- to develop students’ understanding of a behavioral perspective in economics and finance
- 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
- The concept of limited rationalityClassical 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 financeThe 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 biasesHow 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.
- Самостоятельная работаСамостоятельная работа проводится в форме эссе. Студенты выбирают какой-либо из пройденных поведенческих отклонений и описывают финансовую ситуацию, которая иллюстрирует это отклонение
- 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
- 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