Behavioural Economics MSc Q&A
Following the launch of a new Behavioural Economics MSc at City University London, Programme Director Professor Philip Corr talks about the course and how behavioural economics can make a difference in the world.
City News (CN): What’s your role, and what is your area of research?
Philip Corr (PC): I developed and now am the Programme Director for the MSc in Behavioural Economics, which is taught by staff from the Departments of Psychology and Economics making it truly inter-disciplinary.
My research has focussed on basic neuropsychological systems of emotion, motivation and personality and, specifically in relation to behavioural economics, how they explain the heterogeneity of behaviours seen in economic domains – people do differ in their evaluation of potential loss and gain and these personality processes impact on important life decisions (e.g., decision to save for the future vs. spending in the short term).
In contrast to classical economics, behavioural economics attempts to account for the real behaviour of flesh-and-blood human beings who are not always, or even often, cold, logical calculating machines with selfish intentions. They are far more interesting than this account allows, and their less-than-rational judgements and decisions often make the world a better place (e.g., in being relatively selfless and cooperative).
CN: What is behavioural economics?
PC: Behavioural economics applies psychological insights into human behaviour to investigate how people make economic decisions under various conditions of constraint (e.g., time and knowledge) and influence (e.g., social pressure).
This field has emerged as an important area of modern economics and the social sciences more generally. The practical implications of behavioural economics are varied and significant and acknowledged to provide a powerful and cost-effective approach to improving human welfare.
CN: How can behavioural economics make a difference in the world?
PC: By understanding how real people make real judgements and decisions in real-life situation enables a better account of the pulls and pushes on them.
One major application of behavioural economics is seen in government ‘nudge’ campaigns to encourage people to enjoy better and longer lives by adopting healthier life styles (e.g., cessation of smoking and more exercise) and saving for retirement – linked to this are nudges to encourage better citizenship and fostering safer communities.
The social work is mostly about human decisions and behaviours, and the more we know about them the better able we are to nudge them in directions to the benefit of all.
CN: Tell me about the new Behaviour Economics MSc; what areas will students study and how is it structured?
PC: The MSc in Behavioural Economics at City aims to develop skills and knowledge in theoretical, analytical and applied areas in order to prepare students for a wide variety of roles.
Commercial organisations have long known the limitations of individual decision making and they routinely use this knowledge in their commercial practices (e.g., anchoring effect of minimum payment on credit cards).
The specific objectives of this MSc in Behavioural Economics are to equip students with knowledge, skills and an appreciation of the practical applications of the general field of behavioural economics. The programme is divided into the following modules:
- Principles of economics
- Cognitive and economic principles of rational choice
- Individual and social psychological processes
- Experimental economics and game theory
- Fundamental cognitive science
- Applied econometric and psychological research and analysis
- Professional aspects of behavioural economics
There is also an invited speakers programme of eminent people from the world of business, government and academia.
CN: Who is the course aimed at?
PC: The programme is aimed graduates who want to pursue a career in the general field of behavioural opportunities. There are a wide variety of opportunities in areas such as economic consultants undertaking marketing activities, health economics consultancy developing sales and markets for products (from branded medicines to health insurance schemes), political campaigns and public relations more generally to public policy specialists who advise on the choice architecture of decision making (e.g., transport decisions).
This Behavioural Economics postgraduate course would be especially valuable as a professional complement to individuals who already work in occupations which involve the need to understand the scientific dynamics of human decision making and behaviour (e.g., financial traders who require as much the right psychological attitude as appropriate strategy knowledge).
This programme of study is suitable for progression on to a PhD programme such as City's Economics PhD/MPhil programme, or an executive Masters programme (e.g., MBA).
CN: What will students get from the course, and what skills in particular will they learn?
PC: The programme provides students with a conceptual understanding of the behavioural and economic sciences that underpin the field of behavioural economics. Understanding how real people make real decisions is of utmost importance to theoretical economic understanding (preferences and utility), the practical application of models of human behaviour (e.g. government polices), and individual economic welfare (e.g. health and financial) which, for example, can be diminished by overweighting the present and underweighting the future (i.e. hyperbolic temporal discounting).
Consumer psychology is also dependent on the principles of behavioural economics (e.g., techniques of influence used in marketing and advertising), as are consultancies of various kinds (e.g. branding and public relations).
This systematic knowledge will allow students to evaluate critically current research through advanced scholarship in the discipline, including the ability to evaluate methodologies and develop critiques of them. Students will also be able to formulate new hypotheses and demonstrate originality in the application of their new knowledge and critical insight. This knowledge and awareness will translate into skills that enable them to appreciate practical applications and to apply behavioural economic principles and procedures across a wide range of professional and business contexts.
The knowledge, skills and the interests students develop during the course of their study will also be used in the research dissertation, which provides an opportunity to undertake a major piece of independent high-quality research supervised by a specialist from the Departments of Economics and Psychology.