Behavioural Finance

MLSMM2124  2019-2020  Mons

Behavioural Finance
5.0 credits
30.0 h
2q

Teacher(s)
Language
Français
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)

Program title
Sigle
Credits
Prerequisites
Aims
Master [120] : Business Engineering
5
-

Master [120] : Business Engineering
5
-

Master [120] in Management
5
-

Master [120] in Management
5
-

Master [120] in Business Management
5
-