Economics is a formal science based on assumptions about individual behavior. Sophisticated models with positive predictions follow up from these assumptions. Real decisions made by firms and policy makers (including Central Bank and Parliament) arise from these predictions. Nonetheless, should we blindly believe that these classical assumptions are correct? Are people infinitely rational and can they always correctly anticipate unexpected shocks? Should we care about our pension savings in the beginning of our careers? Are sports fans rational in the process of buying tickets? Why is it so difficult to do home assignments in advance?
This course will answer these questions, challenge classical assumptions and substitute them for something more realistic. We will conduct experiments, analyze various data sets and study fundamental papers in behavioral economics in order to show that standard economics sometimes gives wrong answers to diverse questions. As well as acquiring up-to-date knowledge of current economic theory, this course will also familiarize you with different statistical methods of data analysis.