20554 - PSYCHOLOGY, ECONOMIC ANALYSIS, AND BEHAVIORAL FINANCE
CLMG - M - IM - MM - AFC - CLEFIN-FINANCE - CLELI - ACME - DES-ESS - EMIT - GIO
Course taught in English
Go to class group/s: 31
The first is to introduce students to the discoveries of the new fields of behavioral economics and finance.
The second is to equip students with basic methods for detecting psychology effects using field data on consumer and market behavior. These methods can inform research, policy, and industry work.
The roadmap goes roughly as follows
- Limited memory and representativeness. Applications to expectation formation and stereotypes.
- Salience, Reference Points, Loss Aversion. Applications to demand for housing, demand for consumer goods, asset prices.
- Emotions and limited self-control. Applications to savings, retirement, and investment decisions.
- Behavioral Finance. Inefficient financial markets, limits to arbitrage, over and under-reaction to news, growth and value stocks, asset bubbles, excess trading, excess volatility, market sentiment, financial crises.
Articles, lecture notes, and other materials posted on the weblearning space.
Basic microeconomics of individual behavior (e.g., expected utility, intertemporal utility, and their maximization). Statistics of linear regression analysis.