Managing Behavior: Psychology, Economics, and Experiments - Part 1: Guiding Behavior at the Workplace

• In the first part, we discuss individual decision-making while taking the environment in which a person acts as given. For our analysis, we divide the whole decision-making process into two sub-processes: The judgment process, which refers to how people perceive and interpret their environment, and their actual decision processes, which refer to which activity or line of behavior they choose.

Even though individual decisions will be at the center, we will also extend our perspective by considering a person's behavior in the context of social interactions.

• In the second part, we thusplace the person into an organization and analyze their decision-making in an an interactive situation, where people'sbehavioral consequences are also affected by others with whom theyinteract. Following the literature on managerial economics, we examine how the misalignment of individual goals influences a person's behavior and decision-making. We then discuss possibilities for how to solve the resulting motivational problems by designing an appropriate incentive structure.

• Learning about the influences of psychology and sociology will help you understand why and how people make decisions.
• Answering questions regarding the previouslecture will help you to reconsider the contents discussed in class.
• Learning to write a research paper will help you to deal with a new topic and be useful for your BSc-thesis.
• Learning toanalyze an experimental paper will help you to think criticallyabout and applythe underlying theories.
• Learning how to design an experiment will be useful for identifying differences between theory and practice.
• Learning to speak in front of others will be useful for your university and business career.

• Experiment & Presentation: 45%
• Paper: 35%
• In-class assignments: 20%
• Participation: Tiebreaker