Syllabus

Contacting Me

Email is a blessing and a curse. Instant communication is wonderful, but often email is the wrong medium to have a productive conversation about course material. Moreover, I get a lot of emails. This means that I am frequently triaging emails into two piles: “my house is burning down” and “everything else”. Your email is unlikely to make the former pile. So, asking questions about course material is always best done in-class or in office hours. Students always roll their eyes when professors say things like that, but it’s true that if you have a question, it’s very likely someone else has the same question.

That said, it benefits us both if any emails you send are clear and effective. There’s an (unfunny) joke in academia that professors (i) read an email until they find a question; (ii) respond to that question and; (iii) ignore the rest of the email. I won’t do this, but I think it is helpful to assume that the person on the receiving end of an email will operate this way.

Some general tips:

• Always include [EC895] in your subject line (brackets included).
• Use a short but informative subject line. For example: [EC895] Paper Advice
• Use your University-supplied email for University business. This helps me know who you are.
• One topic, one email. If you have multiple things to discuss, and you anticipate followup replies, it is best to split them into two emails so that the threads do not get cluttered.
• Ask direct questions. If you’re asking multiple questions in one email, use a bulleted list.
• Don’t ask questions that are answered by reading the syllabus. This drives me nuts.
• I’ve also found that students are overly polite in emails. I suppose it may be intimidating to email a professor, and you should try to match the style that the professor prefers, but I view email for a course as a casual form of communication. Said another way: get to the point. Students often send an entire paragraph introducing themselves, but if you use your University email address, and add the course name in the subject, I will already know who you are. Here’s an example of an excellent email:

Subject: [EC895] Assignment 2 Typo

Hi Prof. Bushong,

There seems to be a typo in the assignment on Question 2. The problem says to take a derivative with respect to a variable that doesn’t exist. Can you correct this or specify what you mean?

Thanks, Student McStudentFace

Now on to your regularly scheduled syllabus.

Overview

This course will demonstrate how decades of psychological research can be translated into models that can be incorporated into or examined by applied microeconomists. Topics include ways utility theory can be improved—such as incorporating reference dependence, social preferences, self image, and other belief-based tastes—and ways we can relax assumptions of perfect rationality—such as incorporating focusing effects, limited attention, biased prediction of future tastes, present-biased preferences, and biases in probabilistic judgment. As in other field courses, I insist on the importance of neoclassical theory as a benchmark. This course extends those theories to improve psychological realism and empirical predictions. Given the strengths of our graduate program at MSU, this class has largely an empirical orientation. We will explore empirical papers drawn from a variety of fields including but not limited to: asset pricing, corporate finance, consumption, development economics, environmental economics, health economics, industrial organization, labor economics, political economy, and public economics.

Who is this class for?

The class is primarily intended for applied students that do not intend to make psychology and economics one of their main focuses. Instead, it is intended for those who might want to apply a “behavioral” idea to their field of interest. The second main feature of the course will be its emphasis on transitioning students to research writing. Throughout the course I will do my best to point out what seem to me like good directions for research in behavioral economics (again, as applied to specific subfields). This course also covers a set of methodological topics, including “Thinking in Experiments” and a primer on structural behavioral economics.

Rules of the game

The prerequisites of this course are the same as any graduate-level field course; that is, an understanding of the economics of uncertainty and game theory at the graduate level is necessary. In addition, it is important that you have had exposure to econometrics and empirical research. You should be familiar with key econometrics topics like panel data models, discrete choice models, and the basics of maximum likelihood and minimum distance estimation. Although it is not a requirement for this course, I recommend all students take the set of courses including labor, public, and applied econometrics.

Grades should not be your motivation at this stage in your graduate career. Nevertheless, as a required element of instruction, I base grades on the following four components:

1. Three problem sets (30%). You are encouraged to work together on problem sets, but you must write up your solutions independently and indicate whom you worked with on the top of the relevant assignments.

2. “Weekly” paper reflections (30%). These reflections must be on one of the papers marked with a star on the syllabus; such papers will be discussed in the subsequent lecture. Reflections should be a page or two, but the emphasis is on thoughtful reading and commentary. The following may be useful prompts: (i) Why is the paper important? (ii) What are the core contributions of the paper? (iii) What did you like – or did not like – about the paper? (iv) What questions did you have about the paper? (v) Are there any additional ideas that you might want to pursue on this topic?

3. An extensive referee report (15%). The referee report can be written on a working paper or a published paper, but the published papers must be published in the last 7 years. I strongly encourage writing your referee report on a current-year job-market paper and will make relevant papers available to interested parties. The referee report should include the following: (i) a review of the empirical or theoretical methods used in the paper, (ii) careful discussion of which results/conclusions in the paper seem more or less robust, (iii) discussion of which results in the paper seem more more less novel in light of the broader literature (iii) suggestions for how this paper could be further improved. You should avoid being overly critical and instead write the type of referee report you would like to receive.

4. Empirical Paper (25%). I strongly encourage everyone to try to write an empirical paper related to topics in this course. This will help you to get started on your research, which is the ultimate purpose of this course. The paper can be written with up to two other students in the class. A two-page written proposal is due by Fall Break. The paper is due on the day of the final exam. The ideal paper contains a novel idea, a careful discussion of the empirical strategy, and preliminary empirical results. Realistically, you can do significantly less as long as you show significant effort. Two key notes: (i) you must do at least some preliminary analysis with data, since one purpose of the requirement is to make sure that you use Stata or R; (ii) you must use “field data”, (as opposed to experimental data.)¹ Since this course is relatively short, replication or extension of existing studies is perfectly fine and encouraged. Replication, in fact, is a good way to start original research, and more and more replication data sets are available on the AER, JPE, and QJE websites. Again, I encourage you to think about this requirement as a way to get a jump on research rather than a burden. If you have a topic you’d like to examine that is afield from this course, you may be able to pursue it, but you must speak with me.

Class Conduct

I support diversity of thoughts, perspective and experience. I will respect your identity on any dimension (including ethnicity, ancestry, national origin, color, sex, gender, sexual orientation, religion, ideological persuasion, disability, height, weight, age, family or veteran status) while understanding that you do not speak for any group. I expect you to do the same.

You may refer to me as “Ben” or as “Professor Bushong”, but I would prefer the former. My last name is pronounced boo-shong, where the second syllable rhymes with a piece of music from the 1990s by Sisqó.

Final Thoughts

I’m fully committed to making sure that you succeed in this class. I will make whatever accommodations I can to help you finish your exercises, do well on your projects, and learn and understand the class material. Deadlines, while firm, are there to help you. And under ordinary conditions, I am flexible and lenient with grading and course expectations when students face difficult challenges. Given the challenges of the past few years, that flexibility and leniency is intensified.

If you feel like you’re behind or not understanding everything, do not suffer in silence. Please contact me. I’m available via e-mail, or come see me.

Finally, as noted below, this term may have abrupt and wild changes. If such a change happens, I will do my best to ensure that this course is useful and thought-provoking. That said, I hope you will extend a bit of leeway in such a circumstance.