Behavioral economics is one of the most notable fields of modern economics. It draws insights from psychology, sociology, biology, and other social sciences.

On 24th of November, ISET hosted Teimuraz Gogsadze, a graduate of the Class of 2011, who gave an introductory lecture in behavioral economics. Gogsadze started his talk by formally defining the scope of behavioral economics. He then discussed the antecedents and historical context of the field, highlighting the importance of psychological realism of assumptions in economic modelling before the start of 20th century and the gradual removal of psychology from economics during the first half of the 20th century.

Gogsadze pointed out that behavioral economics is putting psychology back in economics and hence improving the explanatory power of economic models. After providing evidence contradicting the predictions of standard economic theories and explaining the basic bahavioral concepts, he outlined the core theoretical approaches in behavioral economics, such as prospect theory, hyperbolic discounting, other-regarding preferences and behavioral game theory and provided applications of these theories. The introductory lecture was concluded by introducing the recently published book in the field, "The Foundations of Behavioral Economic Analysis" (Oxford University Press) by Sanjit Dhami.