AEM 3350

Managerial & Employee Biases in Pricing/Incentives

Course Description

Course information provided by the 2025-2026 Catalog.

Standard economic theory assumes that pricing decisions and incentive contracts are developed and responded to within rational economic frameworks, yet behavioral economics reveals systematic biases that can lead to costly errors and systematic deviations from standard predictions. This course examines how psychological and cognitive biases affect managerial decision-making in two critical areas: setting prices and designing incentive systems for employees.

Prerequisites AEM 2600 or ECON 3030 or equivalent.

Last 4 Terms Offered (None)

Learning Outcomes

• Diagnose and analyze the role of behavioral biases in generating a pricing or incentive challenge facing a real company, or you will be able to propose a novel pricing strategy or incentive contract that harnesses insights from behavioral economics.
• Synthesize and employ the endings and key conclusions of case studies on behavioral biases in pricing and incentives.
• Develop novel theories about biases that affect managerial pricing decisions or employee responses to incentives.
• Articulate how behavioral biases affect managerial pricing decisions and worker responses to incentives.

View Enrollment Information