HL DEMAND FE 2022
INTRODUCTION: Are you an ECON? What does it mean to be an ECON? Is this a realistic model or a disparaging term used to belittle classical economic views of economic agents?
Is it time to consider new perspectives on consumer behavior or will the classical models suffice?
The following activities refer to pages 58-60 of the digital textbook (PDF page numbering).
Is it time to consider new perspectives on consumer behavior or will the classical models suffice?
The following activities refer to pages 58-60 of the digital textbook (PDF page numbering).
Starter: What is an 'Econ'? Do you think it is realistic or disparaging? Find at least 5 characteristics of the 'Econ'.
LEARNING OUTCOMES:
Understand the income and substitution effect
Understand the concept of rational consumer choice
Explain some limitations of the assumptions of rational consumer choice
Define and explain bounded rationality, bounded self control, bounded selfishness and imperfect information
Define and explain cognitive biases
Define, explain and give examples of choice architecture
Define, explain and give examples of nudge theory.
Understand the income and substitution effect
Understand the concept of rational consumer choice
Explain some limitations of the assumptions of rational consumer choice
Define and explain bounded rationality, bounded self control, bounded selfishness and imperfect information
Define and explain cognitive biases
Define, explain and give examples of choice architecture
Define, explain and give examples of nudge theory.
THE INCOME AND SUBSTITUTION EFFECT AN ADDITIONAL EXPLANATION TO MARGINAL UTILITY THEORY
ACTIVITY 1: Watch this video on the substitution effect and take notes...
ACTIVITY 2: Watch this video on the income effect and take notes...
Behavioural Economics
Richard Thaler's work demonstrates why economics is hard
RICHARD THALER has won the Nobel prize in economic sciences this year for his contributions to behavioural economics. It's a well-deserved prize and a clarifying one, as far as economics is concerned.
| richard_thalers_work_demonstrates_why_econ_is_hard.docx |
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HOW REALISTIC ARE THE ASSUMPTIONS OF THE RATIONAL CONSUMER MODEL? |
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HOW CAN THE DUAL SYSTEM MODEL EXPLAIN HOW HUMANS ACTUALLY BEHAVE?
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Kahnemann's Dual System Model System 1 and System 2:
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Can you think of examples of how humans operate using both the automatic and reflective systems in their daily lives. Can you think of 2 examples that the average consumer might be faced with in a typical day?
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cognitive biases |
INTRODUCTION: Visit Kognity and access the chapter section: 'Critique of the maximising behaviour of consumers and producers'. Your teacher will you a cognitive bias to research, you should summarize the bias on a single powerpoint slide and give 3 everyday examples of how consumers demonstrate the cognitive bias.
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WHAT ARE THE COGNITIVE BIASES THAT AFFECT DECISION MAKING?
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choice architecture and NUDGE Theory |
How can behavioral economics be used to help consumers make better choices?
What is choice architecture?
How can 'Nudges' be used to make better choices?
What is choice architecture?
How can 'Nudges' be used to make better choices?
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3 Minute Introduction:
9 Minute Brief:
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16 Minute Overview:
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55 Minute Lecture:
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NUDGES.ORG
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BRITAIN'S BEHAVIOURAL INSIGHTS TEAM
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Can you create your own effective nudge?
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INTRODUCTION: Now that you have considered theories and concepts in the area of behavioral economics it is now time to begin to apply these ideas into practice. At the end of this enquiry you will publish a paper (800 words) advocating for upto 5 nudges that could be applied within the school to improve consumer choice in a particular area. You should use a similar process to the one that you used to research nudges last lesson.
First, you will want to identify the problem, you ought to provide data to substantiate that this is an actual issue. Examples of data could include photos, interviews, surveys etc.
Second, you will need to explain the behavioral explanations for why these choices are made; this will include references to the science of cognitive biases.
Third, you must engineer/create up to 5 nudges that could be applied to the problem in order to change consumer behavior through choice architecture; applying the principles behind nudge theory and ensuring consumer sovereignty. You can work in groups of up to 3 to complete the report.
You will have 2 higher level lessons to complete this.
First, you will want to identify the problem, you ought to provide data to substantiate that this is an actual issue. Examples of data could include photos, interviews, surveys etc.
Second, you will need to explain the behavioral explanations for why these choices are made; this will include references to the science of cognitive biases.
Third, you must engineer/create up to 5 nudges that could be applied to the problem in order to change consumer behavior through choice architecture; applying the principles behind nudge theory and ensuring consumer sovereignty. You can work in groups of up to 3 to complete the report.
You will have 2 higher level lessons to complete this.
| nudges_inquiry.docx |