Explore the fascinating world of Behavioral Finance in this Yale University lecture. Delve into the revolutionary field that applies insights from social sciences to finance, challenging traditional economic theories. Discover how psychological patterns like overconfidence impact financial decision-making and learn about Kahneman and Tversky's Prospect Theory, which addresses irrational deviations from classical models. Examine market volatility through a present value analysis, understand the ubiquity of overconfidence in financial markets, and investigate how people make choices according to Prospect Theory. Finally, explore the Regret Theory and how fashion can be used as a measure of market behavior. This comprehensive lecture provides a solid foundation in Behavioral Finance, offering valuable insights for anyone interested in the intersection of psychology and economics in financial decision-making.
Behavioral Finance - The Role of Psychology in Financial Decision-Making
Overview
Syllabus
- Chapter 1. What Is Behavioral Finance?
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- Chapter 2. Market Volatility: Random, or Socially Influenced? A Present Value Analysis
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- Chapter 3. Overconfidence: Its Ubiquity and Impact on Financial Markets
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- Chapter 4. The Kahneman and Tversky Prospect Theory or, How People Make Choices
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- Chapter 5. The Regret Theory and Fashion as a Measure of the Market
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Reviews
4.7 rating, based on 3 Class Central reviews
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Shrimay PatilThe Role of Psychology in Financial Decision-Making was an enlightening experience. It delved into how cognitive biases, emotions, and social factors influence financial choices, challenging traditional economic theories. The course provided a deep understanding of concepts like loss aversion, overconfidence, and herd behavior, blending psychology with practical financial scenarios. It sharpened my analytical skills and offered tools to make more informed decisions. A must for anyone keen on understanding the human element in finance and its impact on markets and investments. -
the course has been a good experience, the idea of not only efficient markets and mathematical finance has changed my understanding of finance. in addition the insights on overconfidence has provided also some extra knowledge on how individual`s expectations and actual outcome create quite a difference.
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It was pretty good and with examples, should have been more dynamic. But bisides that it was pretty good.
