Thinking like an Economist: A Guide to Rational Decision Making

Thinking like an Economist: A Guide to Rational Decision Making
Course Trailer
The Economist's Tool Kit-6 Principles
1: The Economist's Tool Kit-6 Principles

Assemble the intellectual tool kit that will be used throughout the course to help you see the world from an economist's perspective. The first tools in your kit are six principles of human behavior accepted by nearly all economists as fundamental.

30 min
The Economist's Tool Kit-3 Core Concepts
2: The Economist's Tool Kit-3 Core Concepts

Complete your tool kit for economic thinking with three key concepts. Learn what an economist means by rational decision making; how marginal analysis is used to solve complex problems; and how you combine these first two concepts to understand optimization.

30 min
The Myth of "True Value"
3: The Myth of "True Value"

Put your new tools to work by examining a central conclusion in economic thinking: that rational individual choices can-even though they might not always-produce socially efficient results, where no person can be made better off without harming another....

30 min
Incentives and Optimal Choice
4: Incentives and Optimal Choice

How do economists think about the rights and rules that govern human interactions? Using real-life examples and classic problems like the Prisoner's Dilemma, plunge into questions of ownership, trade, and compensation and how ideas like incentives and responsibilities are intimately connected to them.

31 min
False Incentives, Real Harm
5: False Incentives, Real Harm

Two case studies involving tragic fires help you grasp two classic economic situations-the Tragedy of the Commons and the difficulties of providing a public good. Then, apply what you have learned to see how an economist would think about the even larger problem of global climate change.

33 min
The Economics of Ignorance
6: The Economics of Ignorance

In the first of three lectures examining how economists approach situations where information is incomplete, imperfect, or inaccurate, learn that there can indeed be an optimal level of ignorance. Also, explore some cost-efficient ways to reduce uncertainty.

30 min
Playing the Odds-Reason in a Risky World
7: Playing the Odds-Reason in a Risky World

People can strategically use information-selectively controlling, hiding, or subsidizing it-to influence the decisions of others. Examine concepts like the informational blind date and information asymmetry and see how they can lead to consequences like adverse selection and even the 2008 financial crisis.

32 min
The Economics of Information
8: The Economics of Information

Safety, like everything, has a cost; at some point, being a little safer costs more than it is worth. By studying how economists evaluate risk, learn how the concept of expected value permits rational decision making in situations with risk, but also brings its own set of dangers.

30 min
A Matter of Time-Predicting Future Values
9: A Matter of Time-Predicting Future Values

Time can be one of the most important factors in economic thought; when events occur matters. This lecture looks at how economists deal with this critical factor, introducing you to concepts such as nominal versus real value and present versus future value....

31 min
Think Again-Evaluating Risk in Purchasing
10: Think Again-Evaluating Risk in Purchasing

Apply several of the new tools you've been working with to learn how an economist might confront one complex choice you have likely faced yourself: whether to purchase that extended warranty on an expensive consumer item like a big-screen television.

31 min
Behavioral Economics-What Are We Thinking?
11: Behavioral Economics-What Are We Thinking?

Despite the predictive power of conventional economic presumptions about fundamental rationality, behavioral economists are showing that we sometimes do things that indeed seem irrational. Delve into several examples of this and possible means of overcoming these behaviors.

32 min
Acting like an Economist
12: Acting like an Economist

Apply what you've learned by thinking like an economist about three different issues: doing a cost-benefit analysis of crime from a criminal's perspective; altering our own structure of incentives to motivate healthier behaviors; and finding policy solutions to traffic congestion and its resulting pollution.

34 min
Randall Bartlett

The Great Courses have permitted me to share my enthusiasm for European History and Culture outside the classroom, reaching an engaged and passionate audience intent on learning.

ALMA MATER

Stanford University

INSTITUTION

Smith College

About Randall Bartlett

Dr. Randall Bartlett is Professor of Economics and Director of the Urban Studies Program at Smith College, where he has taught for 30 years. A graduate of Occidental College, he earned both his master's degree and doctorate from Stanford University and taught at Williams College and the University of Washington before joining the Smith faculty. A highly skilled teacher, Professor Bartlett has twice won all-college teaching awards at Smith and was the 2003 recipient of the college's Distinguished Professor Award. He has served at both the department and college levels as a teaching mentor to junior faculty and has been instrumental in developing a number of important programs at Smith, including founding and directing the Phoebe Reese Lewis Leadership Program and serving as the first director of the Public Policy Program. He also presents each fall a wildly popular financial literacy lecture series that is attended not only by students, faculty, and staff, but also by members of the community of Northampton. The author of numerous articles on economics and public life, Professor Bartlett has also written three books, including his most recent, The Crisis of America's Cities, which explores the problems and prospects of urban America.

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