FD 662: OEllA YIORAL FINANCE
CourR Objcc1hu:
The objcc:1i,•e of 1hi, papa
1>
10 introduce the ,1udcn1> 10 1hc rolc of hull\iln bcha, iour "'
linanc:1Jl decision malang. h discusses the ,11r,ous biases. Equ,ry Pn-m,um ruv.lc$ and
art>nragc opponunnu:,
LC'amlng Out~omu:
Thu ,.,11 cn;,ble the •tudcni.
•
To undersuuid somc p5>cholog.ical bw« '"h1Ch lead 10 ,-..nous w,onmlics
•
To undcmand the "arious cffcas likc mdowmern. dispos:i1ion etc.
•
To undcn.1ond 1n\CSlors' bcl111, iour ,n scrondary markcis
Caune Co111rn11:
L11h I
ln1roduc1ion 10 Ocha, ioral Fm.:incc-Ovcn ic... 111$iory of Bchu\lontl F1mncc; From si'11ldard
lin1111tt 10 bcha,ioral fin:u,cc- Arc linanc111I nurkcis dlk1cnt?. Lun,ts 10 uibi1nq:c-
Fundarncn1nl Ri,k. No1>t Trader R1>k. hnplrmcntatlon co11. e,idcntt of lun11> 10 orhi1n1gc
Rcrcrcncu:
romcs. \V1IIU1111, ~0c1-g, IOllr\U Fin.,ncc". S1udm1 ed. \V1lcy PubllCDIIOn (chilplcrs
I, 2.3,4 &
SJ
l'nJl II
Coa:nili,r biuses. behrr. 1100 hl!uri•tlcs-P~f=nces Prospect Thtory. Ambil,'llity o,er.. ion.
Lo» .,crs1011, l'ram,ng. l\an,.coru.cqucnll.llu.m. 01,JUncllon Eff«t, Sclf-dccq11km, Neu~
lin.incc (in1roduc1ion Onl)I), Mcn10I Accounung. Sclf-con1rol, Rcgrcl a\01doncc und Cognni,c
d1>:son;,ncc. R,,,rcscnia1,,ct1CS> and A•ailabdny. Anchoring and Belief pcrsc,cnncc.
<hcrconfidcncc. Op1unu.m and wishful 1lunking. O,cm:wion anG Con,crvutuan. Sclf-
anribuuon. Rci,-C11Cy bias
Rcfrno_n«.J:
Focbes. \\'1lhum, ·•BchA,10unil Fin.11,cc··. Studtnt cd, \V1lcy Pubhcauor> (ch:ip1en. 6, 7, 8. 9]
P11e'19ol UI
BEIi.A \10RAL f{XA,' /CE
Unit Ill
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Erulowmt:nt dTdt. Dtsposiuon ...
rd"t'ltnt'te pnc.'e ...m,c,. llerd Oeb8\IOr. h1111h1gbt.
wmllc.'.Q' curse. cognilh c di:.>011anc..._, frumllitri1y bia,,, ,i.11us quo bilb. la\\ or snuU numbcn.
infonnmion O\ttload
RcftnnN>£
Foibes, W11hnm. "8ch.,viouml Finnncc··. Srock• ed, Wile) Publkauon (chapters
10. I I, &
I ?J
(4 Wttks)
Uni! I V
Applicat100-Tbc Aggn,g:11e S1ock !'.wkct. Equity Pn,mium Punlc-pro.'l)ttl 1111:0I'), lo,-s
&\trsion: TM Volnuhty Puzzle-bd~l5. p Rcfttmct'S:: Tbc Cross Src1ion of A\crag,, mums-
siu premium. long term rc\e_l'SillS, prcdictl\c
p,)\\'C:I'
of sca~d price ratio~. momC'fllum, t"\cnl
51ud,cs
Apphca1100-Tht c losed end funds and co tnO\emffll: m,estor bcha\'ior {m 1ng lllld
1D\CS1mcn1)-11,suif,ocm d1vers11icn11on. 113i,c dl\crstficauon. cxcessl\e 1radmg. lht selling
dectsion. iht, buy,ng decision.
Application-Corpomu., Finnntt: Soruril) lssuaMc. Cap1u1l ~trucu.uc nnd ln\estm<-nt.
D1~,dcod,., Managerial lm11>0nal11y.
Rcfuen rn:
Folbo, \\'1llwn. ··Bch:lviourul Fi1111ncc... Srudc• ed. Wile)- Pubhcauon (chapters - 13. 14. &
I SJ
Trx1 Books:
I. Fomcs. Wilham, "Bdrnvioural Financ,,·, S1udn11 rd, \Vilcy Publicat>On
2. Sblcifcr. Andrei " locfficicn1 !'.iukcb-An lruroductlon to Bcl111, ional FUlllllCC.. Ouord
lJnl\=ityP~
Addltlonal Rradln&$:
I. Thaler. Richard & Barberi;. Nicbow. (2002) A Survey of Oml\ iot111 Finance.
h11p:1,d,c,do1,org110.21321ssm,3211180
2 Kahn<,m•n. D,niel & T\'er<ky. """"' (2000) ..C'h<licci:. Value,. nnd Fmmc,;-
Cambndi,-c Unl\ersily Prcss
The b1es1 publtshcd rc,;carch J>Upt'ri "Ill be u>Cd for tcachmg 10 o grcu1cr cxtcnL
P11e10ol
ua
BEHA\ 'lORAL FINASCE
Ttadlin.g Leaming Pro~ts£
Cbss room leautt, Case study dJSCUssion. Numerical Problem solving. Class presfflllluon
on the assigned 1opic by studtnts tndl\ idually or in group. \Vorkshop, Tuiorials. Role play
~111tnl Met hod
I. Internal cwlWllion or25•• tmd.s
a. Anendancc
s•• mwb
b. T\\<I 1111cmnl c,valuatiolb by lhe leathet wnh 10•. l1llltb each OUI of\\bich one must
be a class tesi and otbtr OU) b.:: another 1cs1 or home ass1gnmcn1 or pccscnlal.101L
Faculty may take more tb;in I\\O ass1gnmcn1s and (or) !CSIS bUI total will b.:: only 20-e
marks.
2. End 1crm Umvcrsity wm or1s•~ nwl<J
Kt"> " ords:
Noi:,,c, Trader Ri.k. Cognili\'c b!IISCS. Equil) Premium PuzzJe. DbJUncllon Effect.
Cndo,,,mcn1 cff«I, Sclr-a1111oull0D
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