Be­ha­vi­our­al Fin­ance

-Apply psychological concepts to financial markets, financial decision-making and new problems inside and outside of the finance industry. -Identifying biases in financial and economic decision-making and where they come from. -Study behavioral finance tools that can help people make better financial decisions. The course will provide students with an understanding of how human psychology leads to biases and mistakes when making financial decisions. By being more aware of these biases, students will be better able to mitigate them as finance industry professionals, managers in non-financial firms, and investors of their own money. The course will also provide students with tools to understand how people process information and (under/over-) react to it during regular and crisis times, as well as the consequences for financial markets and individuals. For example, the course will provide students with the necessary tools to understand many important current relevant issues such ESG investing, investment and savings decisions during crisis and turbulent times, and many others. The course provides the tools to understand: i) why people care about ESG and green investment options, ii) possible ethical dilemmas and trade-offs people have to make when investing this way, iii) why that is relevant for society, iv) how people make mistakes when making ESG investment decisions, and v) how we can help them. Additionally, many of the concepts and theories we review in the course can be used to understand people's perception of societal challenges (e.g., green transition), how they might want to make a difference by investing in ways that reflect their values and how we can help people achieve their financial goals in a sound way conditional on their values. We will also study the "social dimension" of investing, for instance, how social media affects financial and economic choices (see for example, GameStop and meme-stock investing).