Behavioral Economics: When Psychology and Economics Collide

Course Description
Gain a deeper awareness of how psychology shapes economic behavior. This course explores how biases, heuristics, emotions, and social factors affect financial choices, risk-taking, cooperation, and decision-making in everyday life. You’ll learn how behavioral economics challenges traditional rational models, and how to use these insights to make smarter personal, financial, and social decisions.

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Lessons Included

01: What Is a Good Decision?
Examine rational choice models in economics, their assumptions, and why many human decisions defy them. Learn two major limitations that affect decision-making.
32 min

02: The Rise of Behavioral Economics
Discover how psychology and economics merge to explain biases and anomalies in human choices. Learn Prospect Theory and three experimental principles.
29 min

03: Reference Dependence – It’s All Relative
Understand how value and expectations shape decisions. Explore the role of dopamine in reward-seeking behavior and choice-making.
29 min

04: Reference Dependence – Economic Implications
See how reference points create biases that influence both personal and market decisions, and how to counteract them for better outcomes.
28 min

05: Range Effects – Changing the Scale
Learn why relative differences lose impact as quantities increase, and how this cognitive bias affects economic behavior.
29 min

06: Probability Weighting
Discover how people misjudge probabilities, leading to biased decisions in insurance and risk planning. Learn tools to correct these errors.
29 min

07: Risk – The Known Unknowns
Examine risk aversion and risk seeking, and how perceived benefits and risks guide choices. Learn two strategies to manage risk.
29 min

08: Ambiguity – The Unknown Unknowns
Understand decision-making under uncertainty when probabilities are unknowable. Explore tools to handle hidden information and unfamiliar contexts.
28 min

09: Temporal Discounting – Now or Later?
Study why we undervalue future rewards compared to immediate ones and how to counteract impulsive decision-making.
29 min

10: Comparison – Apples and Oranges
Learn how the brain constructs subjective value and how to leverage this process for better choices.
28 min

11: Bounded Rationality – Knowing Your Limits
See how people simplify complex choices with rules of thumb, unconscious decision-making, and why deliberation can sometimes hinder results.
30 min

12: Heuristics and Biases
Explore four common heuristics that shape memory, probability judgment, and valuation—where they help and where they mislead.
31 min

13: Randomness and Patterns
Understand why we see patterns in randomness and how to avoid mistaken predictions in uncertain environments.
30 min

14: How Much Evidence Do We Need?
Examine evidence-based decision-making, overconfidence in evidence quality, and confirmation bias.
29 min

15: The Value of Experience
Learn why experiences bring more happiness than material purchases and how memory shapes satisfaction.
30 min

16: Medical Decision Making
Apply behavioral economics to healthcare decisions, examining biases in patients and physicians.
31 min

17: Social Decisions – Competition and Coordination
Study how group dynamics, emotions, and game theory affect cooperative and competitive decisions.
31 min

18: Group Decision Making – The Vox Populi
Explore the wisdom of crowds, diversity’s role in decision quality, and when groups fail.
30 min

19: Giving and Helping – Why Altruism?
Understand the psychology of generosity and how biases can be used to encourage giving.
30 min

20: Cooperation by Individuals and Societies
Examine the roots of cooperative behavior, including self-interest, social norms, punishment, and rewards.
31 min

21: When Incentives Backfire
Learn when external rewards reduce motivation and how to design effective incentives.
30 min

22: Precommitment – Setting Rationality Aside
Discover how binding decisions today (like savings or contracts) improve long-term outcomes.
30 min

23: Framing – Moving to a Different Perspective
See how the same data framed differently leads to different choices, and how framing can be used positively.
29 min

24: Interventions, Nudges, and Decisions
Conclude by examining how leaders and policymakers use nudges to improve choices, balancing ethics and autonomy.
31 min