Course notes on behavioural economics and corporate decision making

Overview

In this online book, I apply the insights from behavioural economics to understand how firms and their agents make decisions, what pitfalls may exist in organisational decision making processes and how those decision making processes might be improved.

The book is based on a subject I teach in as part of UTS’s Graduate Certificate in Behavioural Economics. It is a half-size unit taught through a mix on online-self guided learning, online seminars and in-person weekend workshops. This subject also contained a section on behavioural finance that I have extracted and placed in a separate book.

The Graduate Certificate is for post-graduates with no assumed prior knowledge of economics or behavioural economics. The subject on which this book is based is taken after introductory economics and behavioural economics units.

The book covers the following areas:

• Economic foundations: What are the economic foundations of corporate decision making? Why do firms exists? How do firms make decisions? What drives a firm’s organisational architecture?
• Behavioural corporate decision making: What are some common failings of corporate decision making?
• Better decisions: What tools do we have to improve corporate decision making? How can we use models, expertise, nudging or debiasing?