Behavioral Economics

Review fundamental principles of Behavioral Economics in the context of the human-centered design.

We all probably think of ourselves as rational decision-makers, when in fact we often make decisions based on incomplete information, frequently make “irrational” choices, and don’t always act in our own best interest. Yet as designers, we frequently assume our end users will see the same value in new offerings that we do, weigh all their options rationally, and be willing to shift their behaviors... and when this doesn’t happen, we are disappointed that our great ideas didn’t get traction. Behavioral Economics and the related field of cognitive psychology have contributed many experimentally-tested insights into how people actually perceive their options and make choices — not just what they say they want or will do — which can help companies across a wide variety of industries better design, differentiate and “de-risk” their offerings in today’s highly competitive marketplaces. This course will review fundamental principles from the discipline of Behavioral Economics in the context of the human-centered design process to help us better understand these normal human tendencies that lead people astray and explore how we can harness this knowledge to design more effective products, services, or interactions.

Learning Objectives

  • Expose students to the fundamental principles of Behavioral Economics and Cognitive Psychology.
  • Explore common behavioral challenges
  • Practice strategies to help us apply these principles to human-centered design issues
  • Consider the ethical dimension of “behavioral design”

Learning Outcomes

  • Familiarity with theories from Behavioral Economics and their relevance to design work
  • Hands-on experience with applying these theories to small projects
  • Ability to articulate and practice how the field of Behavioral Economics can inform design problems and solutions

Format & Grading
This class will be a combination of readings, in-class discussions and exercises, and short writing assignments. Grades will be based on 50% —Class participation (includes discussions and exercises) and 50% — out of class assignments. It should go without saying that students should attend class and complete assignments on time. 

Enrollment Constraints
No prerequisites. This course is open to all Institute of Design students.