Executive Summer School Behavioural Economics and the Modern Economy June 2016 (Five day executive programme)

Executive Summer School 2016

Behavioural Economics and the Modern Economy 13 – 17 June 2016 (Five day executive programme)

Welcome

Executive Summer School Academic Director, Professor Paul Willman

“The Executive Summer School is the primary channel for delivering LSE’s world class research to a business and practitioner audience”.

120

Years

LSE established in 1895

Key facts Participant Profile Average professional experience

66%

14 YEARS have a Master’s degree or above* * 2014 cohort data

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SIXTEEN Nobel Laureates

34 World Leaders (past and present) have taught or studied at LSE.

Who you learn with is as important as what you learn. Top 10 industry sectors represented: Financial Services • Banking Non UK Government • Consultancy International Trade • Education Energy and Utilities • IT and IT Services • Central Government Chemicals and Pharmaceuticals

94%

of participants would recommend the Executive Summer School. 2015 cohort evaluation survey

Key facts

79% Manager and above 56% Senior Manager and above 32% Director and above 12% C-Suite

Our client list includes; Bank of England • Bayer SAS • Brazilian Development Bank British Embassy • British Sky Broadcasting Ltd • Cancer Research UK Coco-Cola Enterprises • Council of Europe Development Bank • Credit Suisse Dutch Central Bank • Ernst & Young • European Central Bank European Commission • European Free Trade Association • Financial Services Authority • British Foreign and Commonwealth Office • German Development Cooperation • Google UK Ltd • Institute of Chartered Accountants • International Labour Organisation • KPMG • Microsoft Moet Hennessy • Morgan Stanley • Norwegian Ministry of Finance PricewaterhouseCoopers • Siemens AG • The World Bank • Transport for London • UNICEF • United Nations • U.S. Department of Justice Volkswagen • World Health Organisation • World Trade Organisation

Participants from over 90 Countries

45% EUROPE 17% UK 10% NORTH AMERICA 4% SOUTH AMERICA

12% ASIA AND MIDDLE EAST 6% AFRICA

6% AUSTRALASIA 2015 cohort data

Other sectors represented: Media & Arts • Insurance • Manufacturing, Engineering & Chemicals • Local Government, Public, Social & Welfare Services Telecommunications and Postal Services • Charities, Volunteer Sector & Trusts • Environmental Services • Household Goods & Textiles • Real Estate • Transport & Distribution • Utilities (Power & Water) • Automobiles • Health • Law & Legal Services Leisure & Tourism Mining & Metals • Research • Agriculture, Fishing & Farming Architecture, Construction & Civil Engineering • Electronics & Electrical Equipment • Hotels & Restaurants • Management Consultancy • Aerospace & Defence Economics & Statistical Services • Investment Banking/Stockbroking • Retail Trade Executive Summer School 2016 3

Time to think Be a part of our heritage and future success – LSE’s reputation as a global leader has been established over the 100 years since it was founded, and the School is routinely ranked amongst the world’s leading centres of learning. Learn from our world-class faculty – Course leaders are brought from a wide range of internationally renowned LSE departments. Benefit from a dynamic learning environment – Our lecturers will engage, challenge and equip you with the latest knowledge and skills by employing an array of learning methods – seminars, interactive lectures, case studies and simulation exercises. A focus on intellectual calibre – Experience first-hand how serious academic thinking can engage with real world problems. Place yourself at the crossroads of international debate – Being right in the heart of London, a global centre for business and finance, is fundamental to LSE’s identity as an outward looking institution with a dynamic involvement in world affairs.

The Executive Summer School remains true to the LSE’s historic Latin motto “rerum cognoscere causas” (to know the causes of things).

Director’s welcome Since its foundation in 1895, LSE has developed a reputation as the leading specialist social science institution in the world. The School is committed to providing academic engagement with real world issues across its core teaching and research activities. Our faculty are leaders in their fields. They are actively involved in policy issues, interacting constantly with governments around the world, with international organisations, and with business leaders. The LSE is no “ivory tower”. It is a place where the boundaries between academic thought and real world action break down. Our Executive Education programmes represent a critical platform in our landscape for both debate on and delivery of leading-edge thinking in every discipline. We are fully committed to the idea that what our students – not least 4 Executive Summer School 2016 2015

those in the Executive Summer School, seasoned and experienced each in their own field – bring to us is as important as what we seek to impart. We look forward to welcoming you to the School.

Professor Craig Calhoun LSE Director

Future leaders “The Executive Summer School courses will give you an insight into leading edge thinking in each discipline, and invite you to reflect on the big issues of the day.” Professor Christopher Pissarides 2010 Nobel Laureate

Executive Summer School 2016 5

Behavioural Economics and the Modern Economy

This course will bring participants up to date with modern developments in behavioural economics. Behavioural economics has revolutionised economics in the past thirty years by replacing the standard assumptions of perfect rationality and unbridled selfinterest with more psychologically realistic alternatives. Behavioural economists believe that economists have traditionally acted as if humans are smarter and harsher than they actually are. More importantly, the departures from rationality and selfishness are systematic – the scientific goal of behavioural economics is to understand how people actually behave.

The course will draw on psychological/experimental research as well as formal behavioural economic models. 6 Executive Summer School 2016

Programme benefits: • Understand the heuristics and biases that characterise key aspects of human decision making • Gain an overview of people’s social, risk and time preferences. In particular, how a better understanding of imperfect self-control and loss aversion have revolutionised economic debates in the past decade • Build a deeper understanding of the foundations of behavioural finance and some of the anomalies in financial markets • Acquire knowledge to help navigate some of the new regulatory solutions that behavioural economists advocate, and also the possibilities and limits of libertarian paternalism. This executive course is suitable for: • Professionals in the business and financial sector • Policy practitioners interested in applying behavioural insights to public policy.

Course overview

This course will bring students up to date with modern developments in behavioural economics, with the aim of providing a clear statement of both behavioural economic thought and its implications for both firms and regulators. It will draw heavily on psychological and experimental research and formal economic models, and would appeal to those who have read about nudges or biases in the popular press but want a more disciplined understanding before applying it to their sector. The course begins with an overview of rationality and the behavioural economics approach, and invites participants to discuss the problems and applications they are particularly interested in. We next discuss how people make decisions over time, followed by how they choose in risky situations with particular application to insurance markets. We will then examine the importance of fairness concerns to economic behaviour. Finally, we will look at how all of these factors affect financial markets, and conclude by discussing the new toolbox of regulatory responses to behavioural consumers. Key topics addressed: • Behavioural Finance: Trade, Insurance and Risk Perceptions • Planning over Time: Procrastination, Credit Markets, Housing, Saving and Retirement. • Limited Social Rationality: Winner’s Curse, Social Learning, Defensive Medicine • Libertarian Paternalism, Nudges.

Programme Schedule (Subject to change) Day one: • Introductions and course outline • Limits to rationality • Undersaving and financial (mis)planning Evening welcome reception Day two •  Procrastination and self-control •  Loss aversion Day three

Assessment:

• Loss aversion (Cont’d) • Heuristics and biases

Students will be assessed 50% based on group work and 50% based on the optional final written examination.

Day four • Behavioural finance • Bounded social rationality • Group discussion Dinner and drinks reception Day five

An outward looking institution with a dynamic involvement in world affairs, right in the heart of London.

• Fairness and social image • Happiness, nudge, libertarian paternalism • Option written examination Graduation All course content is correct at the time this information has first been made available to you. It is subject to change without notice; however any significant changes to course outlines will be notified in advance.

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Testimonials Behavioural Economics and the Modern Economy: Course testimonials Hear from our past participants “A very well organised programme. I enjoyed the academic nature of this particular course. Teaching staff were very knowledgeable, friendly and approachable.”
 European Investment Communications Manager, Capital International Ltd, UK

The hard work of lecturers paved the way to a comprehensive coverage of behavioural economics and an increasing understanding for an economic area that is developing rapidly. The group discussions with participants coming from various professional backgrounds offered stimulating insights and turned this programme into an enjoyable intellectual challenge. Participant on Beyond Rationality: Behavioural Economics and the Modern Economy

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World class faculty The Department of Economics at the LSE is one of the largest and most famous in the world. It is a leading research department, consistently being ranked in the top 20 economics departments worldwide. Course teachers are drawn from the full time staff of the Department of Economics at the London School of Economics.

Dr Matthew Levy is a Lecturer in Economics at LSE whose work focuses on applications of Behavioural Economics to Public Finance and Health Economics. He earned a B.Sc. in Economics from MIT and a Ph.D. in Economics from the University of California, Berkeley. He recently served as a Robert Wood Johnson Foundation Scholar in Health Policy Research at Harvard University.

Dr Kristof Madarasz is a Lecturer of Managerial Economics and Strategy at LSE. He has a B.Sc. in Mathematics and Economics from Budapest University, and an M.Phil. in Political Philosophy from Cambridge where he was a recipient of the Gates Scholarship from the Bill and Melinda Gates Foundation. Kristof obtained his Ph.D. in Economics from UC Berkeley in 2008. His research is on behavioural game theory with applications to bargaining and organizational design such as medical malpractice regulation as well as on the design of economic institutions in settings where perfect human rationality and foresight fail. He has published in Journal of Economic Theory, Review of Economic Studies and in Management Science.

The LSE’s Department of Economics is a distinguished and thriving environment for research and study. Executive Summer School 2016 9

Applying to LSE Programme fee:

Equality and diversity

The fee for our five-day programme is £3,650 and includes all course materials unless mentioned otherwise.

• Fluency in English

Equality and diversity are central to the aims and objectives of LSE. The School actively promotes the involvement of all students and staff in all areas of School life and seeks to ensure that they are free from discrimination on the grounds of gender, race, social background, disability, religious or political belief, age and sexual orientation. At LSE we recognise that the elimination of discrimination is integral to ensuring the best possible service to students, staff and visitors to the School.

• Undergraduate degree

Cancellation by you

• At least 2 years professional experience

Participants that cancel enrolment:

Course prerequisites:

• more than 45 days before the course begins will receive a full refund, less £100 application fee.

Please note that accommodation is not included. Our staff can advise you regarding executive apartment/ hotel rooms available near the LSE campus, and discounted rates where applicable. Essential participant criteria:

Some pre-course reading may be required. Application Please apply online via the LSE Executive Summer School website. We ask that you submit the following documentation together with your application. This will ensure that your application is dealt with expediently. • University transcript • Curriculum Vitae / Résumé • Sponsor details Assessment

 Once submitted, your application will be assessed by an academic in the relevant field. You will be notified of the outcome within a week of submission. Fees must be paid within 14 days of receiving the invoice in order to accept and secure a place.

• 45 – 30 days before the course begins will be charged a 25 per cent cancellation fee. • 29 – 15 days before the course begins will be charged a 50 per cent cancellation fee. • 14 days or less before the course begins will not receive a refund. Cancellation by us Occasionally it is necessary to cancel or postpone courses. Should a course be subject to a major change, applicants will be offered the option to either transfer to another course or receive a full refund. Any alterations to the programme will be made by the third week in May 2016. If you are coming from abroad, you are strongly advised to take out comprehensive travel insurance for the duration of your stay. Deferrals

Confirmation

Participants that defer a course:

Once you have accepted your offer and paid your fees, your place is confirmed. Further programme details will then be made available to you. Pre-course reading materials will be distributed to confirmed students from 14 days before the start of the course.

• more than 45 days before course begins will not be charged for the deferral. • 45 – 30 days before course begins will be charged 10 per cent of the tuition fee. • 29 – 15 days before course begins will be charged 25 per cent of the tuition fee. • 14 days or less will be charged 50 per cent of the tuition fee. Visas

Contact the programme coordinator: Tel: +44 (0)20 7849 4615 (Mon – Fri: 9.30am to 5.30pm GMT) Email: [email protected]

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For further information about obtaining the correct visa, see the LSE visa information pages or visit the UK Home Office website (gov.uk/check-uk-visa). If you are at all unsure about your visa requirements, please contact us and we will be happy to guide you.

LSE Executive Summer School The London School of Economics and Political Science Houghton Street London WC2A 2AE, UK Tel: +44 (0)20 7849 4615 (Mon – Fri: 9.30am to 5.30pm) Email: [email protected]

lse.ac.uk/ess

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