Behavioural Economics in Business & Pricing Applications

One of the critics of this paradigm is behavioral economics which attempts to explain and model how an economic agent actually behaves. In the process it wants to model people as ‘nice’ and also ‘people are stupid’ so there is a shift from how an agent ought to behave to how the agent is behaving. The type of questions that are raised are: is the utility maximizing rational consumer a good enough approximation of consumer behavior, or ‘expected utility’ a good enough approximation of decision making under uncertainty and in the process brings back psychology into economics. This is what economics has been invented for.

Programme Objective

The course attempts to see how the psychological insights in human behaviour helps in designing corporate and public policies towards pricing, saving and investment behaviour, finance, medical care, reduce poverty, improve choice architecture, and climate change, and resist temptation etc. Look at things from longer term perspective and from collective perspective for a sustainable living for people and their employers.

Content Outline

  • Introduction to Behavioural economics & how it is Different from Conventional Economics
  • Rationality Debate: Are Consumers Rational in their Choices? – Implications for Pricing
  • Choice Architecture – Framing & Anchoring in Pricing
  • Prospect Theory: Risky choices, Expected Utility theorem and its limitations
  • Heuristics and Biases in Decision Making – Anchoring Effect, Priming, Sunk Costs, Endowment Effect, and Status Quo Bias.
  • Economic Motivation and Social Behaviour – Herd Behaviour, Money Illusion, Placebo Effect, Success Paradox,
  • Inequality.
  • Social Learning - Irrationality & Predictably of Humans - Money, Corporation, God, and Nation-State – The Game of
  • Trust, Quality & Pricing Issues
  • Individual Differences – Role of Personality, Mood & Emotions, Signalling, Efficient Market Hypothesis, Time
  • preferences, Forward Planning Challenge
  • Pricing, Profits & Innovations in Pricing – How forms ignore pricing and its implications for viability – Applications in
  • Health and Social Sector
  • Case Studies in Transportation – Aviation, Railways, Travel Sector & FMCG Sector

Registration & Fees

Participants should be nominated by their organizations. The enclosed nomination form should be completed and returned with all the
details. The fee of the program is Rs. 40,000/- (Rupees Forty Thousand only) per participant which includes a professional fee and all
charges for lodging and boarding and supply of course materials. GST as applicable will be charged extra in addition to the programme
fee. Payment should be made by Cheque/NEFT/RTGS.

Discount Policy
With a view to our long-term relationship with your esteemed organization, we are pleased to introduce the discount policy in a particular
programme. The discount will be observed in the following conditions: (discount applicable in NEPAL also)
• 10% Discount against 3-5 nominations
• 20% Discount against more than 5 nominations