Brief characteristics of the course

“Does nudging have the potential to tackle social challenges?” “Why (not) nudge?” The compulsory elective course “Nudging People in Societies: a Behavioral Economics Perspective” provides answers to these fundamental questions. The aim is to acquaint students with the key principles and concepts of behavioral economics and its theory of nudge, understanding and analyzing the ways in which we process information and make decisions. Students will deepen their knowledge of subjects based on neoclassical economics and illustrate how nudging can help to achieve more effective societal outcomes. The focal point is the perspective of limited rationality, self-control and selfishness of people that complements classical economic models of human behavior with more realistic psychological assumptions on decision-making, behavior and public and social policy processes. Critical views of behavioral economics and its application in public policy will also be considered.

The graduate of the course can:

- explain mental abbreviations and heuristics and use them to propose solutions to achieve more effective societal output,

- critically evaluate and identify areas in which the application of behavioral concepts can or cannot contribute to the improvement of with regard to their implementation, efficiency or redistribution;

Graduates will use the acquired skills when working in both the public and private or non-profit sector. For a full understanding of the subject matter, continuous home preparation for each lecture is recommended (reading selected chapters of elementary literature).

Course structure and contents:

The course consists of three main parts - lectures, home reading of recommended literature, seminars, processed assignments, discussion / presentation - and is not factually focused on a specific public policy or sector.

Elementary literature:

THALER, R.H., SUNSTEIN, C.R. (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven: Yale University Press. [česky: Nudge (Šťouch) Jak postrčit lidi k lepšímu rozhodování o zdraví, majetku a štěstí. Albatros Media a.s., 2010]

KAHNEMAN, D. (2011). Thinking, Fast and Slow. New York: Farrar, Straus and Giroux. [česky: KAHNEMAN, D. 2012. Myšlení rychlé a pomalé, Jan Melvil Publishing, ISBN 978-80-87270-42-4]

SUNSTEIN and THALER, 2003, Libertarian Paternalism Is Not an Oxymoron, The University of Chicago Law Review, Vol 70, No.4.

Recommended literature

ARIELY, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. New York, NY: Harper. [česky: ARIELY, D. 2009. Jak drahé je zdarma : proč chytří lidé přijímají špatná rozhodnutí : iracionální faktory v ekonomice i v životě. Vyd. 1. Praha: Práh, 2009. ISBN 978-80-7252-239-2]

Behavioral Insights Team (2014). EAST: Four simple ways to apply behavioral insights. https://38r8om2xjhhl25mw24492dir-wpengine.netdna-ssl.com/wp-content/uploads/2015/07/BIT-Publication-EAST_FA_WEB.pdf.

CAMERER C. (2000): Prospect theory in the wild: Evidence from the field, In: Choices, Values, and Frames. Contemporary Psychology. No.47. American Psychological Association, Washington, DC, pp. 288-300. ISBN 9780521621724.

DHAMI, Sanjit S. (2019). The foundations of behavioral economic analysis. Volume 1, Behavioral economics of risk, uncertainty, and ambiguity. Oxford: Oxford University Press. ISBN 9780198835608.

DOLAN, P. et al. (2010). Mindspace: Influencing Behaviour through Public Policies. London: Cabinet Office and the Institute for Government.

HOWLETT, M. (2008). Managing the “Hollow State”: Procedural Policy Instruments and Modern Governance. Canadian Public Administration. 43. 412 - 431. 10.1111/j.1754-7121. 2000.tb01152.x.

HOWLETT, M. and Ramesh, M. (2014). The two orders of governance failure: Design mismatches and policy capacity issues in modern governance, Policy and Society, Volume 33, Issue 4, December 2014, Pages 317–327, https://doi.org/10.1016/j.polsoc.2014.10.002

KAHNEMAN, D., KNETSCH, J.L., THALER, R.H. (1991). Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias, The Journal of Economic Perspectives, 5(1), pp. 193-206, Winter.

KAHNEMAN, D., KNETSCH, L.J. and THALER, R. (1990). "Experimental Tests of the Endowment Effect and the Coase Theorem." Journal of Political Economy 98 (6): 1325-1348.

KRPAN D, GALIZZIM M and DOLAN P. (2019). Looking at Spillovers in the Mirror: Making a Case for “Behavioral Spillunders” Front Psychol 10:1142doi: 103389/fpsyg201901142

SAMSON, A. (2016). The Behavioral Economics Guide. Behavioral economics.

SCHMIDT, AT, ENGELEN, B. (2020). The ethics of nudging: An overview. Philosophy Compass. 2020; 15: e12658. https://doi.org/10.1111/phc3.12658

SUNSTEIN,Cass R. (2020). Behavioral Science and Public Policy. Cambridge University Press, number 9781108972789.

THALER, R. H. (2015). Misbehaving: The Making of Behavioral Economics. W W Norton & Co. [česky: THALER, R. H. (2017) Neočekávané chování: příběh behaviorální ekonomie. Argo]

WILKINSON, N. - KLEAS, M. (2012). An Introduction to Behavioral Economics. Palgrave.

Form of study control (requirements for completing the course)

Prerequisites for completing the course are (1) preparation for lectures and active participation in teaching activities. Students must have read articles and processed assignments intended for discussion. Part of the duties is (2) elaboration and submission of the final seminar paper on the topic of the selected presentation in the range of 10 standard pages of continuous text (upload to the Moodle course page).

Ad 1) Preparation for lectures

A list of compulsory and recommended home study literature is prepared for each lecture. The selection of literature seeks to cover key aspects of the topic. The texts will be discussed; therefore, it is absolutely necessary to read them in advance and prepare any questions and suggestions for discussion. It is not necessary to read all the case studies, they mainly serve as illustrations of the discussed topic and inspiration for the processed presentation and seminar paper.

Ad 2) Seminar paper

Elaboration of homework into a seminar paper is highly recommended. The project shall span no less than 6 pages or 12 pages in case of a pair of students.

The structure should run along the following points:

1. A brief introduction of the problem and its relevance

2. A formulation of a “research question(s)” or lines of forwarded arguments

3. An exposition of employed theoretical and methodological approach(es)

4. A formulation of answers to the selected “research question(s)” or individual ́s arguments

If required by the selected subject, arguments and conclusions are to be supported and complemented by quantitative data, e.g., tables, figures and charts

5. A “summary” of forwarded arguments and conclusions as well as suggestions of soutions to the selected problematics

The seminar paper must be submitted in electronic form to the address radek.kovacs@fsv.cuni.cz. The subject of the email must contain the course code in square brackets, i.e [XXXXXX], otherwise it will not be entered correctly. The final version will be analyzed by plagiarism detection software.

Deadlines

Submission of homework: 48 hours before the seminar at the most.

Submission of seminar paper: 31.5.2024

Failure to meet the deadlines by less than 3 days means a 20% reduction in the number of points, a longer delay is evaluated as non-submission (0 points). A total of three deadlines are available for submitting the final version of the project. The first two can be used to obtain feedback, the third deadline is possible to submit the final version of the paper and meet the conditions for completing the course.

Course Schedule

Block 1: Lecture: Introduction. Modern Governance and Persistent Problems

- Modern Governance

- Traditional and Procedural Policy Instruments and Mechanisms

- A cross-sectoral and multi-actor dimension of problems

- Identifying and unravelling persistent problems

Delimitation of behavioral economics. Concept of limited rationality I (heuristics, biases, and so-called irrational behavior)

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