Choice and Decision

Module overview

This module familiarises students with central concepts and findings in decision theory. It will explore in detail how decisions should be made, introducing normative benchmarks such as rationality and consistency, and will present how decisions are made, using both empirical and experimental findings and theoretical arguments. The module will illustrate the concepts by examining decision-making in a variety of economic contexts and environments, and discuss possibly implications for economic policies in these contexts. These contexts include decisions under risk and uncertainty and over time.

Linked modules

Prerequisites: MANG2069 OR ECON2044

Aims and Objectives

Learning Outcomes

Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

Apply logical analysis to decision-theoretic models and make use of inductive reasoning.
identify, analyse and interpret inconsistencies in choice data
Derive optimal and predict actual behavioural choices in economic decision-making.
Abstract essential features of economic decision-making to provide models of decison-making to evaluate (policy) changes in the decision environment.

Transferable and Generic Skills

Having successfully completed this module you will be able to:

Make consistent and rational choices.
Communicate logical arguments in brief statements

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

The relationship between economic policy recommendations and the assumptions on individuals' cognitive abilities and preferences that underlie such recommendations;
Analytical methods in decision theory, both theory and model based.
Relevant behavioural and cognitive phenomena that affect economic choices and decision-making.

Learning and Teaching

Teaching and learning methods

Lectures, masterclasses, experiments.

Study time
Type	Hours
Tutorial	8
Lecture	20
Independent Study	122
Total study time	150

Resources & Reading list

Textbooks

C. Gollier (2004). The Economics of Risk and Time. MIT Press.

M. Peterson (2017). An Introduction to Decision Theory. Cambridge University Press.

I. Gilboa (2009). Theory of Decision under Uncertainty. Economic Society Monographs.

S. Tadelis (2013). Game Theory: An Introduction (Chapters 1&2). Princeton University Press.

Assessment

Assessment strategy

Two gourp assignments during the semester (each worth 15% of the final mark) and a final written examination at the end of the semester (70%), supported by continuous formative assessment such as problem sets and experiments. This is the same for internal repeats. Assessment for external repeats and referral is through 100% final examination only.

Summative

This is how we’ll formally assess what you have learned in this module.

Breakdown
Method	Percentage contribution
Coursework assignment(s)	15%
Coursework assignment(s)	15%
Final Assessment	70%

Referral

This is how we’ll assess you if you don’t meet the criteria to pass this module.

Breakdown
Method	Percentage contribution
Final Assessment	100%

Repeat

An internal repeat is where you take all of your modules again, including any you passed. An external repeat is where you only re-take the modules you failed.

Breakdown
Method	Percentage contribution
Final Assessment	100%

Repeat Information

Repeat type: Internal & External