Behavioural Finance

mlsmm2124  2019-2020  Mons

Behavioural Finance
Note from June 29, 2020
Although we do not yet know how long the social distancing related to the Covid-19 pandemic will last, and regardless of the changes that had to be made in the evaluation of the June 2020 session in relation to what is provided for in this learning unit description, new learnig unit evaluation methods may still be adopted by the teachers; details of these methods have been - or will be - communicated to the students by the teachers, as soon as possible.
5 credits
30.0 h
Q2
Teacher(s)
Language
French
Content
Chapter 1: Course content and goals
  • What is behavioral finance? BF versus Traditional Finance (TF)?
  • How do we make decisions? Are they rational? Rational preferences?
Chapter 2: Foundations of finance and limitations
  • Uncertainty, Risk, Expected Utility Theory and Risk attitude
  • Diversification, CAPM and Market Efficiency
  • Allais’ Paradox and Prospect Theory
Chapter 3: Judgement and decisions biases
  • How do we make decisions? à Biases and heuristics + classification
  • Important biases in finance: very likely to affect financial decisions
Chapter 4 : Research methods
  • Experiments: What? Why? How?
  • Classification and design + Analysis of experimental data
Teaching methods
  • Usual and flipped classrooms (based on videos to be seen before coming in the classroom)
  • Simple computerized experiments will be organized in order to illustrate several concepts
Evaluation methods
  • Written exam (June) / Oral exam (August)
  • A part of the final grade will be based on individual / group assignments
Other information
If possible, students are requested to bring a device allowing an internet connection (tablet, smartphone or laptop). You will need this device to access the 'app' specifically developped to boost interaction in this course and to replicate several scientific experiments.
Bibliography
  • Daniel Kahneman, Thinking, Fast and Slow, Penguin Books, 2011.
  • Daniel Kahneman, Paul Slovic & Amos Tversky, Judgement under Uncertainty: Heuristics and Biases, Cambridge University Press, 1982
  • Richard Thaler & Cass Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness, Penguin Books, 2009
  • Louis Eeckhoudt & Christian Gollier, Les risques financiers, Ediscience international, 1992
  • Hersh Shefrin, Beyond Greed and Fear, Oxford University Press, 2002
Faculty or entity


Programmes / formations proposant cette unité d'enseignement (UE)

Title of the programme
Sigle
Credits
Prerequisites
Aims
Master [120] : Business Engineering

Master [120] : Business Engineering

Master [120] in Management

Master [120] in Management