Course Description

Behavioral economics is a relatively new field at the intersection of economics and psychology. It originally stemmed from a series of observations that the standard economic view of people as “rational expected utility maximizers” does not hold true in a number of contexts. This led to the psychologist Daniel Kahneman’s formulation of prospect theory and eventually, to his winning a Nobel Prize in Economics.

This course offers an introduction to behavioral economics and its applications to health and health care. In the course, we will examine the key conceptual underpinnings of the field. Then we will consider:

  • The structure of choice environments and the ways that people are influenced by how choices are framed.

  • The design of incentives and various approaches used to “supercharge” incentive programs using behavioral economic principles.

  • The use of social incentives and social comparisons as a way of achieving better physician performance.

Finally, the course will conclude with some consideration of how behavioral economics can be used in a policy context, and with the important question of when a “nudge” becomes a shove.

Specific Course Topics
  • Rationale for behavioral economics
  • Human decision making
  • Choice architecture and defaults
  • Incentives
  • Social forces
  • Behavioral economics and public policy


A brief lecture on lotteries, from Behavioral Economics and Decision Making

Learning Objectives

After completing this course, you will be able to:

  • Recognize the influence of common decision errors on observed patterns of human behavior.
  • Analyze the impact of choice architecture and defaults on behaviors related to health and health care.
  • Evaluate strategies for improving the effectiveness of incentive programs.
  • Reflect on the effectiveness of elements of your own work from a behavioral economics perspective.
  • Apply concepts from behavioral economics to the design of a health or health care intervention.
Final Deliverable

Building on the concepts learned throughout the course, designing an intervention along with a plan for sharing with stakeholders, and testing it is the final deliverable .

Behavioral Economics Applications and Impact

Visit this page for more about studying behavioral economics at Penn and to see real-world health care applications from alumni of the course.

Behavioral Economics and Health Care

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