BSAD 309 - Finance and the Brain

While much of financial theory is built on the premise that investors and managers are strictly rational, empirical research has shown this paradigm to be insufficient to describe various features of actual financial decision-making. This indicates that asset prices may not be completely driven by economic fundamentals and that investors’ “animal spirits” constitute an important source of price fluctuations. The prevalence and the devastating impact of ‘market psychology’ in the overall economy, has led researchers to incorporate brain science to explain how our primal circuits can, and often do, override our reason when it comes to financial decision-making. This course answers two questions: What are the depp “irrational” forces driving investor behavior, and what can be done to better manage them.

Pre-req: BSAD 130
Cross-listed with INTD 309
4 credits