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Dr Grace Lordan CON 4.02

This course is available on the Executive MSc in Behavioural Science. This course is not available as an outside option.

Lecture 1: Introduction

This lecture will give an overview of rational decision making from an economics perspective. Attention will also be paid to how students can identify credible empirical evidence from experiments (brief recap what was done in

PS469E) and beyond (cover natural experiments). We will also recap on the interpretation, advantages and disadvantages of observational studies.

Lecture 2: Finding a Job

This lecture will cover the unconscious biases that are encountered by corporate firms in:

1) Job Search

2) Job Advertising

3) Interview panels

Seminar 1: Lecture 2 will be complemented with a linked case-based seminar. 

Lecture 3: Day to Day Work

We will discuss biases in allocated bonuses, promotions, deciding who is viewed as ‘great’ and the allocations of prestigious projects in corporate firms. We will also cover biases in how different types of people are ‘heard’ and ‘seen’ in business, and biases in what a ‘successful’ person looks like. We will brainstorm, with the help of received literature in behavioural economics, viable interventions to combat blind spots in promotions and bonus allocations in the corporate setting.

Seminar 2: Lecture 3 will be complemented with a linked case-based seminar. 

Lecture 4: When at Work: Trading and Investment

This behavioral finance lecture will cover psychological biases in trade and high stake investment decisions in finance. It will cover the efficient markets hypothesis and outline the behavioral biases in finance that will likely disrupt its predictions.

Seminar 3: Lecture 4 will be complemented with a linked case-based seminar.

Lecture 5: When at Work: Complying with the Rules

We will begin by discussing the decision to comply to a firm’s policies and procedures within a cost benefit framework. In practice, compliance depends on a number of factors, including employee behavior which is subject to biases already covered. This lecture will cover the insights from behavioral science, which can be used to encourage compliance in the face of these biases.

Seminar 4: Lecture 5 will be complemented with a linked case-based seminar.

Seminar 5: Wrap up – bringing together of all the messages learned in the course. Student presentations based on group work on ‘what was learned’ each day.

12 hours and 30 minutes of lectures and 15 hours of seminars in the ST.

Students will be expected to produce 1 case study in the ST.

Case study with short questions that matches the style of the summative assessment 

Bertrand Marrianne and Duflo Ester. Field Experiments on Discrimination. in Handbook of Economic Field Experiments. Volume 1, pages 309 - 393 2017.

MLA: Gneezy, Uri, Kenneth L. Leonard, and John A. List. "Gender differences in competition: Evidence from a matrilineal and a patriarchal society." Econometrica 77.5 (2009): 1637-1664.

Johnston, David W. and Lordan, Grace (2016) Racial prejudice and labour market penalties during economic downturns European Economic Review, 84. 57-75 

Lordan, Grace and Pischke, Jorn-Steffen (2016) Does Rosie like riveting? Male and female occupational choices NBER working paper, 22495. National Bureau of Economic Research, Cambridge, USA.

Kandasamy, Narayanan, et al. "Cortisol shifts financial risk preferences." Proceedings of the National Academy of Sciences 111.9 (2014): 3608-3613.

Shiller, Robert J. Finance and the Good Society, Princeton: Princeton University Press, 2012.

Fama, Eugene, “Market Efficiency, Long-Term Returns, and Behavioral Finance,” Journal of Financial Economics. 

Coursework (100%, 4000 words) post-summer term.

Case study with ten short questions.