There are no pre-requisites for this module to be added

This module is a combination of material from the field of psychology and the application to financial markets. The aim is to be aware of these unconscious biases to debias. We cover the prospect theory according to which we disproportionately hate losing more than winning. Framing is another example according to which the framing of a question influences our decisions. Based on psychology, the module explains several patterns in financial markets such as the home bias, disposition effect, momentum effect, equity premium puzzle, and financial bubbles. This module explores to the extent of which financial managers take advantage of investor irrationality and whether sentiment and overconfidence influence investor and managerial decisions.

LO1: Critically analyse the significance of the most commonly observed forms of decision-making bias;
LO2: Critically analyse situations where managerial and investor decisions have been influenced through bias and heuristics;
LO3: Recommend corrections to standard finance models to account for usage by agents subject to bias.