Guest Session - Economics

On September 6th, 2023, an enlightening session unfolded as Professor Mario Pezzino, the Director of Social Sciences at the University of Manchester, joined forces with Dr. Katherine Smith in collaboration with Pathways School's Business Management and Economics Departments, along with Pathways' College Advisory. Together, they embarked on a journey through the intricate realm of behavioral economics.

Professor Pezzino initiated the session by introducing the fundamentals of neo-classical economics versus behavioral economics, setting the stage for an intellectually stimulating discussion. He posed two fundamental questions: "Should compensation for teachers and doctors be based on performance?" and "Is more rigorous auditing the solution to reducing tax evasion?"

As the discussion progressed, students were guided through the concept of economic agents and the concept of bounded rationality.

The session delved further into Prospect Theory and Evolutionary Theory, shedding light on the intricacies of pay-for-performance systems and cautioning against their potential drawbacks.

Dr. Katherine Smith, an expert in the field of anthropology, introduced students to the study of human relations and elucidated the term 'ethnography.' This interdisciplinary approach provided valuable insights into real-world scenarios.

Interestingly, the session explored the psychology of tax compliance, revealing that people pay taxes not only to maintain their reputation but also due to intrinsic motivation, known as "tax morale." Prospect Theory came into play, highlighting the tendency to overestimate the chances of evading audits.

Overall, this collaborative effort between Pathways School's Business Management and Economics Departments, along with College Advisory, in partnership with Professor Mario Pezzino and Dr. Katherine Smith, illuminated the complex world of behavioral economics and underscored the importance of multidisciplinary learning in comprehending real-world dynamics.