Review 83, pp. 1281-1302, 1993. Link to pdf


    The following pages from the overview readings (see above) are particularly relevant for this topic: 

  • Sobel, J.: “Interdependent Preferences and Reciprocity” in Journal of Economic Literature 43, Section 3.4. 2005. Link to pdf



  • * Nyborg, K and M Rege: "Does Public Policy Crowd Out Private Contributions to Public Goods?" in Public Choice 115 (3), pp. 397-418. Link to pdf
  • * Brekke, K. A., S. Kverndokk, and K. Nyborg (2003): "An Economic Model of Moral Motivation," Journal of Public Economics 87 (9-10), 1967-1983. Link to pdf
  • Andreoni, J: "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence" in Journal of Political Economy 97 (6), pp. 1447-1458. Link to pdf
  • Frey, B.: "Pricing and Regulating Affect Environmental Ethics" in Environmental and Resource Economics, 2, pp. 399-414, 1992. Link to pdf


    The following pages from the overview readings (see above) are particularly relevant for this topic: 

  • Sobel, J.: “Interdependent Preferences and Reciprocity” in Journal of Economic Literature 43, Section 3.3. 2005. Link to pdf


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)Link to pdf
  • * Young, H. P.: "The Evolution of Social Norms," 2015. Annual Review of Economics 7. 359-387 (sections 4-7 and 9 can be skipped)Link to pdf
  • * Nyborg, K., and M. Rege: "On Social Norms: The Evolution of Considerate Smoking Behavior" in Journal of Economic Behavior and Organization, 52, pp. 323-340, 2003. (Sections 3-5 can be skipped) Link to pdf
  • *Nyborg, K., Anderies J. M., et al. (2016): “Social Norms as Solutions” in Science, 354, pp. 42-43.  Link to pdf
  • 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. Link to pdf
  • Lindbeck, A (1997): "Incentives and Social Norms in Household Behavior" in American Economic Review 87 (2), pp. 370-377. Link to pdf


Published May 24, 2017 3:21 PM - Last modified Aug. 31, 2017 9:32 AM