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2018/2019  DIP-DFIRV1004U  Behavioural Finance

English Title
Behavioural Finance

Course information
Language English
Course ECTS 5 ECTS
Type Elective
Level Graduate Diploma
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 50
Study board
Study Board for Graduate Diploma in Business Administration
Course coordinator
  • Jimmy Martinez-Correa - Department of Economics (ECON)
  • Steffen Andersen - Department of Finance (FI)
Kontakt information: hdfr@cbs.dk
Main academic disciplines
  • Finance
  • Customer behaviour
  • Economics
Teaching methods
  • Blended learning
Last updated on 26-06-2018

Relevant links
Learning objectives
- Identificere og anvende psykologiske begreber til de finansielle markeder og den finansielle beslutningstagning.

- Sammenligne og adskille de mere psykologiske fra rationelle forklaringer på finansielle fænomener.

- Anvende de psykologiske forklaringer til nye problemer uden for disciplinen finansiering.

Kurset vil give de studerende en forståelse for hvordan den menneskelige psykologi fører til fordomme og fejl i de finansielle både egne og andres. Gennem en bevidsthed om disse fordomme og fejltagelser, vil de studerende blive bedre i stand til at afbøde dem, som branchefolk, som ledere i ikke-finansielle virksomheder, og som investorer af deres egne penge.
Course prerequisites
Kurset kræver kendskab til grundlæggende økonomisk teori og de finansielle markeder.
Examination
Behavioural Finance:
Exam ECTS 5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Winter
Aids Limited aids, see the list below:
The student is allowed to bring
  • USB key for uploading of notes, books and compendiums in a non-executable format (no applications, application fragments, IT tools etc.)
  • Any calculator
  • Books (including translation dictionaries), compendiums and notes in paper format
The student will have access to
  • Access to CBSLearn
  • Access to the personal drive (S-drive) on CBS´ network
  • Advanced IT application package
Make-up exam/re-exam Oral Exam
Duration: 20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Preparation time: No preparation
Examiner(s): If it is an internal examination, there will be a second internal examiner at the re-exam. If it is an external examination, there will be an external examiner.
Description of the exam procedure

Mundtlig syge-/omprøve:

Der trækkes et eller flere spørgsmål i centrale dele af pensum. Spørgsmålene besvares mundligt med anvendelse af relevante illustrationer, formler mv. I forlængelse heraf stilles spørgsmål i andre centrale dele af pensum. Karakteren fastsættes ud fra en helhedsvurdering af, i hvor høj grad besvarelsen opfylder fagets samlede læringsmål.
Course content and structure

Undervisningen består af 40 konfrontationstimer, i lektioner af enten 4 eller 2 timer.

 

Formålet med kurset "Behavioural Finance " er at give de studerende en bred forståelse af, hvordan den menneskelige psykologi påvirker finansielle beslutninger, med særlig henvisning til indvirkningen på de finansielle markeder, corporate finance og personlige finansielle beslutninger.

 

Der er to sider til kurset. Den "bløde " side omhandler beslutningsprocessen. Den "hårde " side vedrører moderne empirisk finansiering. Undervisningen i begge sider fokuserer mere på intuition og forståelse snarere end tekniske færdigheder. Undervisningen er forskningsbaseret, trække på resultaterne fra de nuværende akademisk litteratur der kobler sig til materialet i lærebogen.

 

De deltagende studerende forventes at have en grundlæggende forståelse for statistik og kunne foretage sædvanlige finansielle beregninger såsom nutidsværdiberegninger og forventede værdier. Tilsvarende forudsættes en generel viden om finansielle markeder, finansielle institutioner og finansielle instrumenter såsom optioner.
Description of the teaching methods
Fremmødeundervisning med online elementer.

Undervisningen forgår hovedsageligt på engelsk. Undervisningen skulle gerne være inkluderende for deltagerne, og deltagerne forventes at deltage aktivt i timerne.
Feedback during the teaching period
Efter aftale mellem underviser og studerende, vil der blive givet feedback igennem undervisningens timeøvelser på klasse-niveau, samt ved office hours på individuelt niveau.
Student workload
Skemalagt forelæsninger og øvelser 40 hours
Forberedelse inkl. eksamen 97,5 hours
Expected literature

Centrale Bog (CB):
Ackert, Lucy, and Richard Deaves, 2009, Behavioral Finance: Psychology, Decision-Making, and Markets.

 

Forløbende Supplerende Litteratur: (bliver opdateret midt august)

 

Baker, Malcolm, and Jeffrey Wurgler, 2007, Investor Sentiment in the Stock Market, Journal of Economic Perspectives 21(2): 129–151

 

Barber, Brad, and Terrance Odean, 2001, The Internet and the Investor, Journal of Economic Perspectives, 15(1): 41-54

 

Benartzi, Shlomo and Richard H. Thaler, 2007, Heuristics and Biases in Retirement Savings Behavior, Journal of Economic Perspectives 21(3): 81–104

 

Burnside, Craig, Martin Eichenbaum, Isaac Kleshchelski, and Sergio Rebelo, 2011, Do Peso Problems Explain the Returns to the Carry Trade? Review of Financial Studies, 24(3): 853-891

 

Caginalp, Gunduz, David Porter, and Vernon Smith, 2001, Financial Bubbles: Excess Cash, Momentum, and Incomplete Information, Journal of Behavioral Finance, 2(2): 80-99

 

Doya, Kenji, 2008, Modulators of decision making, Nature Neuroscience 11(4): 410-416

 

Garber, Peter M., 1990, Famous First Bubbles, Journal of Economic Perspectives, 4(2): 35-54

 

Hong, Harrison, and Jeremy C. Stein, 2007, Disagreement and the Stock Market, Journal of Economic Perspectives 21(2): 109–128

 

Hvidkjaer, Soeren, 2008, Small Trades and the Cross-Section of Stock Returns, Review of Financial Studies 21(3): 1123–1151

 

Kahneman, Daniel, and Dan Lovallo, 1993, Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk Taking, Management Science 39(1): 17-31

 

Loewenstein, George, and Richard Thaler, 1989, Anomalies: Intertemporal Choice, Journal of Economic Perspectives, 3(4): 181-193

 

Malmendier, Ulrike, and Geoffrey Tate, 2008, Who makes acquisitions? CEO overconfidence and the market's reaction, Journal of Financial Economics 89(1): 20-43

 

McClure, Samuel M., David I. Laibson, George Loewenstein, and Jonathan D. Cohen, 2004, Separate Neural Systems Value Immediate and Delayed Monetary Rewards, Science 306(5695): 503 – 507

 

Odean, Terrance, 1999, Do Investors Trade Too Much? American Economic Review, 89: 1279-1298

 

Platt, Michael L., and Scott A. Huettel, 2008, Risky business: the neuroeconomics of decision making under uncertainty, Nature Neuroscience, 11(4): 398-403

 

Reimers, Stian, Elizabeth A. Maylor, Neil Stewart, and Nick Chater, 2009, Associations between a one-shot delay discounting measure and age, income, education and real-world impulsive behavior, Personality and Individual Differences, 47(8): 973-978

 

Shiller, Robert J., 2003, From Efficient Markets Theory to Behavioral Finance, Journal of Economic Perspectives 17(1): 83-104

 

Siegel, Jeremy J., and Richard H. Thaler, 1997, Anomalies: The Equity Premium Puzzle, Journal of Economic Perspectives, 11(1): 191-200

 

Thaler, Richard H., 1999, Mental Accounting Matters, Journal of Behavioral Decision Making 12: 183-206

 

Thaler, Richard H., and Eric J. Johnson, 1999, Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice, Management Science 36(6): 643-660

 

Tversky, Amos, and Daniel Kahneman, 1974, Judgment under Uncertainty: Heuristics and Biases, Science 185(4157): 1124-1131

 

Anbefalede bøger:

Dette er bøger der er lette og sjove at læse. De giver in hurtigt insigt i hvordan behavioural finance bliver brugt ude i den virkelige verden. De er ikke en del af pensum.

 

Akerlof, George A., and Robert J. Shiller, 2009, Animal Spirits: How Human Psychology Drives the Economy, and Why it Matters for Global Capitalism. Princeton University Press

 

Ariely, Dan, 2009, Predictably Irrational, The Hidden Forces That Shape Our Decisions, 2nd Ed. Harper

 

Kahneman, Daniel, 2011, Thinking, Fast and Slow. Farrar, Straus and Giroux

 

Lewis, Michael, 2010, The Big Short: A True Story. W.W. Norton.

 

Shrefrin, Hersh, 2000, Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing. Oxford University Press

 

Thaler, Richard H., and Cass R. Sunstein, 2009, Nudge: Improving Decisions About Health, Wealth, and Happiness. Yale University Press

 

 

 
Last updated on 26-06-2018