Objectives:

Upon completion of this course, participants will be able to:

• Analyze the core principles of **Behavioral Economics (BE)** and their critique of the traditional rational choice model in finance.
• Identify key cognitive biases (e.g., present bias, loss aversion, status quo bias) and their impact on consumer financial decisions.
• Apply a **behavioral lens** to diagnose market failures and assess the effectiveness of existing financial regulations.
• Design and implement **behaviorally informed policy tools**, such as simplified disclosures, cooling-off periods, and smart default options.
• Understand the ethical considerations and potential limitations of using **Nudge Theory** in a regulatory context.
• Evaluate the role of BE in improving retirement savings uptake, debt management, and understanding complex products.
• Develop strategies for integrating **Experimental Economics** (e.g., A/B testing, field experiments) into regulatory policy research.
• Assess how behavioral insights can be used to improve the compliance behavior of financial institutions themselves.

• Regulators and Policy Makers from Central Banks and Financial Supervisory Authorities
• Policy Analysts and Economists in Government and International Organizations
• Consumer Protection Specialists and Market Conduct Supervisors
• Product Development and User Experience (UX) Designers in Financial Institutions
• Academics and Researchers focused on Behavioral Finance
• Senior Executives and Strategists interested in human-centered design
• FinTech Innovators leveraging behavioral insights in product design

• Case Studies analyzing regulatory interventions that utilized behavioral insights (e.g., UK FCA, US CFPB).
• Group Activities on diagnosing the behavioral failures behind a specific financial product.
• Discussions on the ethical boundaries of nudging and manipulating consumer choice.
• Individual Exercises on redesigning a loan disclosure form for behavioral effectiveness.
• Workshop on designing a simple A/B test for a retirement savings campaign.
• Expert presentation on the latest academic research and regulatory publications.

Unit 1: Foundations of Behavioral Economics

• Review of the standard neoclassical model of consumer behavior in finance.
• Introduction to **Prospect Theory** and the concept of Bounded Rationality.
• Key heuristics and cognitive biases: Anchoring, Framing, Availability Heuristic.
• Case studies demonstrating irrational financial decision-making in the real world.

• Using BE to understand and diagnose **market conduct failures** (e.g., poor credit choices).
• The concept of "sludge" (unnecessary friction) and its regulatory implications.
• Critique of traditional disclosure mandates (information overload).
• The ethical and policy debate surrounding regulatory paternalism vs. freedom of choice.

Unit 2: Behaviorally Informed Policy Design

• Applying **Nudge Theory** (Thaler & Sunstein) to financial products.
• Designing smart default options (e.g., auto-enrollment in retirement savings).
• The role of **Choice Architecture** in simplifying complex product selection.
• Utilizing commitment devices and planning prompts to improve follow-through.

• Simplifying and standardizing **disclosure documents** (e.g., Key Fact Statements).
• Implementing effective **cooling-off periods** for high-risk products.
• Using "Active Choice" mechanisms to overcome the status quo bias.
• Designing effective warnings and risk communication based on loss aversion.

Unit 3: Application to Financial Products and Services

• Behavioral strategies for increasing long-term savings and retirement planning.
• Using BE to combat predatory lending and address over-indebtedness.
• Designing insurance enrollment to overcome probability neglect and present bias.
• Applying behavioral principles to improve debt collection practices.

Unit 4: Experimental Methods in Regulatory Policy

• Introduction to **Experimental Economics** in a policy setting.
• Designing and conducting **Randomized Control Trials (RCTs)** to test policy effectiveness.
• Using A/B testing and field experiments for optimizing disclosures and notices.
• The importance of evidence-based policy design and iterative refinement.

Unit 5: Behavioral Compliance and Future Trends

• Applying BE to understand and influence the **compliance behavior** of firms.
• The role of organizational culture and compensation structures in market conduct.
• Regulatory response to "Dark Patterns" and manipulation in digital interfaces (UX/UI).
• The future role of AI and predictive analytics in personalized behavioral interventions.