BPF_BEFI Behavioral finance

Faculty of Economics and Administration
Spring 2024
Extent and Intensity
2/0/0. 4 credit(s). Type of Completion: zk (examination).
Teacher(s)
Mgr. Zuzana Gric, Ph.D. (lecturer)
Ing. Mgr. Martin Stachoň, Ph.D. (lecturer)
Guaranteed by
Mgr. Zuzana Gric, Ph.D.
Department of Finance – Faculty of Economics and Administration
Contact Person: Iva Havlíčková
Supplier department: Department of Finance – Faculty of Economics and Administration
Timetable
Thu 16:00–17:50 P304, except Thu 4. 4.
Course Enrolment Limitations
The course is also offered to the students of the fields other than those the course is directly associated with.
fields of study / plans the course is directly associated with
Course objectives
There is much evidence to suggest that the standard economic paradigms of rational investors and efficient markets do not adequately describe financial market behaviour. Behavioral finance studies how individuals' attitudes and behaviors affect their financial decisions and financial markets. This course summarizes current research on the behavioral aspects of individual investment decision making (microbehavioral finance) and how it differs from the efficient markets paradigm (macrobehavioral finance). In addition, the course examines behavioral finance models to explain investor behavior and market anomalies when rational models do not provide sufficient explanations. The course focuses, among other topics, on overconfidence, prospect theory, heuristics and the resulting biases, the impact of information on decision making, and framing areas.
Learning outcomes
At the end of this course, students will be able to orientate themselves in the field of behavioral finance; understand the behavioural aspects of individual financial decision-making; evaluate the (ir)rationality of financial decision-making in relation to the context of the decision; identify investor heuristics and biases; apply behavioural finance in practice or in financial decision-making or individual investing.
Syllabus
  • 1. Introduction to behavioural finance
  • 2. Behavioral aspects of financial decision making (concepts and theories)
  • 3. Market participants: buying and selling decisions in the financial market
  • 4. Market participants: long-term savings decisions
  • 5. Linking individual investment decisions and financial markets
  • 6. Financial markets: Efficiency and limits to arbitrage
  • 7. Financial Markets: Organization and the Role of Information
  • 8. Financial Markets: Case Studies 1
  • 9. Financial Markets: Case Studies 2
Literature
    required literature
  • HIRSHLEIFER, D. Behavioral finance. Annual Review of Financial Economics. 2015, vol. 7, p. 133-159. ISSN 1941-1367. info
  • BARBER, B M and T ODEAN. The behavior of individual investors. In Handbook of the Economics of Finance. Elsevier, 2013, p. 1533-1570. info
  • BARBERIS, N C. Thirty years of prospect theory in economics: A review and assessment. Journal of Economic Perspectives. Pittsburgh: AEA Publications, 2013, 27(1), p. 173-196. ISSN 1944-7965. info
  • BARBERIS, N and R THALER. A survey of behavioral finance. In Handbook of the Economics of Finance. 1st ed. 2003, p. 1053-1128. info
    recommended literature
  • STATMAN, M. Finance for normal people: how investors and markets behave. Oxford University Press., 2017. info
Teaching methods
Lectures and discussions.
Assessment methods
Written and oral exam, written test, essay.
Language of instruction
Czech
Further Comments
Study Materials
The course is taught annually.
The course is also listed under the following terms Spring 2016, Spring 2017, Spring 2018, Spring 2019, Spring 2020, Spring 2021, Spring 2022, Spring 2023, Spring 2025.
  • Enrolment Statistics (recent)
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