Course overview
This course will introduce students to behavioural theories of finance and financial decision-making and compare and contrast rational and behavioural theories of finance and financial decision-making. This course will extend students' knowledge of finance by demonstrating how 'real' investors and markets do not always correspond to the "rational agents" and outcomes described in standard finance courses. Behavioural finance and the psychology of finance; behavioural foundations; biases; heuristics; framing effects; interaction of behavioural biases and corporate investment and other corporate finance and investment decisions; implications for market efficiency and decision-making; overcoming biases in corporate finance and investment decisions; case studies.
Course learning outcomes
- Review the behavioural biases, heuristics and framing effects that present obstacles to maximising the value derived from corporate financial and investment decisions.
- Assess how both individual financial decision-making and behaviour affect investment outcomes in financial markets.
- Examine the relevant issues that arise in comparisons between efficient ('economically rational') markets and less understood but more realistic behavioural ('partially rational' or 'irrational') markets.
- Demonstrate how educated investors and corporate decision makers can overcome these behavioural biases, heuristics and framing effects to improve their corporate financial and investment decisions.
- Demonstrate UniSA Business Enterprise Skills in the context of the Finance discipline: i) Problem Solving (intermediate and advanced levels); ii) Written Communication (intermediate and advanced levels); iii) Oral Communication (foundation and intermediate levels); and iv) International Perspective (intermediate level).