Psychology and Economics-F-

In small groups, you have to work with a research paper at the intersection of psychology and economics. You get access to the German Socio-Economic Panel (SOEP), which is a large and influential longitudinal dataset of German households. The SOEP covers in-depth information on individuals’ attitudes, values, and personalities. These data are enriched by respondents’ biographical background and financial balance sheet. With the respective assigned paper as the basis, each group has to (i) present in class its empirical design, results, and contribution relative to the existing literature; (ii) replicate its key empirical results using SOEP data; and (iii) come up with (and possibly implement) ideas to extend. Any codes (in Stata, R, or Python) or Excel sheets you create in the process have to be submitted at the day of the final presentation. Task (iii) further involves a short summary of the research idea aimed at extending the paper under study, which is also due on final-presentation day. The timetable for these tasks is below, written in italic.

After the last lecture, you must also individually write an essay reflecting on a key (childhood) experience and its long-run effects. Course concepts serve as a theoretical underpinning. For example, as a single child you might have been shaped by parents’ indulging behavior. You might identify that this is why Riemann’s hysterical form of fear suits your character, and how this affects your decision-making today.

Course Contents (Timetable Group Assignment):

1. Neoclassical and Behavioral Economics Refresher (Group and Paper Assignment)
2. Introduction to Emotional Finance
3. Literature on Psychology and Economics (Presentation of Paper Summary)
4. Introduction to Empirical Part of Group Assignment (Start Work on Replication)
5. Overview of Psychological Theories
6. Psycho-Analysis and Personalities
7. Tuckett’s Approach to Emotional Finance
8. Crowd Psychology and Herding on Capital Markets
9. Applications in Finance and Economics
10. Group Presentations on Empirical Work and Code and Summary Submission

Students will have sharpened their empirical skillset.

Students will have obtained foundations in psycholanalysis.

group assignment (40%)

class participation (20%)