ECON3314 · Economics

How Incentives Explain Seemingly Irrational Behavior

Morrissey College of Arts & Sciences

Behavioral Economics and social psychology have revealed many surprising quirks of social behavior, providing robust evidence that people deceive themselves, are systematically overconfident, believe implausible things to avoid inconsistency, and so on. This course will demonstrate that we can make sense of these seeming irrationalities through understanding how incentives shape behavior. We begin by understanding how genetic and cultural evolution shaped us to respond to certain incentives, including material resources and the social rewards (peer approval, a good reputation, etc.) that have long been associated with resources and mating opportunities. We then investigate how incentives operate in both blatant and subtle ways to motivate our behavior, applying this lens to many of the greatest hits from behavioral economics and social psychology, including confirmation bias, strategic ignorance, insensitivity to impact in charitable giving, and more. Assignments will focus on how to evaluate empirical research and test explanations convincingly.