The field of Behavioural Finance examines the way psychological factors affect finance. Rooted in psychology and finance, it demonstrates that human emotions such as fear and greed, and limited cognitive resources, including finite attention, have central roles in shaping the financial markets.
The module will introduce students to the psychological and financial foundations of behavioural finance. It will explore central theories in behavioural finance and emotional finance. Applications for financial decision-making, services, legislation and ethics will be discussed. Research methods in behavioural finance will be explained.
· Understand central behavioural finance theories and their applications.
· Recognise the way psychological factors influence financial decision making
· Be familiar with research methods used in behavioural science.
· Be able to perform research on behavioural science.
· Foundations of behaviour: Challenging the classical assumptions of finance
· Financial psychology and the power of counter intuition
· Emotions, neurofinance and the new frontiers for understanding trading behaviour
· Evolutionary finance and adaptive markets
· Illusions, news analytics and market manipulation
Online exam 20% Group coursework 80%
Current students should refer to Moodle for specific details of the current year’s assessment.
· Mauboussin, Michael J. 2012. “Think Twice: Harnessing the Power of Counter Intuition” Harvard Business Review Press
· Burton, E., Shah, S., “Behavioural Finance: Understanding the Social, Cognitive and Economic Debates” 2013. Wiley.