Module BUSI1181: Economics and Psychology of Decision-Making

Department: Business School (Business)

BUSI1181: Economics and Psychology of Decision-Making

Prerequisites

• None.

Corequisites

• None.

Excluded Combination of Modules

• None.

Aims

• To provide a foundation for the understanding of the nature and practice of decision processes within the broad context of business. To introduce students to the concepts and disciplines which underlie explanation, prediction and control in business and management. To provide a basic toolkit to assist students to improve their own decision making. Students will be encouraged to apply these concepts to a range of issues including their own experience through learning from lectures, seminars and investigative projects.
• To address reflective, analytical and collaborative mindsets.

Content

• Economic principles, methodology and model building
• Supply and demand, revealed preference
• Markets and pricing
• Theories of the firm
• Cost curves
• Break-even analysis
• The macroeconomic environment, international trade and government
• Elementary probability, presentation and analysis of data
• Descriptive and elementary inferential statistics
• Introductory game theory
• Rationality, bounded rationality and behavioural economics
• Evolution, brain and behaviour - 'hot cognition' and 'neuroeconomics'
• 'System I' and 'System II' thinking
• Decision-making under risk and uncertainty
• Heuristics and biases
• Over-confidence, under-confidence and performance calibration
• Gender differences in judgment and decision-making
• Choice domains - gambling, investing, saving, consuming, dating, misbehaving, etc
• Experimental approaches to behavioural economics - laboratory, naturalistic
• 'Nudging' - policy-making, problem-solving and behavioural intervention

Learning Outcomes

• Appreciate the economic context within which business decisions are made
• Understand and use basic statistical approaches towards analysis of data relevant to decision making under conditions of risk
• Appreciate and apply concepts, models, basic research methods to investigate decision processes
• Apply practical aids to decision-making

• Skills of enquiry and explanation
• Making and analysing business decisions

• Written communication
• Computer Literacy
• Making and analysing decisions

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• Learning takes place through attendance at lectures, preparation for and participation in seminar classes and assessments and through private study. Seminar preparation and activity will require students to refer to relevant academic and other sources, to use models and simulations to make and analyse decisions, to conduct basic enquiries with managers and others and to apply concepts to a variety of cases, questions and situations. The practical classes in Term Two introduce students to experimental approaches to economic psychology and behavioural economics, providing opportunities to experience first-hand those effects discussed in the classroom, and to gain skills in the development of behavioural interventions, engaging with the ethical dimensions/debates involved.
• Formative assessment is by means of a group report with an individual component which will involve an enquiry into decision processes.
• Summative assessment is by means of a written examination and an individual assignment to test knowledge, understanding, application of enquiry and other skills and appreciation of key concepts and issues. The summative assignment will require further investigation of relevant literature and its application to specific situations.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment:

One group report plus individual component.

■ Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University