PředmětyPředměty(verze: 901)
Předmět, akademický rok 2021/2022
  
Behavioral Economics and Finance - JEB147
Anglický název: Behavioral Economics and Finance
Český název: Behavioral Economics and Finance
Zajišťuje: Institut ekonomických studií (23-IES)
Fakulta: Fakulta sociálních věd
Platnost: od 2021
Semestr: zimní
E-Kredity: 5
Způsob provedení zkoušky: zimní s.:písemná
Rozsah, examinace: zimní s.:2/0 Zk [hodiny/týden]
Počet míst: 59 / neurčen (59)
Minimální obsazenost: 59
Virtuální mobilita / počet míst: ne
Stav předmětu: vyučován
Jazyk výuky: angličtina
Způsob výuky: prezenční
Poznámka: předmět je možno zapsat mimo plán
povolen pro zápis po webu
při zápisu přednost, je-li ve stud. plánu
Garant: doc. PhDr. Julie Chytilová, Ph.D.
Vyučující: doc. PhDr. Michal Bauer, Ph.D.
doc. PhDr. Julie Chytilová, Ph.D.
PhDr. Mgr. Jiří Kukačka, Ph.D.
Mgr. Lenka Šlegerová
Třída: Courses for incoming students
Prerekvizity : JEB104
Anotace -
Poslední úprava: PhDr. Mgr. Jiří Kukačka, Ph.D. (17.11.2021)
This course introduces the key concepts in behavioral economics and finance, a modern and quickly emerging field that integrates insights from psychology into economics.

In first part of the course (seven lectures), Michal Bauer and Julie Chytilová will focus on the following topics: social preferences and fairness, time discounting and limited self-control, discrimination and group identity and inattention.

In the second part of the course (four lectures), Jiří Kukačka wil focus on behavioral finance, specifically on investors' psychology and its aggregate effects on financial markets, and agent-based computational finance.

After introducing the concepts, the classes will be largely based on discussion of individual papers.

The plan for the fall 2021 is to start teaching in person, respecting the current hygiene and epidemiological rules. The students will be expected to participate at the lectures in person. In case you cannot attend a lecture in person due to Covid-related reasons (you are sick with covid-19 or recovering from it, are in quarantine, are abroad and not being able to travel easily to Prague), please do inform the lecturer as soon as possible and provide a proof of this situation. The lecturer to be contacted during the first weeks in the semester is Michal Bauer, later on Julie Chytilová, and at the end of the semester Jiří Kukačka (you will get more detailed information during the lectures). In the situations described above, you can connect to the lectures online via simultaneous online broadcasting. Please bear in mind that during the online broadcasting it might be difficult for the lecturers to interact with students connected online. Instead of that, there will be a separate short Q&A online slot immediately after the lecture or during the office hours.

The hyperlink to online broadcasting: https://cesnet.zoom.us/j/94074724129
Podmínky zakončení předmětu -
Poslední úprava: SCHNELLEROVA (20.11.2019)

A grade from this course will be based on a written final test, which will take place at the end of the course.

Grading: A = 90.1-100; B = 80.1-90; C = 70.1-80; D = 60.1-70; E = 50.1-60; F = 0-50.

Literatura -
Poslední úprava: doc. PhDr. Julie Chytilová, Ph.D. (04.11.2019)

Please see the list of the readings in the syllabus

Požadavky ke zkoušce -
Poslední úprava: doc. PhDr. Julie Chytilová, Ph.D. (14.09.2021)

A grade from this course will be based on a written final test, which will take place at the end of the course.

Grading: A = 90.1-100; B = 80.1-90; C = 70.1-80; D = 60.1-70; E = 50.1-60; F = 0-50.

 

There will be four dates for the final exam. Most likely, the exams will take place online via Moodle.

•       December 17, 2021, 9:30-10:50am

•       January 14, 2022, 9:30-10:50am

•       January 21, 2022, 9:30-10:50am

•       February 4, 2022, 9:30-10:50am

Sylabus - angličtina
Poslední úprava: doc. PhDr. Julie Chytilová, Ph.D. (01.09.2021)

 

For the list of readings for each topic please see the attached pdf document with the syllabus

 

TOPIC 1: INTRODUCTION (Michal Bauer)

Main questions

•         What is the definition of behavioral economics?

•         How does behavioral economics differ from experimental economics?

•         Overview of topics and requirements of this course

 

TOPIC 2: Social preferences (Michal Bauer)

Main questions

•         Models of social preferences: altruism, inequality aversion, reciprocity, concern about social efficiency

•         Evidence of trust and reciprocity in the laboratory

•         Applications

•         How can social preferences help to explain unemployment?

•         Reciprocity on the labor market: Can employers motivate employees to exert more effort by giving them higher wages? Do wage cuts reduce effort?

•         Reciprocity in charitable giving: Can NGOs mobilize donations by distributing gifts?

•         Reciprocity in day care centers: Can introducing “market” crowd out fairness motives?

•         Formation of social preferences

  •          Are social preferences exogenous or shaped during childhood?
  •          How do social preferences develop with age during childhood and adolescence?
  •          Does parental background and social environment matter? 

 

TOPIC 3: Time discounting and limited self-control (Michal Bauer)

Main questions

•         Present-biased preferences and naivite: introducing the concepts

•         Are people present-biased?

•         Demand for commitment

•         Do people procrastinate? Can deadlines help?

•         Do people demand commitment when they want to save or stop smoking?

•         Psychology of poverty

•         Does poverty increases impatience?

•         Does poverty impair cognitive function and increases stress?

•         How does stress and lower cognitive function affect decision-making?

 

TOPIC 4: Decision-making in groups and group identity (Julie Chytilová)

Main questions

•         Are there differences in decision-making of individuals and of groups? Are groups more rational and selfish?

•         What is the role of group deliberation vs. the effect of being a member of a group?

•         How can group identity influence economic outcomes?

•         How can we measure the effects of group identity/membership on behavior?

•         Priming: making identity salient by asking questions

•         Minimal group experiments: dividing subjects to artificial groups

•         Experiments with real life groups

 

Topic 5: Discrimination (Julie Chytilová)

Main questions

•         How can we rigorously measure existence of discrimination against people with a certain group attribute (ethnicity, gender, etc.)?

•         What are the standard economic explanations of discrimination?

•         Preference based discrimination and statistical discrimination

•         Can they explain the existing patterns from experiments on discrimination?

•         Why can costly attention magnify discrimination? What can be done about that?

•         Are stereotypes about other groups accurate? Can discrimination arise due to inaccurate stereotypes?

•         Sub-conscious sources of discrimination

•         Implicit Association Test and Implicit discrimination

•         Stereotype threat: Can salience of stereotype trigger behavior that confirms the stereotype?

 

TOPIC 6: INTRODUCTION TO BEHAVIORAL FINANCE (Jiří Kukačka)

Main questions

•   History and the current state of the art of behavioral finance research

•   What are some unrealistic assumptions of traditional financial models?

•   Efficient Market Hypothesis, Rational Expectation Hypothesis, representative agent

•   the CAPM model, the NPV model, the Four Factor model

•   The role of bounded rationality in economic theory

•   What are the limits to professional arbitrage?

•   What are the most important empirical stylized facts of financial data?

•   absence of autocorrelation in returns, gain/loss asymmetry, heavy tails, volatility clustering

•   What are the main distinctions between the “traditional” finance paradigm and the “behavioral” finance approach?

 

TOPIC 7: INVESTORS’ PSYCHOLOGY I: HEURISTICS AND COGNITIVE BIASES (Jiří Kukačka)

Main questions

•   What is the role of human beliefs and cognitive biases in financial markets?

•   overconfidence, optimism, survivorship bias, endowment effect, loss aversion

•   What are the typical heuristics people tend to follow? How can these influence financial decisions of investors?

•   availability, representativeness, 1/N, framing, anchoring

•   Can we indirectly influence the behavior and decision making of individuals or groups? Can we improve people's decisions about safety, health, or happiness? How can we induce people to save enough?

 

TOPIC 8: INVESTORS’ PSYCHOLOGY II: PROSPECT THEORY AND MENTAL ACCOUNTING, SOCIAL INFLUENCES IN FINANCIAL MARKETS (Jiří Kukačka)

Main questions

•   What are alternative approaches to preference formation?

•   Prospect Theory (vs. EU Theory), mental accounting, ambiguity aversion

•   What are the most important social influences on financial markets?

•   “beauty contest”, herding, market sentiment, asset market bubbles and crashes

 

TOPIC 9: STOCK MARKET ANOMALIES, AGENT-BASED COMPUTATIONAL FINANCE (Jiří Kukačka)

Main questions

•   What are the most known stock market anomalies and can we explain them? Can we profit from their knowledge?

•   equity premium puzzle, volatility puzzle, over- and under-reaction, calendar effects, momentum trading

•   How can we model the elementary trading strategies represented in financial markets?

•   fundamentalists and chartists

•   Can prices evolve endogenously based only on interactions of market participants?

•   Heterogeneous Expectations Hypothesis

•   Are there alternative models capable of replicating empirical stylized facts of financial data?

Catastrophe model, heterogeneous agents modeling

 

Vstupní požadavky -
Poslední úprava: doc. PhDr. Julie Chytilová, Ph.D. (04.11.2019)

Pre-requisite

JEB104 – Microeconomics I

 
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