23712 Behavioural Approach to Investment and Insurance Decisions

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Subject handbook information prior to 2025 is available in the Archives.

UTS: Business: Economics
Credit points: 3 cp
Result type: Grade and marks

Requisite(s): 23710 Behavioural Decision Making AND 23711 Behavioural Game Theory
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.

Description

This subject equips students with insights from Behavioural Economics to understand the drivers of financial decisions made by individuals and households. The subject will in particularly look at the many challenges individuals face to make good decisions: uncertainty about long-term preferences, difficulty to stick to long-term plans, inaccurate beliefs about future risks and opportunities. This knowledge is useful in a wide range of industry applications from product design to marketing.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:

1.	analyse the role of behavioural factors in individual financial decisions pertaining to saving, insurance, and investing
2.	critique economic and psychological theories about how individual make financial decisions

Contribution to the development of graduate attributes

The subject will look at the many challenges individuals face to make good financial decisions: uncertainty about long-term preferences, difficulty to stick to long-term plans, inaccurate beliefs about future risks and opportunities. This subject will, therefore, equip students with the insights from behavioural economics to explain the drivers of financial decisions made by individuals and households. This knowledge is useful in a wide range of industry applications from product design to marketing.

This subject contributes to developing the following graduate attribute(s):

Intellectual rigour and innovative problem solving
Professional and technical competence

This subject contributes to the development of the following program learning objective(s):

Develop novel solutions to address behavioural economic factors in business problems, including the methods to test and implement them (1.1)
Convey information clearly and fluently in written, verbal and visual form appropriate for the problem, data and stakeholders (2.1)

Teaching and learning strategies

This subject is going to articulate the teaching of principles of behavioural economics with a range of industry applications (banking, finance and insurance). It is taught through a blend of online resources, self-directed study and seminars. Subject content will be presented to students in a variety of formats (lecture slides, notes, videos, articles) and delivered both online and in-class. At the beginning of the unit, students are expected to review materials and complete tasks on their own before attending a weekly Zoom review session with the lecturer. Materials will be provided to students on the teaching management system, but students are also expected to seek information independently. At the end of the unit, seminars offer face to face interaction to review the material and engage students with the material. Seminars are highly interactive. Students will learn about behavioural economics concept and methods and apply these to solve problems and case studies in-class, either individually or in small groups. Students will receive individual feedback in-class from the lecturer.

Content (topics)

Information overload
Time preferences with applications in saving and investment
Risk preferences with applications in saving, insurance, and investment
Default bias

Assessment

Assessment task 1: Short essay (Individual)

Objective(s):	This addresses subject learning objective(s): 1 and 2
Weight:	40%
Criteria:	Identification and understanding of behavioural and economic factors Application of behavioural and economic factors to problem Clear written expression Organisation of the paper

Assessment task 2: Case Study (Individual)

Objective(s):	This addresses subject learning objective(s): 1 and 2
Weight:	60%
Criteria:	Identification and understanding of behavioural and economic factors Practical solution to the problem posed Clear written expression Organisation of the paper

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.