Classes at Yale
MGT 854: Behavioral Economics: Individuals, Organizations, and Markets
In this class, we will attempt to reunite the disciplines of psychology and economics, which began drifting apart about a century ago. In particular, we will consider how predictions of economic behavior differ when several assumptions that simplify economic models are replaced with psychologically realistic assumptions based on empirical observations from the lab and from the world. We will pay special attention to the way in which these modified assumptions affect markets, management, and public policy. Spring Term
Behavioral Economics and Strategy
Behavioral economics looks to neighboring sciences such as psychology,
biology, and neuroscience for insights into how human behavior
systematically deviates from rationality. Carrying these insight
one step further, behavioral economists seeks to understand both
the ways these biases respond to incentives,
and how they affect aggregate behavior in games,
organizations, and markets. This course will begin with a survey
of the behavioral-economic view of psychology, which can roughly
be characterized by three "bounds" on
human behavior: bounded willpower, bounded foresight, and bounded
selfishness. Here, we will emphasize in equal parts the experimental
lab evidence collected by psychologists, and economic studies
of biases as manifest in real-world behavior. Then we
will conclude by attempting to apply behavioral insights to
strategy and industrial organization. That is, we will look at
what new insights behavioral economics brings to the study
of both the firm's internal structure, and the firm's relationship
with consumers, financial markets, and other firms. Spring Term
MGT 520: Economic Analysis
This course concentrates on the role of markets in determining the opportunities facing individuals and business firms, and explores the use of economic principles in decisions made by organizations in the economy. Topics include analysis of competitive markets and noncompetitive markets, firm behavior and competitive strategy, and problems of microeconomic policy design affecting all sectors. The course is intended to be at a level accessible to students with little or no prior exposure to economics, but covers material that is more managerial in nature than traditional economics courses. Fall term.
MGT 826: Negotiating Strategy
Negotiations are everywhere we deal with others. In settings as diverse as brokering a joint venture, buying a house or car, or choosing what movie to see, compromise and mutual agreement are often a must. The goal of this course is to improve your skills as a negotiator by learning a conceptual framework for analyzing and shaping negotiation processes and outcomes.
Towards this, this course will bring to bear tools from game theory, behavioral economics, and social psychology. Lectures and course work will build on a foundation of formal analysis with equal parts negotiations exercises, psychology readings, and demonstrations. Several cases will also be explored (some led by Barry Nalebuff) which will integrate these tools and provide the opportunity to negotiate with classmates in a simulated environment.
Students will leave with an understanding of two complementary sets of topics. First will be formal tools and strategies, including understanding goals and incentives, structuring competition and alliances, and the making and breaking of coalitions. Equally important will be key behavioral and psychological phenomena such as perceptual anchoring, motivated overconfidence, and personal and cultural perceptions of fairness. Fall term.