Behavioral Finance - Faculty of Economics in Osijek

Home

Study programmes

University specialist studies

Finance and Banking

Behavioral Finance

Study

University specialist studies

Semester

ECTS credits

5 ECTS

Head professor

Goran Karanović (FMTU)

Goal

The general goal of the course is for students to acquire fundamental knowledge in a new and dynamic area of finance, which complements traditional financial theoretical postulates by introducing cognitive biases and heuristics in investment decision-making. The specific objectives of the course are to train students to recognise the cognitive and psychological biases that investors exhibit; to understand human behaviours and biases that investors have; and to apply the acquired knowledge in making optimal investment decisions.

Additional info

Course content

Traditional finance vs. Behavioural finance
Efficient markets vs. Irrational markets (fundamental, market, and calendar anomalies)
Rational economic man vs. Behaviourally biased man
Heuristics and prejudices (anchoring, representativeness, conservatism, overconfidence, rule of thumb) rule of thumb, )
Memory errors
Emotions and their influence on investment decisions (fear, stress, doubt, mood, etc.)
Biases in investment decision-making
Belief biases (self-deception, attribution bias, projection bias, success bias, etc.)
Other biases and heuristics

Course associates

There are no listed course associates.

Duration

Lectures: 20

Seminars: /

Exercises: /

Learning outcomes

After successfully completing the course, students are expected to develop the following competencies:

To correctly interpret the theoretical fundamentals of behavioural finance.
To explain the differences between traditional and behavioural finance.
To identify the heuristics that occur when making investment decisions.
To assess how cognitive biases influence the making of financial decisions.
To create an investment strategy taking into account cognitive biases and heuristics.

E learning link

Merlin e-learning system