8/12/2019 Paper Assignment(1)

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NOVA SOUTHEASTERN UNIVERSITY H. Wayne Huizenga School

of Business and Entrepreneurship MBA Program

ECN 5050 ‐ Economic Thinking

This exercise is designed to assess your ability to read and understand an economics paper in accordance with Course Competency (CC) #4: Apply key concepts such as opportunity costs and marginal principle to economic decision ‐making.

Since it was first awarded in 1969 to Ragnar Frisch and Jan Tinbergen, the Nobel Memorial Prize in Economic Sciences has been awarded 44 times and to 72 people. In this assignment, you we will survey a branch of the discipline of economics ‐ called Behavioral Economics ‐ through the lens of two outstanding scholars’ prize ‐winning contributions. They are referenced below. In doing so, we will explore the building blocks on which economics stands today (more importantly how it is changing or evolving), and will learn a great deal of intellectual history. You will also see how Nobel prize ‐winning contributions help explain the world around us. Among others, the research will expose you to questions such as: Why are people not always rational? Why do we sometimes make bad decisions? Is your judgment completely out of whack?

Behavioral Economics Key Research

In 1978 Herbert A. Simon won the Nobel Prize “for his pioneering research into the decision ‐making process within economic organizations.”

In 2002: Daniel Kahneman [shared with Vernon L. Smith] “for having integrated insights from psychological research into economic science, especially concerning human judgment and decision ‐making under uncertainty”

1. Simon, Herbert A. (1978) “Rational Decision ‐Making in Business Organizations.” Novel Prize Lecture http://www.nobelprize.org/nobel_prizes/economic ‐sciences/laureates/1978/simon ‐lecture.pdf

2. Kahneman 1, Daniel and Tversky, Amos. (1979). “Prospect Theory: An Analysis of Decision under Risk.” Econometrica, March 1979 http://www.princeton.edu/~kahneman/docs/Publications/prospect_theory.pdf

3. Rabin, Matthew. (1998). “Psychology and Economics,” Journal of Economic Literature, 36, 11 ‐46.

[36 pages] http://www.nyu.edu/econ/user/bisina/rabin_survey.pdf 4. Thaler, Richard H. (2000). “From Homo Economicus to Homo Sapiens,” Journal of Economic Perspectives, 14:1, 133 ‐141. [9 pages] http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.14.1.133

1 Optional: See also Kahneman, Daniel. (2011). “The Marvels and the Flaws of Intuitive Thinking.” Edge Magazine, September 12, 2011 http://edge.org/conversation/the ‐marvels ‐and ‐flaws ‐of ‐intuitive ‐thinking

8/12/2019 Paper Assignment(1)

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Assignment

You will write a short 5 to 7 page ‐long paper that will include a literature review of three of the four articles referenced above.

1. Identify the Big Question addressed in each of the three articles 2. Summarize the background information discussed in the articles, i.e., specify what work

had been done in the field (prior to that research) to answer the BIG QUESTION(S)? 3. What were the limitations of that work? What, according to the authors, needed to be

done next? (You are being asked here to discuss the context of that research – why the research was being done.)

4. What method/approach was used to answer the big questions? 5. Briefly summarize the results for the work or each experiment. Explain what the results

mean.

PS: After you finish the assignment, name your file LastnamePaper.doc (or PDF). Upload it to the Assignment Paper section of the Blackboard.