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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.
Globe

Curso 100 % en línea

Comienza de inmediato y aprende a tu propio ritmo.
Clock

Aprox. 8 horas para completar

Sugerido: 5 hours/week
Comment Dots

English

Subtítulos: English, Portuguese (Brazilian)

Habilidades que obtendrás

Decision-MakingFinanceEconomicsPsychology
Globe

Curso 100 % en línea

Comienza de inmediato y aprende a tu propio ritmo.
Clock

Aprox. 8 horas para completar

Sugerido: 5 hours/week
Comment Dots

English

Subtítulos: English, Portuguese (Brazilian)

Syllabus - What you will learn from this course

1

Section
Clock
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. ...
Reading
5 videos (Total 23 min), 4 readings, 1 quiz
Video5 videos
Introduction to Classical Economics1m
Utility of Money6m
Omission Bias Case Study2m
Expected Utility vs Prospect Theory9m
Reading4 readings
Course Overview10m
Utility of Money10m
Omission Bias10m
Answer Choice Explanations and Correct Answers for Week 1 Quiz10m
Quiz1 practice exercises
Week 1 Quiz24m

2

Section
Clock
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. ...
Reading
8 videos (Total 63 min), 6 readings, 1 quiz
Video8 videos
Probability Weighting4m
Relative Probabilities1m
The Availability Heuristic10m
Mental Accounting and Expenditures7m
Loss Aversion8m
Belief Perseverance and Confirmation Bias9m
Case Study: Belief Perseverance4m
Reading6 readings
Problems with Probability10m
Probability Weighting10m
The Availability Heuristic10m
Framing10m
Representativeness10m
Overconfidence10m
Quiz1 practice exercises
Week 2 Quiz28m

3

Section
Clock
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!...
Reading
2 videos (Total 8 min), 2 readings, 1 quiz
Video2 videos
Benefits of Saving Early6m
Reading2 readings
Money Management10m
Market Bubbles & Crashes10m
Quiz1 practice exercises
Week 3 Quiz26m
4.4
Direction Signs

33%

started a new career after completing these courses
Briefcase

83%

got a tangible career benefit from this course

Top Reviews

By ARMay 8th 2017

"Rationality is an assumption in economics, not a demonstrated fact" I loved this course and all the content. It was kind of hard to understand since i don't have the basic knowledge about economics.

By AMAug 16th 2017

Great course! It allows to understand the twisted logic that run in our heads. Helps to establish the balance between probabilistic truth and illusions that infect our decision-making. Thanks a lot!

Instructor

Avatar

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

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