Course Detail (Course Description By Faculty)

Over the past four decades, Behavioral Finance has evolved significantly and is now an essential component of the modern finance toolkit—relevant across asset management, investment banking, corporate finance, and finance-related policy work.

While traditional financial theory assumes that market participants are fully rational, behavioral finance offers an alternative framework, grounded in empirical evidence, that explains many market phenomena as the result of systematic psychological biases and constraints on arbitrage.
This course begins with the foundational concepts of behavioral finance: limits to arbitrage and insights from psychology. We then apply these principles to a range of topics, including individual investor behavior, asset pricing, corporate decision-making, and public policy.

Business 35000 and Business 41100. This is a quantitative course and students are expected to be comfortable applying statistics and multivariate regression to data and interpreting the results. Knowledge of a regression package (such as Excel) is essential.

Prerequisite requirements (35000 and 41100) are not strict, so you do not need to request a waiver. If you feel confident taking the course without the prerequisites you are welcome to, but you are responsible for learning any material you might need to make up on your own.

This course can be taken before or after 35215 (Behavioral and Institutional Finance).

As long as you have completed all the coursework, provisional grades are given.

Required readings: Lecture notes (will be provided).

One final exam, group project, and class participation. No auditors.

Grades

Restrictions