Psychology and Economics
MIT OpenCourseWare presents this behavioral economics course, which examines where standard economic models of rational behavior break down and how psychological research helps explain the gap. Lectures review core assumptions in mainstream economics, such as stable preferences and full rationality, then work through evidence that real decision-making systematically departs from them, covering topics like loss aversion, self-control problems, and social preferences. Applications extend across labor economics, public economics, industrial organization, health economics, finance, and development economics, showing how behavioral insights reshape policy and market analysis in each field. The course includes lecture notes, readings, and assignments drawn from MIT's graduate economics curriculum, published freely through MIT OpenCourseWare under a Creative Commons license. No enrollment or certificate is offered, but all materials are available for self-study at your own pace, making it suited to students who already have a grounding in intermediate microeconomics.