Behavioural Economics course for school students

BE Cover PageFor the past three years I have been teaching a Behavioural Economics course to all Yr 11 students (5th Form in UK). It is a 12 period course that is part of the Positive Education module. The course booklet consists of lesson plans on various topics and resources that are required to supplement the course. Click below to download the course notes and workbook. If you would like the PowerPoints that complement the course please email me – – and I will forward them on. Ideal for those post AS exam lessons.

Behavioural Economics – Yr 11 2015

Behavioural economics is about bringing reality into economic analysis. It borrows from psychology, sociology, politics, and institutional economics (which focuses on the rules of the economic game) to describe and explain human behaviour and economic phenomena. Behavioural economics builds upon conventional economics, offering more tools for understanding why people behave the way they do when it comes to income, wealth, ethics, and fairness. It uses prospect theory to describe the choices that the typical person makes. The course is split up into 4 topics and is designed for approximately 12 periods in length.

1. Understanding Choice

Free choice in Economic Decision Making
Anchoring and Framing
Placebo Effect
Paradox of Choice
Loss Aversion and Endowment Effect
Conventional v Behavioural Economics

2. Ethics and Economic Growth

Ethical Behaviour – definition
Milton Friedman and ethical behavior
The Conventional Perspective on Ethical Behaviour and the Economy
A Good Company – Ethics / Happiness
Examples of Companies with socially responsible norms
Ethics and Profits
Ethical consumers

3. Behavioural Finance

Definition – what is it?
Efficient Market Hypothesis
Random Walk Hypothesis
Irrational Exuberance
Bubbles and Busts – Tulip – Great Crash – – 2008 Global Financial Crisis

Causes of Bubbles
– Following the herd
– Relative positioning in investor behavior
– Overconfidence and under-confidence
– Institutional failure
– Conflict of interest

4. Game Theory

Introduction to Game Theory
Football – Penalty Shoot outs
Golden Balls Game Show

5. Money and Happiness

Conventional Theory – Money = Happiness
Measuring Happiness – Gross Domestic Product v Gross National Happiness
Diminishing Returns for Income and Wealth
Easterlin Paradox: Money doesn’t buy happiness
The Hedonic Treadmill – Money leads to more happiness but not for too long
Differences in happiness between countries
Government Policy and Happiness
Smarter Spending


Behavioural Economics for Dummies – Morris Altman
Thinking, Fast and Slow – Daniel Kahneman
Economic Naturalist – Robert Frank
Nudge – Richard Thaler & Cass Sunstein
Inside Job – DVD
Black Gold – DVD
The Corporation – DVD
How Algorithms Shape our World – TED Talk

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