FINS3655 Behavioural Finance HD FULL NOTES

Description

FINS3655 Behavioural Finance These notes are VERY comprehensive and structured, and use information from the lecture slides, additional readings and group presentations. They cover all topics from Week 1 to Week 10. These include: PART 1: Decision Making 1. Intro into behavioural finance 2. Bias (default, decoy) 4. Decisions Under Uncertainty (EU, EV, Prospect Theory, St Petersburg Paradox) 5. Framing Effects (Asian Disease, Frequency, Choice vs Pricing) 6. Reference Point Adjustments (house money effect) 7. Consequentialist View (sure thing principle, disjunction effect, illusion of control) 8. Neurofinance (PFC, emotional brain, somatic markers) 9. Reward VS Fear System (dopamine, serotonin, testosterone) PART 2: Perception & Learning 1. Paradox of Information (overload and interference) 2. Bayesian VS Reinforcement Learning 3. Neglect of Weight of Evidence (base rate, discriminability) 4. Law of Small Numbers (gambler's fallacy, non random, insufficient samples) 5. Information Acquisition (in-attentional & risk blindness) 6. Neuronal Adaptations (risk after effect bias, normalisation theory, pessimism bias) PART 3: Applying Insights 1. LENON Toolbox 2. Household Finance (automatic enrolments, SMarT, prize linked savings) 3. Investor Behaviour (neuropharmacology, disposition bias, theory of mind) 4. Corporate Finance (zimbardo & milgram experiment)