Description
FIN 283 BEHAVIORAL FINANCE Classical financial theory is based on several assumptions, including rational behavior of market participants and market efficiency. In recent decades empirical studies and experiments have accumulated a body of evidence that indicate that in reality people do not always behave rationally, demonstrating so-called anomalies which lead to market inefficiency.
Objectives of this course are to introduce students to alternative explanations of human behavior based on neoclassical utility theory and behavioral prospect theory; to study in detail financial market anomalies and paradoxes caused by irrational behavior; and to explore how managers and regulators can take irrational behavior into account in their decision making process. PREREQ: ECO 201, MTH 251, MTH 102