Behavioral Finance

Duke University

Acerca de este Curso

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? Behavioral finance is the study of these and dozens of other financial decision-making errors that can be avoided, if we are familiar with the biases that cause them. In this course, we examine these predictable errors, and discover where we are most susceptible to them. This course is intended to guide participants towards better financial choices. Learn how to improve your spending, saving, and investing decisions for the future.

Curso 100 % en línea

Comienza de inmediato y aprende a tu propio ritmo.

Aprox. 8 horas para completar

Sugerido: 5 hours/week

English

Subtítulos: English, Portuguese (Brazilian)

Habilidades que obtendrás

Decision-MakingFinanceEconomicsPsychology

Curso 100 % en línea

Comienza de inmediato y aprende a tu propio ritmo.

Aprox. 8 horas para completar

Sugerido: 5 hours/week

English

Subtítulos: English, Portuguese (Brazilian)

Syllabus - What you will learn from this course

1

Section

1 hour to complete

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. ...

5 videos (Total 23 min), 4 readings, 1 quiz

5 videos

Welcome to Behavioral Finance3m

Introduction to Classical Economics1m

Utility of Money6m

Omission Bias Case Study2m

Expected Utility vs Prospect Theory9m

4 readings

Course Overview10m

Utility of Money10m

Omission Bias10m

Answer Choice Explanations and Correct Answers for Week 1 Quiz10m

1 practice exercises

Week 1 Quiz24m

2

Section

3 hours to complete

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. ...

8 videos (Total 63 min), 6 readings, 1 quiz

8 videos

Correlation and Causation Error16m

Probability Weighting4m

Relative Probabilities1m

The Availability Heuristic10m

Mental Accounting and Expenditures7m

Loss Aversion8m

Belief Perseverance and Confirmation Bias9m

Case Study: Belief Perseverance4m

6 readings

Problems with Probability10m

Probability Weighting10m

The Availability Heuristic10m

Framing10m

Representativeness10m

Overconfidence10m

1 practice exercises

Week 2 Quiz28m

3

Section

1 hour to complete

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!...

2 videos (Total 8 min), 2 readings, 1 quiz

2 videos

Introduction to Financial Decision Making0m

Benefits of Saving Early6m

2 readings

Money Management10m

Market Bubbles & Crashes10m

1 practice exercises

Week 3 Quiz26m

Instructor

Emma Rasiel

Associate Chair and Professor

About 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....

Frequently Asked Questions

When will I have access to the lectures and assignments?
Once you enroll for a Certificate, you’ll have access to all videos, quizzes, and programming assignments (if applicable). Peer review assignments can only be submitted and reviewed once your session has begun. If you choose to explore the course without purchasing, you may not be able to access certain assignments.
What will I get if I pay for this course?
If you pay for this course, you will have access to all of the features and content you need to earn a Course Certificate. If you complete the course successfully, your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile. Note that the Course Certificate does not represent official academic credit from the partner institution offering the course.
What is the refund policy?
Is financial aid available?
Yes! Coursera provides financial aid to learners who would like to complete a course but cannot afford the course fee. To apply for aid, select "Learn more and apply" in the Financial Aid section below the "Enroll" button. You'll be prompted to complete a simple application; no other paperwork is required.
Will I receive a transcript from Duke University for completing this course?
No. Completion of a Coursera course does not earn you academic credit from Duke; therefore, Duke is not able to provide you with a university transcript. However, your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile.

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Behavioral Finance