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ECO3020 Behavioural Economics

Semester 1, 2016 External
Units : 1
Faculty or Section : Faculty of Business, Education, Law and Arts
School or Department : School of Commerce
Student contribution band : Band 3
ASCED code : 091901 - Economics

Contents on this page


Examiner: Peter Phillips


Pre-requisite: ECO1000

Other requisites

Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at //


The literature that documents aspects of human behaviour that diverge from the predictions of the standard or orthodox theory of choice is called ?Behavioural Economics? or ?Psychology and Economics?. Upon completing this course students will be able to demonstrate an understanding of the orthodox model of choice, particularly in contexts characterised by risk and uncertainty, discuss the evidence that has been gathered to document divergences from the predictions of this model and use simple alternative models to explain those divergences. The course emphasises the relevance of both the orthodox model and the competing behavioural models to the formulation of sound business decisions, especially those decisions for which knowledge of consumer behaviour and investor behaviour is necessary.


The course outlines the orthodox treatments of choice and choice under risk and uncertainty. Evidence, both laboratory and field, that documents the ways in which human behaviour diverges from the predictions of this orthodox treatment is presented and critiqued. The most prominent alternative models are introduced and the strengths and weaknesses of these models are assessed with reference to orthodox models. The ways in which behavioural models may inform business decisions and strategy are explored in several common business contexts.


On successful completion of this course students should be able to:

  1. demonstrate an understanding of the orthodox and behavioural models of choice, especially under risk and uncertainty, and apply these models in real-world business contexts
  2. demonstrate an appreciation of both sides of one of the most enduring debates in the economics literature
  3. discuss the concept of preference ranking and use it to explain fundamental economic behaviour
  4. appreciate the distinction between ?risk? and ?uncertainty? in economics
  5. discuss prominent examples of ?behavioural bias? in the context of decision-making under risk and uncertainty.


Description Weighting(%)
1. Economic behaviour, preferences and choice 10.00
2. Risk and uncertainty 10.00
3. Expected value 10.00
4. Expected utility 15.00
5. Paradoxes and biases: evidence from the field and the laboratory 15.00
6. Prospect theory and other alternative models 20.00
7. Applications and extensions 20.00

Text and materials required to be purchased or accessed

ALL textbooks and materials available to be purchased can be sourced from USQ's Online Bookshop (unless otherwise stated). (

Please contact us for alternative purchase options from USQ Bookshop. (

  • Kahneman, D 2013, Thinking, fast and slow, Farrar, Straus & Giroux, New York, New York.

Reference materials

Reference materials are materials that, if accessed by students, may improve their knowledge and understanding of the material in the course and enrich their learning experience.

Student workload expectations

Activity Hours
Assessments 30.00
Private Study 135.00

Assessment details

Description Marks out of Wtg (%) Due Date Notes
ONLINE QUIZ 10 10 21 Apr 2016
ASSIGNMENT 30 30 23 May 2016
EXAMINATION 60 60 End S1 (see note 1)

  1. This is a restricted examination. The total working time for the examination is 2 hours. The examination date will be available via UConnect when the official examination timetable has been released.

Important assessment information

  1. Attendance requirements:
    Online: If you are an international student in Australia, you are advised to attend all classes at your campus. For all other students, there are no attendance requirements for this course. However, it is the students' responsibility to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

  2. Requirements for students to complete each assessment item satisfactorily:
    To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.)

  3. Penalties for late submission of required work:
    Students should refer to the Assessment Procedure (point 4.2.4)

  4. Requirements for student to be awarded a passing grade in the course:
    To be assured of receiving a passing grade a student must achieve at least 50% of the total weighted marks available for the course.

  5. Method used to combine assessment results to attain final grade:
    The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course.

  6. Examination information:
    This is a restricted examination. The only materials that candidates may use in the examination for this course are:
    1. writing materials. These must be non-electronic and free from material which could give the student an unfair advantage in the examination.
    2. an unmarked non-electronic translation dictionary (but not technical dictionary). A student whose first language is not English may take a translation dictionary into the examination room. A translation dictionary with any handwritten notes will not be permitted. Translation dictionaries will be subject to perusal and may be removed from the candidate's possession until appropriate disciplinary action is completed if found to contain material that could give the candidate an unfair advantage.
    3. a calculator which cannot hold textual information (students must indicate on their examination paper the make and model of any calculator(s) they use during the examination).

  7. Examination period when Deferred/Supplementary examinations will be held:
    Any Deferred or Supplementary examinations for this course will be held during the next examination period.

  8. University Student Policies:
    Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene University policies and practices. These policies can be found at

Assessment notes

  1. Referencing in assignments:
    Harvard (AGPS) is the referencing system required in this course. Students should use Harvard (AGPS) style in their assignments to format details of the information sources they have cited in their work. The Harvard (AGPS) style to be used is defined by the USQ Library's referencing guide at //