After completing this module, students will understand how basic psychological theories of how individuals make decisions under uncertainty, complex interdependence, and intertemporal dynamics help explain the behavior of individuals who drive change, such as entrepreneurs and innovators. You will have developed a basic understanding of key psychological and behavioral economic theories related to decision-making under risk and ambiguity. Identify and explain critical thinking and decision-making patterns in the work context. Participants will be able to apply theories to real-world situations.

In this module, we venture into the specifics of a wide range of decision-making theories. We travel through a diverse collection of seminal theories, including many that have formed the basis of Nobel Prize-winning research. We emphasize the interdisciplinary application of insights to ensure that students from a variety of disciplines can absorb and apply the knowledge gained in this module to their own professional decision-making scenarios. 

The topics include:

• Satisficing and dual process theories
• Risk aversion and ambiguity aversion
• Prospect theory and loss aversion
• Mental accounting and choice bracketing
• Risk reduction strategies: Hedging, learning, and real options
• Time preferences
• Status-quo, escalation of commitment, and the not-invented-here effect
• Personal initiative, sensation seeking, and entrepreneurship
• Rational herding and individually irrational learning
• Nash equilibrium and individually irrational cooperation
• Exploiting human decision making: Nudging & Sludging

The concepts and theories are presented in lectures. Students practice their theory application skills by presenting and discussing critical issues and applications of these theories in seminar.

You can find the complete module description here.