Behavioral Economics in Public Policy

90-882

Units: 12

Description: Economics has up to now been the social science that has been most broadly and deeply involved in public policy. With its rational choice perspective, the economic perspective has tended to favor certain types of policies – namely those that enhance the efficiency of market mechanisms and lower the cost of information. In this course we will examine an alternative approach to public policy informed by behavioral economics, which integrates insights and research findings from economics and psychology to form a richer conception of human motivation and behavior. Behavioral economics both recognizes that sometimes people behave less than optimally – indeed, sometimes self-destructively – and draws on its understanding of why to propose alternative approaches to public policy. The course will begin with overviews of behavioral economics and ‘asymmetric paternalism’ (a uniquely behavioral economics approach to public policy), and then will focus in on specific public policy issues, including health, obesity, saving, crime and drug abuse. Each of these topics could (and often does) occupy a whole course, but we will be spending a week on each at the most. So coverage will necessarily be highly selective. This is the sixth time I’ve taught this course. In an effort to remain up to date I’ve included among topics to be discussed what I view as the three most important policy-related issues of our times: income inequality, climate change and the changing nature of work as a result of the proliferation of robots and artificial intelligence. Pre-requisites: Microeconomics (at least undergraduate-level) Statistics (including at least basic multiple regression)

Learning Outcomes: The goals of the course are to: - learn what classic economic assumptions behavioral economics challenges - gain a broad understanding of many of the issues facing policy makers - learn how BE has been applied in various policy domains and where it has been successful - apply basic knowledge of experimental design and principles of BE in order to assess existing policies - understand how to generate policy interventions using insights from BE

Syllabus: 90-882_Behavioral_Economics_in_Public_Policy_Syllabus_F18.pdf