Behavioral Finance

Exam number: 6746

Semester: from 1st semester

Duration of the module: One semester

Form of the module (i.e. obligatory, elective etc.): Elective

Frequency of module offer: Summer semester 2016

Prerequisites: Bachelor in Business Administration/Economics or equivalent

Applicability of module for other study programmes:
Obligatory or elective in other study programmes. For further information check regulations of the study programme.

Person responsible for module: Prof. Ingo Geishecker, PhD

Name of the professor: Philipp E. Otto, PhD

Language of teaching: English

ECTS-Credits (based on the workload): 6

Workload and its composition (self-study, contact time):
Contact time (Lecture, tutorial etc.): 45 h; self-study: 135 h

Contact hours (per week in semester): 3

Methods and duration of examination:
Successful participation includes a presentation and the passing the final exam.

Emphasis of the grade for the final grade: Please check regulations of the study programme

Aim of the module (expected learning outcomes and competencies to be acquired):
This lecture investigates various areas of financial behaviour and its psychological basis. Emotions and social concerns can play an important role in financial decisions. Influences on decision behaviour, like nudging, herding, and other biases are systematically investigated in regard with financial literacy. Private as well as professional spending, saving, and investment decisions are often better described by bounded rationality and various choice heuristics. Normative theory is further challenged by player heterogeneity and variations in the individual decision processes. The course builds on microeconomic theory and reaches from behavioural game theory to experimental economics with its main focus on the financial domain.

Contents of the module:
I. Preliminaries
II. Bounded Rationality and Simple Heuristics
III. Individual Preferences and Social Motives
IV. Behavior of and within Groups
V. Decision Analysis and Research Techniques
VI. Choice Architecture and Decision Support
VII. Market Design and Investment Behavior
VIII. Corporate Finance and Managerial Decision Making
IX. Portfolio Choice and Wealth Management

Teaching and learning methods:
Lectures, tutorials

Literature (compulsory reading, recommended literature):
Angner, Erik (2012). A Course in Behavioral Economics. Palgrave Macmillan.
Camerer, Colin (2003). Behavioral Game Theory: experiments in strategic interaction. Princeton University Press.
Montier, James (2002). Behavioral Finance: Insights into Irrational Minds and Markets. John Wiley & Sons.
Shefrin, Hersh (2005). Behavioral Corporate Finance. McGraw-Hill Education.

Further information:
Registration in Moodle Viadrina required.