NBA 6935

Managerial and Employee Biases in Pricing and Incentives

Course Description

Course information provided by the 2025-2026 Catalog.

Every day, managers make critical decisions about pricing and employee motivation—decisions worth millions of dollars—yet research shows that even experienced leaders systematically fall into psychological traps that destroy value. This course gives you the tools to avoid these costly mistakes and turn behavioral insights into competitive advantages, drawing on evidence from laboratory experiments, large-scale field studies, and real consulting partnerships with firms. You'll discover why smart companies often misprice their products, learning to recognize and avoid common pitfalls like anchoring effects, loss aversion, and overconfidence that lead to leaving money on the table or triggering destructive price wars. You'll also explore why most incentive schemes sound good on paper but fail in practice, examining how employees' limited attention, fairness concerns, and needs for respect and purpose shape their responses to contracts, so you can design compensation and performance systems that truly motivate rather than backfire. Beyond fixing your own blind spots, you'll learn to anticipate competitors' and employees' predictable biases—and when appropriate, leverage them strategically for competitive advantage. Through interactive cases, behavioral experiments, and practical frameworks grounded in real-world evidence, you'll develop immediately applicable skills for two of management's highest-stakes decisions: how to price competitively and how to motivate your team effectively—skills essential whether you're leading a business unit or advising clients as a consultant, and that will set you apart as a leader who makes better decisions.

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