Description
FIN 306 - BEHAVIORAL FINANCE & ECONOMICS Classical financial theory is based on several assumptions, including rational behavior of market participants and market efficiency. In recent decades empirical studies and experiments accumulated a body of evidence 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 – neoclassical utility theory and behavioral prospect theory; to study in detail financial market anomalies and paradoxes, caused by irrational behavior; and to learn how managers and regulators can take irrational behavior into account in decision making process. Cross-listed with ECO 306. Prerequisite: ECO 201, MTH 251 "C-" or better, MTH 110 "C-" or better, FIN 220