EC5227 Behavioural Finance

Academic year

2023 to 2024 Semester 2

Further information on which modules are specific to your programme.

Key module information

SCOTCAT credits

20

The Scottish Credit Accumulation and Transfer (SCOTCAT) system allows credits gained in Scotland to be transferred between institutions. The number of credits associated with a module gives an indication of the amount of learning effort required by the learner. European Credit Transfer System (ECTS) credits are half the value of SCOTCAT credits.

SCQF level

SCQF level 11

The Scottish Credit and Qualifications Framework (SCQF) provides an indication of the complexity of award qualifications and associated learning and operates on an ascending numeric scale from Levels 1-12 with SCQF Level 10 equating to a Scottish undergraduate Honours degree.

Planned timetable

To be arranged.

This information is given as indicative. Timetable may change at short notice depending on room availability.

Module coordinator

Dr M C Iannino

This information is given as indicative. Staff involved in a module may change at short notice depending on availability and circumstances.

Module Staff

Maria Chiara Iannino

This information is given as indicative. Staff involved in a module may change at short notice depending on availability and circumstances.

Module description

Traditionally, Financial Economics assumes that investors and other market participants are perfectly rational. While this is a good first approximation, we currently know there are a number of systematic biases in people's behaviour. The goal of this module is to discuss how these biases affect financial markets and investors' decisions. We will start with describing the most relevant deviations (such as overconfidence, representativeness and others), and we will continue with various financial applications. We will talk about bubbles, herding, and implications for corporate decisions and investors' behaviour.

Assessment pattern

2-hour Written Examination = 50%, Coursework (incl Class Test, 25%) = 50%

Re-assessment

2-hour Written Examination = 100%

Learning and teaching methods and delivery

Weekly contact

20 hours of lectures over 11 weeks, 1-hour laboratories (x 5 weeks)

Scheduled learning hours

27

The number of compulsory student:staff contact hours over the period of the module.

Guided independent study hours

181

The number of hours that students are expected to invest in independent study over the period of the module.

Intended learning outcomes

  • Recognize the main systematic biases in people's behaviour when facing financial decisions
  • Explain some of the deviations from prediction of the traditional financial theories
  • Critically analyse the traditional financial theories at the light of the systematic puzzles observed in the markets
  • To identify alternative behavioural financial theories that could better explain the observed behaviour of the financial agents
  • Apply the behavioural framework to the main areas of financial economics, such as trading and corporate finance
  • Analyse the impact of behavioural biases and heuristics to the performance of the financial agents