25770 Behavioural Finance6cp
There are course requisites for this subject. See access conditions.
This subject provides students with the theoretical knowledge and practical tools necessary to understand how financial decisions are made in a vast array of settings, incorporating insights from individual and social psychology in modern financial theory.
Students will learn to understand the most common “rules of thumb” in financial decision-making, identify potential biases and mistakes that can arise. The course focuses around three pillars:
- Individuals: how do we make saving and investing decisions? What biases can cloud our decisions? What mistakes are commonly made?
- Professionals: do advisors/managers exhibit similar biases? How do advisors/managers behave if markets are not efficient?
- Financial Markets: are markets fully efficient? Are stock returns predictable?
The subject is based on a hands-on approach whereby students will develop and reinforce a set of analytical tools related to financial advice and investment decisions. We'll also consider how behavioural principles can help develop new financial services and products for consumers.
Detailed subject description.