Behavioral Finance 2600-MFBRdz2rkdiFB
A multi-faceted approach to behavior in the world of finance - beyond the problem of rationality; traditional vs. behavioral view of the financial world; financial psychology as a synthesis of traditional and behavioral approaches; the world of finance from the perspective of discursive psychology (rhetoric of financiers and financial literature); market behavior during the Covid-19 pandemic.
Selected psychological aspects of financial decisions and behaviors: heuristics and cognitive effects; prospect theory and its critique; rumor and panic vs. the functioning of financial institution participants; psychosocial mechanisms of speculative bubbles.
Behavioral finance models: basic models; models based on analysis types; models relating to investor situations and behaviors; herd behavior models; other selected mainstream behavioral finance models; outline of a comprehensive model using a historical perspective.
Event study as a method for testing behavior in behavioral finance;
Modeling the Polish financial market.
Type of course
Mode
Learning outcomes
Knowledge: Student knows and understands:
* S5_W01: In-depth terminology regarding capital markets and investment advisory, with a special focus on behavioral finance concepts.
* S5_W02: In-depth rules, procedures, and practices of capital market functioning, especially the impact of psychological and social factors on investment decisions.
* S5_W03: In-depth economic theories and models relating to the capital market, including classical and behavioral finance models and their application to analyzing real market phenomena.
Skills: Student is able to:
* S5_U01: Use behavioral finance theory and supporting sciences (economics, psychology, finance) to recognize, diagnose, and solve problems related to the behavior of capital market participants.
* S5_U02: Correctly interpret complex economic and social phenomena affecting the capital market, particularly irrational investor behavior observed in crisis situations (e.g., Covid-19, speculative bubbles).
* S5_U03: Prepare analyses and reports (individually and in teams) regarding investor behavior and its impact on the capital market using methods such as event study, and present them communicatively.
* S5_U05: Plan, organize, and manage teamwork in the execution of analyses regarding market behavior and investment decisions.
* S5_U06: Independently expand knowledge in behavioral finance and track current research and market phenomena.
Social Competencies: Student is ready to:
* S5_K01: Critically evaluate phenomena occurring on the capital market, especially in the context of irrational investment decisions and the impact of psychological factors on market functioning.
* S5_K02: Observe and develop ethical standards in investment activities, considering the impact of information manipulation, market narratives, and herd behavior on the financial decisions of market participants.
Assessment criteria
Test (single and multiple choice), open-ended questions.
A total of 100% points can be earned, which determines the final grade:
* 0-50%: 2.0 (Fail)
* 51-60%: 3.0
* 61-70%: 3.5
* 71-80%: 4.0
* 81-90%: 4.5
* 91-100%: 5.0
One absence is allowed.
Bibliography
P. Chodnicka-Jaworska, P. Jaworski, Wrażliwość rynku akcji na publikacje danych rynkowych w czasie pandemii COVID-19, Wydawnictwo Naukowe Wydziału Zarządzania UW, 2020;
P. Chodnicka-Jaworska, Credit rating na rynku finansowym, PWE, 2019;
K. Cuthbertson, D. Nitzsche, Quantitative Financial Economics: Stocks, Bonds and Foreign Exchange, 2nd Edition, Wiley, 2004.
A. Szyszka, Finanse behawioralne: Nowe podejście do inwestowania na rynku kapitałowym, Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu, Poznań 2009;
P. Zielonka, Behawioralne aspekty inwestowania na rynku papierów wartościowych, CeDeWu, Warszawa 2008;
M. Czerwonka, B. Gorlewski, Finanse behawioralne. Zachowania inwestorów i rynku, Wydawnictwo SGH, Warszawa 2008.