IKT 466 - Behavioral Finance

The objective of this course is to familiarize students with the fundamental principles and theories of behavioral finance, facilitating their understanding of why individuals frequently make irrational financial decisions.

In this course, we will examine the difference between traditional financial theories and the complexity of the real financial world. Throughout the course, we will discuss various heuristics and biases such as framing effect, ambiguity aversion, diversification heuristic, familiarity, and herding behavior. Using real-life examples, we will explore how psychological factors influence investment decisions, asset pricing, and market dynamics.

• Ackert & Deaves (2010). Behavioral Finance: Psychology, Decision-making, and Markets. Cengage Learning.
• Thaler & Sunstein (2008). Nudge. London: Penguin Books.

• Shleifer (2000). Inefficient Markets. Oxford University Press.
• Kahneman (2013). Thinking, Fast and Slow. 1st Ed. NY: Farrar, Straus, and Giroux.
• Thaler (2016). Misbehaving: The Making of Behavioral Economics. W. W. Norton & Company.

Attendance is considered an essential aspect of this course. The material covered in lectures will be a subject of evaluation, and while some topics are available in the textbook, others are exclusive to the lectures. Hence, students are strongly recommended to attend all class meetings regularly and on time. Your punctuality is not only expected but also appreciated.

​This course has a zero-tolerance policy for cheating and plagiarism. Students found engaging in such behavior will face severe consequences, including course failure and disciplinary actions. Cheating involves deceit, fraud, or dishonesty, especially during examinations, while plagiarism is the misrepresentation of someone else’s work as your own.