This course seeks to better understand how psychological variables affect economic outcomes. More specifically, we will focus on the psychological processes and biases underlying decision-making with an emphasis on how to incorporate such insights into business, marketing, and investment strategies. The course has two facets: first, it gives students a broad overview of important results from various behavioral sciences (e.g., social and cognitive psychology, consumer research) that clarify how people really make decisions (in contrast to the rational expectations model underlying classical economic theories); second, it provides students with practical advice about applying these findings to topics in marketing, management, and finance (with an approximately equal focus on each throughout the course). Topics covered include: risk, the time value of money, regression models, influence and persuasion, strategic interactions and game theory, and pricing techniques. Class time will be devoted to a combination of lectures, discussion, exercises, and casework. Grading will be based on class participation, short individual assignments, and a final exam.

Eric Johnson

Norman Eig Professor of Business

Eric Johnson is a faculty member at the Columbia Business School at Columbia University where he is the inaugural holder of the Norman Eig Chair of Business, and Director of the Center for Decision Sciences. His research examines the interface between Behavioral Decision Research, Economics and the decisions made by consumers, managers, and their implications for public policy, markets and marketing. Among other topics...

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