Written as a self-contained, one-semester text, this book presents behavioral economics(specifically behavioral theories of decision) by comparing and contrasting them to mainstream (neoclassical) economics. Ideal for advanced undergraduate students of economics, philosophy, psychology, marketing, and political science. Explains orthodox neoclassical theory in each section and expands by discussing behavioral models. Many illustrations, examples, and exercises to illustrate the theory

A Course in Behavioral Economics is a concise and reader-friendly introduction to one of the most influential areas of economics today. Covering all core areas of the subject, the book requires no advanced mathematics and is full of examples, exercises, and problems drawn from the fields of economics, management, marketing, political science, and public policy, among others. It is an ideal first textbook for students coming to behavioral economics from a wide range of disciplines, and would also appeal to the general reader looking for a thorough and readable introduction to the subject. Available to lecturers: access to an Instructor's Manual at www.palgrave.com/economics/angner, containing sample syllabi, an instructor guide, sample handouts and examinations, and PowerPoint slides.

Preface INTRODUCTION 1 Introduction 1.1 What is this book? 1.2 The origins of behavioral economics 1.3 Methods 1.4 Looking ahead I CHOICE UNDER CERTAINTY 2 Rational Choice Under Certainty 2.1 Introduction 2.2 Preferences 2.3 Rational preferences Box: Logical symbols 2.4 Indifference and strict preference Box: How to do proofs 2.5 Preference orderings 2.6 Choice under certainty 2.7 Utility Box: A final word about proofs 2.8 Discussion 3 Decision-making Under Certainty 3.1 Introduction 3.2 Opportunity costs 3.3 Sunk costs 3.4 Menu dependence and the decoy effect 3.5 Loss aversion and the endowment effect 3.6 Anchoring and adjustment 3.7 Discussion II JUDGMENT UNDER RISK AND UNCERTAINTY 4 Probability Judgment 4.1 Introduction 4.2 Fundamentals of probability theory 4.3 Unconditional probability Box: Odds 4.4 Conditional probability 4.5 Total probability and Bayes's rule 4.6 Bayesian updating 4.7 Discussion 5 Judgment Under Risk and Uncertainty 5.1 Introduction 5.2 The gambler's fallacy 5.3 Conjunction and disjunction fallacies 5.4 Base-rate neglect 5.5 Confirmation bias 5.6 Availability 5.7 Discussion III CHOICE UNDER RISK AND UNCERTAINTY 6 Rational Choice Under Risk and Uncertainty 6.1 Introduction 6.2 Uncertainty 6.3 Expected value 6.4 Expected utility 6.5 Attitudes toward risk 6.6 Discussion 7 Decision-Making under Risk and Uncertainty 7.1 Introduction 7.2 Framing effects in decision-making under risk 7.3 Bundling and mental accounting 7.4 The Allais problem and the sure-thing principle 7.5 The Ellsberg problem and ambiguity aversion 7.6 Probability weighting 7.7 Discussion IV INTERTEMPORAL CHOICE 8 The Discounted Utility Model 8.1 Introduction 8.2 Interest rates 8.3 Exponential discounting Box: Discount rates 8.4 Discussion 9 Intertemporal Choice 9.1 Introduction 9.2 Hyperbolic discounting 9.3 Choosing not to choose 9.4 Preferences over profiles 9.5 Discussion V STRATEGIC INTERACTION 10 Analytical Game Theory 10.1 Introduction 10.2 Nash equilibrium in pure strategies 10.3 Nash equilibrium in mixed strategies 10.4 Equilibrium refinements 10.5 Discussion 11 Behavioral Game Theory 11.1 Introduction 11.2 Social preferences: altruism, envy, fairness, and justice 11.3 Intentions, reciprocity, and trust 11.4 Limited strategic thinking 11.5 Discussion VI CONCLUDING REMARKS 12 General Discussion 12.1 Introduction 12.2 Behavioral welfare economics 12.3 Assessing behavioral economics 12.4 Conclusion Answer Key Bibliography Index