Online course archive

A Beginner's Guide to Irrational Behavior

"A Beginner's Guide to Irrational Behavior" was an online course I taught through Coursera in 2013, and ran again in 2014. Each time, almost 200,000 people from around the world signed up — and over the years I've kept meeting them. At airports, at conferences, in restaurants and on planes. They tell me the course was useful to them, that it changed how they thought about their own decisions, and they ask me, often, where they can find it now. I wanted there to be an answer.

The course is an introduction to behavioral economics: the study of why human beings — who like to think of themselves as rational creatures — make so many decisions that work against their own interests. About money, about work, about food, about health, about love and risk and time and almost everything else. Across six weeks we look at the systematic ways our intuitions mislead us, the experiments that have made those failures visible, and the practical ways we can design around them.

I taught the course because I think behavioral economics is most useful when you actually use it. This site is here so you can.

Most of the work for this course was done by Aline Grueneisen-Holzwarth. It was really her project and I mostly did what I was told. We are both grateful to Matthew Duckworth for his amazing help in filming and editing the material.

Start with the introduction Browse the weeks

Course Promo

A 90‑second taste of what the course is about.

Section 01 — Introduction

Setting the stage

A short framing of what this course is and what I hope you will get out of it. The big question — the one that animates everything that follows — is simple: if we are as smart and as well‑meaning as we like to believe, why do we keep making the same kinds of decisions that we know will leave us worse off? In this opening lecture I lay out the basic premise of behavioral economics: that the mistakes we make are not random, but predictable, and that once you understand the patterns, you can begin to change them. Everything in the next six weeks builds from here.

Introduction

An overview of the course and the questions it tries to answer.

Section 02 — Weekly modules

Six weeks of lectures

The heart of the course. Each week takes one big idea — irrationality, money, dishonesty, work, self‑control, and emotion — and breaks it into short lectures that combine experiments, stories, and surprising results. The weeks build on each other but each can be watched on its own.

Week 1

Irrationality

The first week is about the most basic claim of behavioral economics: that our intuitions about how we make decisions are usually wrong. We start where it is hardest to argue — with optical illusions. When you look at the Adelson checker shadow or the Müller‑Lyer arrows, you don't just see a trick; you see a trick you cannot un‑see, even after you know exactly what it is. Vision is the system we trust the most, and it fails in predictable ways. The argument of the week is that decision‑making fails the same way.

From there we look at defaults — why a checkbox you never tick can change whether you become an organ donor, or how much you save for retirement. We examine choice sets and relativity (whether option C exists changes whether you choose A or B). We look at how a single decision can lock in long‑lasting consequences that we never quite revisit. And we end with the most unsettling result of all: how badly we learn from our own mistakes.

By the end of the week, "irrationality" should look less like a flaw and more like a feature — a predictable, designable feature of how human minds actually work.

Visual and Decision Illusions

Defaults

Do We Know Our Preferences?

Choice Sets and Relativity

The Long‑lasting Effects of Decisions

Learning from Our Mistakes

Week 2

The Psychology of Money

Money should be the easiest thing in the world for an economist to model. Every dollar is interchangeable with every other; a gain of ten dollars is the mirror image of a loss of ten; the cost of one thing should be measured against everything else you could have bought with the same money. None of this turns out to be how people actually think.

Week 2 walks through the systematic ways our relationship with money breaks the standard model. We look at opportunity cost — and how almost no one thinks about it correctly — and at relativity, which lets a $4,000 wedding meal feel cheap next to a $15,000 one. We examine the pain of paying (and why credit cards anesthetize it), mental accounting (why "vacation money" and "rent money" feel like different kinds of money), and fairness — why people will reject good deals out of spite when they feel cheated. We meet loss aversion and the endowment effect, the line between market norms and social norms (and why mixing them ends badly), the strange power of the word free, and the hidden cost of micro‑payments.

The aim is not to make you cynical about money. It is to help you notice when your wallet is making decisions for you.

Opportunity Cost

Relativity

The Pain of Paying

Mental Accounting

Fairness and Reciprocity

Loss Aversion and the Endowment Effect

Market and Social Norms

The Price of FREE

Micro‑payments

Week 3

Dishonesty

Week 3 is about cheating, and how very different real cheating looks from the cheating in economic textbooks. The standard model — which the economist Gary Becker proposed in the 1960s — says people cheat when the expected gain is greater than the expected cost: the size of the prize, multiplied against the chance of getting caught and the size of the punishment. It is a clean theory. It is also, almost entirely, wrong.

What our experiments have found, again and again, is that almost everyone cheats a little, almost no one cheats a lot, and the size of the bribe and the probability of getting caught barely move the needle. What does move it is something subtler: the gap between how we behave and how we still want to see ourselves — what we call the fudge factor. We will look at what shrinks the fudge factor (a small reminder of honesty, a signature at the top of the form rather than the bottom) and what expands it (conflicts of interest, fatigue, watching someone else get away with it, distance from the act). We close with how cheating drifts over time and across cultures.

The takeaway is not that people are bad. It is that almost all of us are good — and slightly dishonest — at the same time.

The Simple Model of Rational Crime

Shrinking and Expanding the Fudge Factor

Conflicts of Interest

Cheating Over Time and Across Cultures

Week 4

Labor and Motivation

What gets people to do good work? The standard answer — pay them more — turns out to be only a small part of the story, and sometimes the wrong part. Week 4 is about what really moves people in their jobs.

We start with the contrast between extrinsic motivation (rewards and punishments imposed from outside) and intrinsic motivation (the wanting that comes from inside) — and the surprising ways that paying people for things they used to enjoy can kill the joy. From there we look at meaning: how the smallest acknowledgement of effort, or its absence, can change how hard people are willing to work, and how much they need to be paid to keep working. We examine the IKEA effect — why we overvalue what we ourselves have made — and the not‑invented‑here bias, its cousin in the world of ideas. We look at cognitive dissonance and how it quietly rewrites our preferences after the fact. And we close with two of my favorite, most uncomfortable results: how monetary stress and social stress affect performance, and what very large bonuses actually do to the people who receive them.

The week is meant for anyone who manages, is managed, or has ever wondered why a job they once loved became a job they barely tolerate.

Extrinsic versus Intrinsic Motivation

Meaning

Acknowledgement

The IKEA Effect

Not‑Invented‑Here Bias

Cognitive Dissonance

Monetary Stress and Performance

Social Stress and Performance

Bonuses, Labor and Motivation

Week 5

Self‑Control

We know what we should do. We don't always do it. Week 5 is about the gap between the two — the most universal experience of irrationality, and the one that costs us the most over a lifetime.

We begin with the structure of the problem: present pleasures are vivid and immediate, while their future costs are abstract and discounted. The cigarette is real; the lung is theoretical. The cake is now; the regret is later. From there we look at reward substitution, the trick of attaching a present‑self pleasure to a future‑self goal so that the two stop fighting. We examine Ulysses contracts — commitments we make in advance to bind our later, weaker selves: locked savings accounts, gym buddies, prescriptions we send to ourselves a month at a time. We talk about what works and what merely feels like it works.

The week closes with what I think is the most important argument in the whole course: if self‑control is this hard for everyone, then how much of "willpower" is really an environmental design problem? The right question is rarely "how do I become a better person." It is usually "how do I arrange the world so that being a good version of myself stops being so expensive?"

Difficulty with Self‑Control

Reward Substitution

Ulysses Contracts

The Importance of Self‑Control: The Individual and the Environment

Week 6

Emotion

The final week is about feelings — the part of decision‑making that economics, for most of its history, has tried to leave out, and that turns out to be the hardest part to leave out.

We start with the two‑systems framing made famous by Daniel Kahneman: the fast, automatic, emotional system and the slow, deliberate, analytical one, and the way each of them quietly takes over different kinds of choices. We look at the identifiable victim effect — why a single name and face raise more money than a hundred thousand statistical lives — and at intra‑empathy mismatch, the strange phenomenon that in a calm state we cannot accurately predict how we will feel, or behave, in a hot one. (This has implications for everything from dieting to negotiating to how the criminal justice system imagines a person's "real" self.) We examine emotional decision‑making more directly — how a feeling carried over from one situation can quietly distort the next — and we close with risk: how dramatically our perception of danger is shaped by what is recent, what is vivid, and what we can see other people fearing.

By the end, the picture is not that emotion is the enemy of good decisions. It is that emotion is decisions, and pretending otherwise is the most expensive mistake of all.

Two Systems

Intra‑empathy Mismatch

The Identifiable Victim Effect

Emotional Decision Making

Risk Assessment

Section 03 — Conclusion

Pulling the threads together

A closing reflection — not a summary of what came before, but an attempt to say what I think behavioral economics is actually good for once you have it. The takeaway of these six weeks is not that we are doomed to bad decisions: it is the opposite. Knowing how we actually think, rather than how we wish we thought, gives us a fighting chance — to design our own lives a little better, to build products and policies that work with the people we are instead of against them, and to be a little gentler with the irrationality of the people around us, including ourselves.

Conclusion

A closing reflection on what behavioral economics is good for.

Section 04 — Guest lectures

Voices from the field

Across the course, thirteen guest researchers contributed lectures of their own — colleagues whose work I admire, and whose research expands on the themes of the weekly modules. Some go deeper on motivation, money, dishonesty, or self‑control; others open new doors entirely, into humor, disgust, romance, medicine, voting, and the economics of sex. Each talk is short, self‑contained, and worth its own afternoon. Together they are a small portrait of the field as it looked at the moment we filmed the course — and most of it has only become more relevant since.

Lalin Anik

Lionel Messi meets Salvador Dali: A motivation(al) story

Lalin Anik studies the things, beyond money, that pull human beings toward their work — and the surprising weight of small social rewards. In this talk she draws an unlikely line between Lionel Messi and Salvador Dali to make a single argument: motivation isn't a problem of paying people more, it is a problem of designing for what they already care about. If your own work has started to feel repetitive, or you manage people whose work has, this lecture is a useful set of small, practical tools — most of which cost nothing and many of which are routinely ignored.

Nina Mazar

Do Green Products Make Us Better People?

Nina Mazar's work asks an uncomfortable question: do good deeds make us better, or do they license us to behave a little worse? In a now‑classic study, she and Chen‑Bo Zhong showed that simply being exposed to green products made people more altruistic — but actually purchasing one made them more likely to lie and steal in subsequent tasks. The talk walks through the result and what it implies for everything from corporate social responsibility programs to your own running mental ledger of "I've earned this." Moral self‑image, it turns out, is something we spend down as well as build up.

Peter McGraw

What Makes Things Funny?

Peter McGraw runs the Humor Research Lab at the University of Colorado Boulder, and has spent years trying to do something most academics will not: take humor seriously as a research problem. His "benign violation" theory proposes that things are funny when they are simultaneously a violation of how things should be and benign in their consequences — too much violation and it's offensive, too little and it's boring. The lecture is part theory and part live demonstration, and along the way it changes how you'll listen to comedy. It also, quietly, says something useful about how to give a memorable presentation.

David Pizarro

The Surprising Way Disgust Shapes Our Thinking

David Pizarro's research starts from an evolutionary observation: disgust evolved to keep us away from contaminated food and disease. But the same emotional system, he argues, has been quietly recruited into much more abstract domains — moral judgment, consumer choice, and political belief. Across a series of clever experiments, he shows that small changes in physical disgust (a bad smell in the room, a dirty desk) can shift how harshly people judge unrelated moral acts and even where they fall on the political spectrum. It is one of the more unsettling lectures in the course, and one of the most memorable.

Eli Finkel

The Delusion of Romantic Self‑Insight

Eli Finkel studies romantic relationships, and his core claim in this lecture is bracing: most of us have far less insight into what we actually want in a partner than we believe we do. The whole architecture of online dating assumes that we know our preferences in advance and can match on them; Finkel's research suggests this assumption is mostly wrong. He also shows that the famous gender differences in mate preferences — men caring most about looks, women about earning potential — largely evaporate once people have actually met. A short talk that quietly upends a large industry.

Hedy Kober

Self‑regulation

Hedy Kober is a clinical neuroscientist at Yale who studies the brain mechanisms of craving and self‑control — particularly in addiction. Her talk takes us inside the neural circuits that make a cigarette, a drink, or a piece of cake feel briefly irresistible, and shows what is happening when self‑regulation works and when it fails. The hopeful part of the research is that the mental moves that successfully damp down craving — particularly cognitive reappraisal — are learnable and trainable. This lecture is a useful complement to Week 5: the same problem, viewed one layer deeper, in the brain itself.

Leslie John

Using People's Biases to do Good

Leslie John studies behavioral economics in service of public health, and the central move of her work is a kind of moral judo: take the very biases that economists usually treat as errors — loss aversion, the overweighting of small probabilities, present bias — and use them deliberately to help people behave more in line with their own goals. Her talk walks through several of these interventions, including incentive‑based programs that have helped people quit smoking, lose weight, and stick with medication regimes. It is one of the better answers to the question, "okay, but what do we actually do with all of this?"

Noah Goldstein

Persuasion: Provincial Norms

Noah Goldstein is a co‑author of the bestselling Yes! 50 Scientifically Proven Ways to Be Persuasive and a longtime collaborator of Robert Cialdini. In this lecture he walks through one of the most reliable findings in the persuasion literature — that telling people what other people are doing changes their behavior — and one important refinement: it works far better when those "other people" are local. Hotel guests reuse towels more when the sign mentions previous guests in their specific room than when it mentions guests in general. A small talk with a large practical payoff for anyone trying to nudge behavior at scale.

Kathleen Vohs

Sexual Economics: A model of heterosexual sexual behavior

Kathleen Vohs, one of the most cited social psychologists working today, presents Sexual Economics Theory: a framework that treats heterosexual sexual behavior using basic economic principles of supply, demand, and price. The framing sounds provocative, and parts of it are, but the lecture is a serious empirical exercise — an overview of the theory followed by new experiments testing its predictions about how men and women think, feel, and respond in sexual contexts. Whether or not you ultimately buy the model, the talk is a striking example of how economic reasoning can be turned on a domain that economics has historically declined to enter.

Mike Norton

Money, Time, and Happiness: Giving and Getting

Mike Norton is a professor at Harvard Business School and the co‑author of Happy Money: The Science of Smarter Spending. His central question is mercenary in the best sense — given that you have a finite amount of money and a finite number of seconds, how do you actually convert them into happiness? His research on prosocial behavior offers two answers that turn out to be more robust than they look: spending money on other people often beats spending it on yourself, and giving away time to other people often makes us feel less stretched for time, not more. A short, practical, surprisingly cheerful lecture.

Peter Ubel

Medical Decision Making Gone Wild?

Peter Ubel is a physician and behavioral scientist who studies the decisions people make when they are sick — and the decisions doctors make alongside them. His argument is that the modern medical encounter is precisely engineered to produce bad behavioral economics: information overload, time pressure, high stakes, fear, and an asymmetry of expertise that makes shared decision‑making genuinely hard. Drawing on his book Critical Decisions, Ubel walks through what goes wrong and what better‑designed conversations between doctors and patients might look like. If you have ever felt confused or rushed in a clinic, this lecture explains why — and what to do about it.

Gavan Fitzsimons

The Unconscious Consumer

Gavan Fitzsimons studies the parts of consumer behavior we are not aware of — the brand cues, primes, environmental nudges, and incidental exposures that shape what we buy long before we ever consciously deliberate. His lecture walks through a series of experiments showing how surprisingly small inputs (a logo glimpsed in passing, a competing brand on the shelf nearby, the music playing in the store) can move purchasing decisions in directions we would never endorse if asked directly. The result is a sharper picture of what choice actually is, and a useful corrective to the still‑popular idea that we shop with our eyes wide open.

Todd Rogers

Behavioral Science and Election Participation

Todd Rogers is a Harvard public‑policy professor who has run some of the largest behavioral field experiments ever conducted — many of them on the question of why people do, or do not, show up to vote. The lecture summarizes years of get‑out‑the‑vote research with two recurring themes: small linguistic changes can produce surprisingly large shifts in turnout (asking people whether they will be a voter is more effective than asking whether they will vote), and social pressure — the suggestion that whether you voted is a matter of public record — is one of the most powerful interventions political scientists have ever measured.