University of St Andrews

Key information

SCOTCAT credits : 20

ECTS credits : 10

Level : SCQF level 11

Semester: 2

Planned timetable: To be arranged.

Traditionally, Financial Economics assumes that investors and other market participants are perfectly rational. While this is a good first approximation, we currently know there are a number of systematic biases in people's behaviour. The goal of this module is to discuss how these biases affect financial markets and investors' decisions. We will start with describing the most relevant deviations (such as overconfidence, representativeness and others), and we will continue with various financial applications. We will talk about bubbles, herding, and implications for corporate decisions and investors' behaviour.

Learning and teaching methods and delivery

Weekly contact: 20 hours of lectures over 11 weeks, 1-hour laboratories (x 5 weeks)

Scheduled learning hours: 27

Guided independent study hours: 181

Assessment pattern

As used by St Andrews: 2-hour Written Examination = 50%, Coursework (incl Class Test, 25%) = 50%

As defined by QAA
Written examinations : 75%
Practical examinations : 0%
Coursework: 25%

Re-assessment: 2-hour Written Examination = 100%

Personnel

Module coordinator: Dr M C Iannino
Module teaching staff: Maria Chiara Iannino
Module coordinator email mci@st-andrews.ac.uk

Intended learning outcomes

• Recognise the main systematic biases in people's behaviour when facing financial decisions
• Explain some of the deviations from prediction of the traditional financial theories
• Critically analyse the traditional financial theories at the light of the systematic puzzles observed in the markets
• To identify alternative behavioural financial theories that could better explain the observed behaviour of the financial agents
• Apply the behavioural framework to the main areas of financial economics, such as trading and corporate finance
• Analyse the impact of behavioural biases and heuristics to the performance of the financial agents