FIN30190 Behavioural Finance

Academic Year 2024/2025

Behavioural Finance applies the theoretical and experimental methodologies and results of the cognitive sciences to questions concerning the ways in which individuals actually make financial decisions, in contrast to the traditional idealised economic models of choice behaviour. It also considers the impact of various individual behavioural biases, feelings, and social forces on aggregate market behaviour, addressing issues such as market efficiency and financial crises.

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Curricular information is subject to change

Learning Outcomes:

On completing this module, you will be able to:
Contrast traditional and behavioural finance perspectives on investor decision making and asset pricing.
Discuss commonly recognised behavioural biases and their implications for investment decision making.
Discuss common problems in the real-world portfolio formation.
Evaluate how behavioural biases and social forces affect aggregate market behaviour and market efficiency.

Indicative Module Content:

1. Expected utility theory
2. Market efficiency and challenges
3. Prospect theory
4. Framing effect
5. Mental accounting and disposition effect
6. Representativeness and familiarity bias
7. Overconfidence
8. Portfolio formation
9. Emotion, investor sentiment, and bubbles
10. Social interaction and social forces
11. Self-control, and retirement saving

Student Effort Hours: 
Student Effort Type Hours
Specified Learning Activities

30
Autonomous Student Learning

50
Lectures

24
Tutorial

12
Total

116
Approaches to Teaching and Learning:
Lectures
Online questionnaire 
Requirements, Exclusions and Recommendations
Learning Recommendations:

Introduction to Finance
Principles of Finance
Portfolio Management and Investments


Module Requisites and Incompatibles
Not applicable to this module.
 
Assessment Strategy  
Description Timing Open Book Exam Component Scale Must Pass Component % of Final Grade

Not yet recorded.

Carry forward of passed components
Yes
 
Resit In Terminal Exam
Autumn No
Please see Student Jargon Buster for more information about remediation types and timing. 
Feedback Strategy/Strategies

• Group/class feedback, post-assessment

How will my Feedback be Delivered?

Not yet recorded.

Main reference/textbook: Ackert, L. and Deaves, R. (2010) Behavioral Finance: Psychology, Decision-Making, and Markets. Mason: Cengage Learning.
Other readings will be assigned during the course.
Name Role
Mr Yuting Chen Lecturer / Co-Lecturer