Caveat Academy course · Grades 10 to 12

Behavioral Economics

Why real people stray from the rational chooser of the textbook, and how economists measure it: anchors and base rates, loss aversion and framing, present bias and mental accounting, fairness games and market bubbles, and the design and ethics of nudges. You run the numbers yourself, at your own pace, with a certificate at the end.

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$19one-time · every device you sign in on
Buy · $19

Included with the Caveat Academy pass and Whole-school licenses. Or get it in the High school electives library, $119 for 66 items.

6 modules · 18 lessonsabout 13 hours$19

Six modules, eighteen lessons

Each module ends with a practice set that tracks mastery, an explain-it-back prompt, a short written response and a module exam. The final opens when every module is proficient; passing it earns a certificate with a verification code.

  1. Module 1: Rational choice and its limits

    Explain the assumptions of the standard model of choice, compute opportunity costs, and compare laboratory, field and natural experiments as evidence.

    • The standard model of choice
    • Bounded rationality and two systems of thinking
    • How behavioral economists test ideas
    about 2.1 h

  2. Module 2: Heuristics and biases

    Identify anchoring, availability, representativeness, overconfidence and confirmation bias in realistic situations, and correct a judgment using base rates and the outside view.

    • Anchoring
    • Availability and representativeness
    • Overconfidence and confirmation bias
    about 2.1 h

  3. Module 3: Prospect theory: gains, losses and reference points

    Apply prospect theory to compute the felt value of a gamble with loss aversion and explain the endowment effect, status quo bias and framing effects.

    • Reference points and loss aversion
    • The endowment effect and status quo bias
    • Framing and risk
    about 2.1 h

  4. Module 4: Time, self-control and mental accounting

    Compute choices under a present-bias factor, analyze mental accounting and sunk cost errors, and evaluate commitment devices such as Save More Tomorrow.

    • Present bias
    • Mental accounting
    • Commitment devices
    about 2.1 h

  5. Module 5: Fairness, cooperation and markets

    Compute payoffs in ultimatum, dictator, trust and public goods games and explain what fairness, reciprocity and herding mean for markets and investors.

    • Fairness: the ultimatum and dictator games
    • Trust, reciprocity and public goods
    • Herding, bubbles and behavioral finance
    about 2.1 h

  6. Module 6: Nudges, policy and ethics

    Design a nudge with the EAST principles, estimate the effect of a default, and evaluate a design as a fair nudge or as sludge.

    • Choice architecture and defaults
    • Designing nudges that work
    • The ethics and limits of nudging
    about 2.1 h

Try it before you start

This is how every lesson works: step through a worked example at your own pace, then answer a check and get the reason right away. Nothing here is saved; the course keeps your progress.

Module 4 · Present bias

Worked example: a preference reversal with a present-bias factor

  1. Assume example values: present-bias factor 0.8, and ignore ordinary discounting for simplicity.

A lesson check from each module

The checks need JavaScript turned on. The course itself works the same way.

What you get

Academics · High School$19 · included with the Academy pass and Whole-school licenses

What you finish with
A finished course in behavioral economics: you can compute an opportunity cost and the felt value of a bet under loss aversion, correct a judgment with base rates and the outside view, spot anchoring, framing, the endowment effect and the sunk cost fallacy, show a preference reversal with a present-bias factor, work out payoffs in ultimatum, trust and public goods games, estimate the effect of a default, and judge whether a design is a fair nudge or sludge. Passing the final earns a Caveat certificate of completion.
Who it is for
Students in grades 10 to 12 taking or curious about economics, psychology or a behavioral economics elective, students preparing for AP Microeconomics or AP Psychology who want the behavioral side, and homeschool families who want a complete course on how people really decide. It is general education, not financial advice.
Format
An online self-paced course: 6 modules and 18 lessons with worked examples you reveal step by step, 144 practice and exam items (multiple choice, numeric, fill-in and ordering), an explain-it-back prompt and a rubric-checked short response in every module, module exams with one retake, a 24-question final and a certificate with a verification code. About 13 hours in all; works on a phone or a computer.
Access
$19 one-time, yours on every device you sign in on; the course opens once you are signed in with it. Included with the Caveat Academy pass and Whole-school licenses. Also in the High school electives library ($119) and the Academics Suite pass ($149), and 1 more bundle. Progress is saved in this browser on this device, and the certificate page lets you download your record.
Where it lives
The High School space in Caveat Academics.
Support
Access, a receipt, a refund or a correction to the course: team@caveatacademic.com.

How it works

  1. Open the course and start Module 1. Each lesson takes about 25 to 35 minutes; two or three a week finishes the course in about a semester.
  2. Answer the checks as you read. Every answer shows the reason, and a miss links you back to the lesson that covers it.
  3. Finish each module with its practice set and exam. Proficient on every module opens the final; 70 percent passes it.
  4. Print or download your certificate and record from the certificate page.

Start the course

Sources and accuracy

The lessons are original writing by Caveat Academic Services. Facts were checked against these free, open references, which are also good places to read further.

  1. Nobel Prize, the 2002 economic sciences prize to Daniel Kahneman and the 2017 prize to Richard Thaler, with popular and scientific summaries: nobelprize.org
  2. Kahneman and Tversky, Prospect Theory: An Analysis of Decision under Risk, Econometrica, 1979; Tversky and Kahneman, Judgment under Uncertainty: Heuristics and Biases, Science, 1974
  3. Madrian and Shea, The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior, Quarterly Journal of Economics, 2001; Thaler and Benartzi, Save More Tomorrow, Journal of Political Economy, 2004
  4. The Behavioural Insights Team, EAST: Four Simple Ways to Apply Behavioural Insights (2014): bi.team
  5. Federal Trade Commission, Bringing Dark Patterns to Light, staff report, 2022: ftc.gov

Behavioral Economics is a self-paced course from Caveat Academic Services. Experimental results are reported as published, with their year; numbers marked as example numbers are for practice only. It is general education, not financial advice, does not replace a school course, is not affiliated with any exam program and awards no credit. Support: team@caveatacademic.com.