2024/2025 KAN-CEADV2402U Irrationality, Economics and Finance: A Behavioral and Experimental Approach
English Title | |
Irrationality, Economics and Finance: A Behavioral and Experimental Approach |
Course information |
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Language | English |
Course ECTS | 7.5 ECTS |
Type | Elective |
Level | Full Degree Master |
Duration | One Semester |
Start time of the course | Autumn |
Timetable | Course schedule will be posted at calendar.cbs.dk |
Max. participants | 35 |
Study board |
Study Board for OECON and ECFI
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Course coordinator | |
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Teaching methods | |
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Last updated on 16-01-2024 |
Relevant links |
Learning objectives | ||||||||||||||||||||||||||
Students having sucessfully participated in the
course are able to:
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Course prerequisites | ||||||||||||||||||||||||||
1. A good knowledge of microeconomics,
statistics, and finance is recommended. Students who do not have
good knowledge of these topics but still wish to enroll, should be
prepared to invest a bit of time early in the course to catch up.
2. Please send in a 1 page motivational letter arguing why you want to participate and how you would contribute to the course through discussions and presentations, and a 1 page graduate grade transcript to ily.stu@cbs.dk before the registration deadline for elective courses. Please also remember to sign up through the online registration.. |
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Examination | ||||||||||||||||||||||||||
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Course content, structure and pedagogical approach | ||||||||||||||||||||||||||
Traditional economic theories assume that people's decisions are solely guided by self-interest and full rationality. Do these assumptions accurately describe how people and markets function in the real world? Or do we need to expand our economic toolbox to accommodate for other preferences and psychological factors that influence decisions? This course will study and compare classical and behavioral economics theories and review the available evidence in favor and against each approach. The course will provide students with the necessary tools to understand many and important current policy issues such as public policy and behavioral responses to climate change, socially responsible behaviors, health-related behaviors, investment decisions, as well as managerial decisions and incentive structures within organizations, among others.
The goal is not only to enable students to become consumers of the literature on behavioral and experimental economics, but also active contributors of original and testable ideas to improve the activities, processes, and organizational architecture of their future workplaces, whether those might be for-profit firms, non-profit organizations, or public institutions.
A cornerstone of the course are the weekly discussions
of relevant behavioral phenomena related to the students'
projects, which take the form of substantial personalized and
team feedback from the instructor, designed to sharpen the critical
thinking skills of students.
Finally, as concrete benefit to students from taking the course, a significant number of past students have used the final assignment for the course as a starting point for building their master thesis. |
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Description of the teaching methods | ||||||||||||||||||||||||||
The course has 36 hours of 18 sessions. In some weeks, the class activities will be extended to include experiments, student workshops, student presentations online, and exercises. | ||||||||||||||||||||||||||
Feedback during the teaching period | ||||||||||||||||||||||||||
I provide continuous feedback to students such
that they can understand the concepts covered in the course and
learn how to apply them both to research projects and real life
situations/problems. This continuous feedback is a key cornerstone
of the learning process in the course.
Feedback takes the form of discussions of research ideas that students identify themselves according to their interests. This creates student-motivated discussions (in class or online) in which other fellow students and instructors provide valuable feedback to refine and improve research ideas that eventually students have to crystalize in a written research project to be delivered at the end of the semesters. Instructors also strive to give students additional personalized feedback on research ideas/research project to students in the form of office hours, online synchronous meetings, written feedback and in class discussions. The main idea is to provide students with as much feedback as possible such that at the end of the semester students have a well-refined research idea that they can implement in a research project. |
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Student workload | ||||||||||||||||||||||||||
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Expected literature | ||||||||||||||||||||||||||
Most of the material covered during the course will be in the
form of research papers and chapters of selected books. Below you
will find a list of additional suggested readings that we might
also use in the course.
Baddeley, M. 2013. Behavioral Economics and Finance (New York: Rutledge). Camerer, C.F., Loewenstein, G. and Rabin, M. eds. 2003. Advances in Behavioral Economics. Princeton University Press. Kahneman, Daniel, and Amos Tversky, eds. 2000. Choices, Values and Frames. Cambridge University Press. Pompian, M.M. 2006. Behavioral Finance and Wealth Management. Wiley: New Jersey. Shefrin, H. 2008. A Behavioral Approach to Asset Pricing Theory, Elsevier. Second edition. Shleifer, A. 2000. Inefficient Capital Markets: An Introduction
to Behavioral Finance. Oxford UP.
Thaler, R. 1994. The Winner's Curse: Paradoxes and Anomalies of Economic Life. Princeton, N. J.: Princeton University Press. |