Einführung Blockseminar Homo oeconomicus vs Homer Simpson What behavioural economics teaches us about human rationality and what its implications are for consumer sovereignty and paternalism

Behavioural economics has demonstrated that humans do not always act in accordance with economic rationality postulates. In many situations, real world individuals use heuristics instead of utility maximization, are subject to biases and distortions, and act in various other non-optimal ways. In short: instead of being like homo oeconomicus, individuals seem to be more like Homer Simpson. In this seminar, we will examine the extent to which individuals fail to act rationally as defined by economic rationality postulates. We will further examine to what extent these shortfalls have consequences for human autonomy and whether we can still uphold the value judgement of consumer sovereignty. Consumer sovereignty is a value judgement dearly held by economists and defended often on the grounds that the individual knows best about its interests. If this is no longer the case, as behavioural economics suggests, we might need to consider paternalism in order to improve individuals’ welfare. A further aim of our seminar is thus to elucidate the relationship between rationality (and a lack thereof) and paternalism and discuss recent attempts at improving individual welfare by means of -nudging” consumers into more rational behaviour (defended under the label of -libertarian paternalism”). Seminar language is English. Seminar theses are to be written in English and seminar presentations are to be given in English. Application for the seminar: Please read these instructions carefully because we will disregard applications that do not conform to these instructions. To apply for the seminar, you can register from the moment this notice is posted in HIS. Two weeks before the introductory session (i.e. two weeks before 10.02.2014) we will hold a lottery and free seminar slots are randomly distributed between all individuals who have registered in the HIS. We will contact the winners of the seminar slots as soon as possible, who then have one week to register in HIS for the exam and personally sign a participation sheet at the administrative office of the chair (Wiso A, 3209B, NP4). If you fail to comply with these rules, we will give your seminar slot to another applicant. Exceptions: There are no exceptions. If you feel you qualify as -Härtefall” you will need to apply as above and provide a written (!) statement to the chair before the lottery takes place and give an extensive justification of your case. Should you qualify for special treatment we will notify you of this before the lottery. If we reject your application for special treatment, you will nevertheless participate in the lottery of free seminar slots. Mandatory Dates: The mandatory introductory session will take place in the last week of the present semester (WiSe, 2013/2014), namely on: 10.02.2014, 18:00-20.00 in room 0212, Nora-Platiel.Str 6. In this introductory session, participants will be given an overview on formal requirements of the seminar and an introduction to the seminar topic as well as the topics for individual seminar theses. Topics for theses can be chosen after this session according to rules further specified during the introductory session. The seminar thesis is due during the following semester (22.06.2014, 23:59 MEZ) and presentations and discussion of individual theses will take place Saturday/Sunday, 12/13.07.2014. Requirements: Seminar thesis (ca. 15 pages, English, to be handed in 22.06.2014, 23:59 MEZ at the latest); Seminar presentation (15-20 minutes), acting as discussant of a second paper (5 minutes) as well as active participation during the seminar sessions. Grades: Seminar thesis counts 2/3 of the final grade, the rest will count 1/3. Maximum number of participants: 30 Administrative questions: Please contact Claudia Städele (staedele@uni-kassel.de) regarding administrative questions. Plagiarism will not be tolerated. • Hausman, D., McPherson, M. (2006). Economic Analysis and Moral Philosophy. 2nd ed. Cambridge University Press, chs. 4-6. • Dan Ariely (2008), Predictably Irrational. New York: HarperCollins, • Thaler, R., Sunstein, C.R. (2008), Nudge - Improving Decisions about Health, Wealth and Happiness. Penguin. FB 07 Institut für Volkswirtschaftslehre Uni Kassel WiSe 2013/14 Lehrveranstaltungspool FB 07 Privatdozent Dr. Binder Martin Privatdozent