Master 2020/2021

Behavioral Finance

Category 'Best Course for Career Development'

Category 'Best Course for Broadening Horizons and Diversity of Knowledge and Skills'

Category 'Best Course for New Knowledge and Skills'

Type: Elective course (Finance)

Area of studies: Finance and Credit

Delivered by: School of Economics and Finance

Where: Faculty of Economics, Management, and Business Informatics

When: 2 year, 2 module

Mode of studies: distance learning

Instructors: Marina A. Zavertiaeva

Master’s programme: Finance

Language: English

ECTS credits: 3

Contact hours: 2

Course Syllabus

Abstract

Behavioral finance is the study of these and dozens of other financial decision-making errors that can be avoided, if we are familiar with the biases that cause them. In this course, we examine these predictable errors, and discover where we are most susceptible to them. This course is intended to guide participants towards better financial choices. Learn how to improve your spending, saving, and investing decisions for the future. Online course: https://www.coursera.org/learn/duke-behavioral-finance

Learning Objectives

• to develop students’ understanding of a behavioral perspective in economics and finance

Expected Learning Outcomes

• Understand the concept of limited rationality
• Able to read academic literature devoted to the behavioral prespective
• Knowledge of the main behavioral biases and heuristics
• Can apply behavioral finance concepts and models in particular situation

Course Contents

• The concept of limited rationality
  Classical economic model of consumer choice, which assumes that all of the decisions that we make are sensible, or “rational.” Rational choice axioms. Irrationality and limited rationality
• Irrationality in finance
  The discussion of multiple examples of how mental heuristics can lead us to make predictably sub-optimal financial decisions, both individually and across the entire financial markets. We will also discuss the many ways in which you can now improve your financial decision-making because of your deeper understanding of the innate biases that have tripped you up in the past!
• Heuristics and biases
  How our minds are inclined to distort probabilities, and either underestimate or overestimate the likelihood of certain outcomes. “Heuristic-driven bias”: the tendency to use rules of thumb that simplify the process of making decisions, but can also lead to predictable errors. These biases negatively affect our decision-making far more than we might expect; especially when the outcome of the decision has great significance for us.

Assessment Elements

• Тест
• Самостоятельная работа
  Самостоятельная работа проводится в форме эссе. Студенты выбирают какой-либо из пройденных поведенческих отклонений и описывают финансовую ситуацию, которая иллюстрирует это отклонение

Interim Assessment

• Interim assessment (2 module)
  0.3 * Самостоятельная работа + 0.7 * Тест

Bibliography

Recommended Core Bibliography

• Baker, H. K., Filbeck, G., & Nofsinger, J. R. (2019). Behavioral Finance : What Everyone Needs to Know®. New York, NY: Oxford University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=2002278

Recommended Additional Bibliography

• Shleifer, A. (2000). Inefficient Markets: An Introduction to Behavioral Finance. Oxford University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.oxp.obooks.9780198292272