Please note the prerequisites for this course at the bottom of the course description.
Our global society faces a number of challenges: an aging population, unemployment, increasing inequality, climate change, poverty, declining resources. Most of these challenges are rooted in the dilemma of diverging individual and collective rationality. Acknowledging these challenges, the EU adopted in 2009 a strategy for sustainable development which aims at meeting the needs of present generations without jeopardising the ability of future generations to meet their own needs. “But sustainable development will not be brought about by policies only: it must also be taken up by society at large.” (EU, 2009) This, however, requires profound changes in thinking and behaviour, in consumption and production patterns, and in economic and social structures.
Policymakers have encountered substantial difficulties over the past decades trying to induce producers and consumers to change behaviours and to adopt new, more sustainable technologies, even when these behaviours appear to be in the consumers’ or producers’ own financial interests. Traditional policy instruments, i.e. monetary incentives, are costly and not always effective. Individuals decide as “Humans” rather than as “Econs” (Thaler & Sunstein, 2008): While “Econs” may not make perfect forecasts, they at least make unbiased forecasts. And they respond primarily to monetary incentives—their decisions are not affected by seemingly “irrelevant” factors such as the display of a set of alternatives, or the order in which options are offered. In contrast, “Humans” make systematic and predictable errors—their forecasts are flawed and biased in systematic ways.
Therefore, a growing body of research in psychology and behavioural economics suggests that interventions that take into account these systematic biases can potentially be just as powerful in changing choices and behaviour as interventions that are based on standard economic theory. What is more, they are potentially much less costly. As a consequence, an increasing number of government institutions (most famously the UK’s Behavioural Insights Team) dedicate themselves to the application of behavioural insights. With a growing emphasis on evidence-based policy making, an ever increasing number of behaviourally informed interventions gets tested in the field.
In this course we will study the challenges and opportunities for using behavioural insights in policy making. The course follows a two-fold structure: During the lectures we will study and discuss main behavioural theories and concepts. The tutorials focus on randomised controlled trials, which are often considered to be the “gold standard” for knowing whether policy interventions work in the field. The two aspects of the course combine in the course assignment, for which groups of students are expected to design a behaviourally informed policy intervention as well as a field experiment to test its effectiveness.
At the end of the course the student is able to:
• Set out the most robust (non-coercive) influences on behaviour;
• Demonstrate how behavioural theory can help meet current policy challenges;
• Identify the relevant tools for changing specific behaviour;
• Design a policy intervention using behavioural insights;
• Understand the role of randomised controlled trials (RCTs) for evidence-based policy making;
• Understand most essential research methods for field experiments;
• Assess potential for controversy, assess legitimacy of using behavioural insights for policy making.
• Lectures, tutorials
• Lectures focus on the discussion of main behavioural theories.
• Tutorials cover major aspects of experiment design, analysis, and interpretation.
• Assignment: Intervention design (50%, group)
• 4 mini-MC tests (50%, individual)
Teams of 3-4 students are expected to be prepared each week to possibly present their progress regarding the design of an intervention for behaviour change and discuss their progress in class. The grade will be based on the final handed-in written work.
None. Course is eligible to all students.
In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN number. Separate or spare codes are usually not available.