Behavioral Finance

CANCELLED: Tarun Chordia, April 20 - April 23, 2020, (Emory University)

Behavioral finance is often presented as a challenge to rational decision making and market efficiency. Borrowing from the literature on market efficiency, we can group departures from rational behavior into three familiar categories (weak, semi-strong, and strong). In the weak-form, psychological biases affect investing behavior and can influence welfare but have no lasting impact on asset prices. In the semi-strong form, behavioral biases also have an effect on corporate managers but any suboptimal behavior is recognized by the market and incorporated into security prices. Finally, in the strong form behavioral biases are so pervasive that they can lead asset prices to depart nontrivially from fundamental values.

This course is designed to provide students with exposure to behavioral finance. We’ll begin with an overview of behavioral biases documented in the cognitive psychology literature and then discuss their implications for finance.

Readings
Many of the books on behavioral finance are collections of journal articles. We’ll focus on the articles themselves with references to some of the helpful literature surveys. Two books you might want to check out are Thinking Fast and Slow by Daniel Kahneman and The Myth of the Rational

Course credit

4 ECTS

Read the Syllabus for more information.

Schedule 2020 CANCELLED

Classes will be held at the premises of SHoF, Drottninggatan 98, 111 60 Stockholm on the following days:

April 20, 13:00 – 17:15, Cancelled
April 21, 14:00 – 17:15, Cancelled
April 22, 14:00 – 17:15, Cancelled
April 23, 14:00 – 17:15, Cancelled

Course location: Room “Fama”

Syllabus

Travel Stipends

SHoF offers travel stipends to PhD students from Swedish universities. To apply, please send a brief motivation letter/mail by the supervisor and a budget to jenny.wahlberg.andersson@hhs.se.
The Nordic Finance Network (NFN) offers travel stipends to PhD students from other Nordic countries who come from one of the NFN member institutions.
Information on how to apply for NFN travel stipends is on http://nfn.aalto.fi/courses.htm

Course director: Professor Tarun Chordia, Emory University

Tarun Chordia joined the Goizueta Business School in the fall of 2000. Tarun's research is grounded in both theory and empirical methods and spans a diverse area of financial economics. His teaching interests include securities and portfolios, financial institutions and fixed income markets. Prior to his doctoral studies, he worked for Citibank as a relationship and credit manager in the Financial Institutions Group.