FIN620 Behavioral Finance - Course overview

Course description

There is abundant evidence suggesting that the standard economic paradigm of rational investors does not adequately describe behavior in financial markets. Behavioral Finance examines how individuals' attitudes and behavior affect their financial decisions. This course reviews recent research on possible mispricing in financial markets due to the nature of psychological biases. Moreover, the course deals with behavioral finance models explaining investor-behavior or market anomalies when rational models provide no sufficient explanations. Topics will include among others overconfidence, prospect-theory, heuristic-driven biases and frame dependence.

Behavioral finance applies scientific research on human and social cognitive and emotional biases. After completing this course, students will be able to better understand economic decisions and how they affect market prices and returns. They will know how behavioral findings are integrated with neo-classical theory.

The language of instruction of this course is English.

Requirements: Completion of module CC501 and an finance course (FIN5xx) of your choice.

Exams

Download old exams here:

Spring Semester 07 (in German)

Fall Semester 07/08  (in German)

Spring Semester 08  (in German)

Fall Semester 08/09  (in German)

Spring Semester 09  (in German)

Spring Semester 10 (in English)

Spring Semester 10  (alternate examination date, in English)

Spring Semester 11 (in English)

Recommended literature

BarberisThaler

BarberOdean