Consumer Behavior and Economic Decision Making


Course Objective

To gain insight into factors that affect consumer behavior and economic
decision making from a psychological perspective, for example, by
answering questions: "How to people decide what to spend their time and
money on?" and "How people make the right choices?".
This course has two major goals: The first goal is to get to know the
tools which economists use to understand and predict how perfectly
rational consumers would arrive at optimal decisions. These tools
include: utility maximization under budget constraints, expected utility
theory, and game theory. The second goal is to understand how and why
real consumers frequently deviate from these predictions and which
psychological factors influence their actual decision making processes.
We will cover, e.g., risk aversion, pricing, social preferences and
social learning strategies, conspicuous consumption, nudging, and brand

Course Content

This course starts by providing an insight into the traditional
economical rational choice models that are used to explain how consumer
make decisions, followed by a behavioral economics approach explaining
how consumers tend to deviate from rational decision-making. Topics such
as Kahneman's prospect theory and the effect of temporal discounting,
heuristics and biases are discussed. Subsequently, this course covers
different contexts in which consumers have to make decisions, such as
healthy living, environmental friendly behavior, spending money and
(dis)honesty. Questions will be answered such as "under which
circumstances do people tend to make irrational decisions", "why
overloaded and depleted consumers make irrational decisions?", "does
spending money on expensive goods actually make us happy?", "does an
increase in income lead to increased happiness?", "what incentive will
actually increase gym attendance for a prolonged period of time", "how
to reduce portion size", "what is ethical consumerism?", and "when are
people more likely to behave dishonestly".

Teaching Methods

Lectures and group assignments.

Method of Assessment

Group assignments and a written final exam comprised of both
multiple-choice and open-ended questions.


A set of relevant scientific papers and chapters, that are updated each

General Information

Course Code P_MCBAEDM
Credits 6 EC
Period P1
Course Level 400
Language of Tuition English
Faculty Fac. of Behavioural and Movement Science
Course Coordinator dr. J. Buczny
Examiner dr. J. Buczny
Teaching Staff dr. J. Buczny

Practical Information

You need to register for this course yourself

Teaching Methods Lecture