Behavioral Decision Theory
This course is an intermediate-level class on individual-level theory. The method used posits precise assumptions about general behavior (axioms) then finds equivalent ways to model them in mathematically convenient terms. We will cover both the traditional “rational’’ approach, and more recent “behavioral’’ models that incorporate psychological principles, in domains of intertemporal choice, random (stochastic) choice, menu choice, and revealed preferences. Students are expected to understand rigorous mathematical proofs. The class also includes serious discussion of the value of experimental evidence motivating new theories. Not offered 2023-24.