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Prof Nava Ashraf 32L.3.18

Director of Research, Marshall Institute

This course is compulsory on the Executive MSc in Social Business and Entrepreneurship. This course is not available as an outside option.

     This course delivers insights from cutting edge research in psychology and economics, and asks students to use these insights to design solutions to significant social challenges. Students learn how to diagnose, design, deliver, and rigorously test products and services using the principles of behavioural economics and the methods of field experimentation.

     The course begins by describing the principle of coproduction: outcomes in health, education and similar fields are not simply given to end-users, but are produced by end-users themselves, interacting with supply-side factors.  Drawing on the insights from behavioural economics and using qualitative methods, students learn how to diagnose end-user needs, preferences and behaviour.  The course then explores how the psychological aspects of behaviour can be combined with the tools and structure of economics to induce behaviour change and improve outcomes, including the challenge of setting prices and designing incentives. Throughout the course there is emphasis upon the critical importance of effective measurement in the context of the social sector, where traditional market feedback mechanisms are typically absent and where mission-driven leaders’ evaluation of organisational impact can itself be subject to cognitive bias and distortion. Appropriate measurement in turn informs improvements in diagnosis and design.  This emphasis on appropriate measurement reinforces students’ learning in earlier modules of the programme, where they will be introduced to the principles and concepts of rigorous social impact evaluation.  The course concludes by exploring policy impact and how research can be translated into policy action.  Real world case studies are used at every stage of the course.

     This course is relevant to all those who wish to improve the effectiveness of social interventions and programmes across a range of diverse fields, whether such interventions are administered through the state or, increasingly, through private philanthropy and social entrepreneurship. The course tutor is Director of Research at the Marshall Institute.

Ten sessions of three hours each, delivered across two modules (teaching blocks).

Formative assessment will be through short case commentaries written by students on the basis of lecture/seminars.  These will be submitted and feedback given during the course.

There is no single textbook for the course. For an introduction to the field of behavioural economics, students should consult Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein (2009, Penguin) and Thinking, Fast and Slow, by Daniel Kahneman (2012, Penguin).

Other indicative readings are:

• Ashraf, N., Bandiera, O. and Jack, B.K.  2014. “No margin, no mission? A field experiment on incentives for public service delivery.” Journal of Public Economics 120 (December): 1-17
• Ashraf, N., Camerer, C. F. and Loewenstein, G. 2005. “Adam Smith, Behavioral Economist.” Journal of Economic Perspectives 19(3): 131–145.
• Glennerster, R. and Takavarasha, K. 2013. Running randomized evaluations: a practical guide. Princeton: Princeton University Press.
• Hirschman, A 1997. The passions and the interests: political arguments for capitalism before its triumph (20th anniversary edition). Princeton: Princeton University Press.
• Kamenica, E. 2012. “Behavioral Economics and Psychology of Incentives.” Annual Review of Economics 4(1): 427–452.

Further readings relevant to specific case studies will be provided during the course.

Take home exam (100%).