We make thousands of decisions every day. Do I cross the road now, or wait for the oncoming truck to pass? Should I eat fries or a salad for lunch? How much should I tip the cab driver? We usually make these decisions with almost no thought, using what psychologists call “heuristics” – rules of thumb that enable us to navigate our lives. Without these mental shortcuts, we would be paralyzed by the multitude of daily choices. But in certain circumstances, these shortcuts lead to predictable errors – predictable, that is, if we know what to watch out for. Did you know, for example, that we are naturally biased towards selling investments that are doing well for us, but holding on to those that are doing poorly? Or that we often select sub-optimal insurance payment plans, and routinely purchase insurance that we don’t even need? And why do so many of us fail to enroll in our employer’s corporate retirement plans, even when the employer offers to match our contributions?
Offered By
Behavioral Finance
Duke UniversityAbout this Course
Skills you will gain
- Decision-Making
- Behavioral Finance
- Cognitive Bias
- Behavioral Economics
Offered by
Duke University
Duke University has about 13,000 undergraduate and graduate students and a world-class faculty helping to expand the frontiers of knowledge. The university has a strong commitment to applying knowledge in service to society, both near its North Carolina campus and around the world.
Syllabus - What you will learn from this course
Week 1
Welcome to the course! In this first week, we'll look at the classical economic model of consumer choice, which assumes that all of the decisions that we make are sensible, or “rational.” Once we have examined the underlying theory of how people should behave (especially around financial decisions), we will move on to examine how people do behave. We will focus in particular on situations in which we are most inclined to make decisions that appear to defy rational choice axioms.
Week 2
Welcome to the second week. In this session, we will discover how our minds are inclined to distort probabilities, and either underestimate or overestimate the likelihood of certain outcomes. We’ll also learn about “heuristic-driven bias”: the tendency to use rules of thumb that simplify the process of making decisions, but can also lead to predictable errors. These biases negatively affect our decision-making far more than we might expect; especially when the outcome of the decision has great significance for us.
Week 3
In the final week of the course, we will see multiple examples of how mental heuristics can lead us to make predictably sub-optimal financial decisions, both individually and across the entire financial markets. We will also discuss the many ways in which you can now improve your financial decision-making because of your deeper understanding of the innate biases that have tripped you up in the past!
Reviews
- 5 stars61.48%
- 4 stars25.64%
- 3 stars8.60%
- 2 stars2.51%
- 1 star1.74%
TOP REVIEWS FROM BEHAVIORAL FINANCE
Great content. Quite short, but it helped me expand my knowledge anyway. I do recommend taking a Financial Markets course before this one so it's more familiar and friendly.
The concepts are explained in detail but sometimes too much in detail without parallel examples to real life that sometimes, all biases seem to be the same. More videos needed.
The course was pretty good, required a lotta pre requisites and most of all the professors were amazing but didn't teach much less scenarios and no answers to the questions asked in assignments
Need someone to respond if we have doubts Include reading materials too for further reference\n\nToo much of overlap between video and text content, Need to differentiate both
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