ECON 4470 Economics of Behavioral Finance

Note: This course is on-going. New material will be uploaded as the course progress.

Instructor: Vinci Chow


Handouts Video
Lecture 0: Syllabus
Choice under Risk

Part I

Lecture 1: Static Portfolio Optimization (Solution)
Equity Premium Puzzle and Prospect Theory
Choice under Uncertainty
Prospect Theory
Lecture 2: Reference-Dependence: Example (Solution)
Disposition Effect
Lecture 1 Recap
Loss Aversion Example
Application of Prospect Theory
Disposition Effect Part I
Disposition Effect Part II

Part II

Lecture 3: Multiple Assets: Two-Fund Spanning
Captial Asset Pricing Model (Solution)
CAPM Recap
Lecture 4: CAPM Abnormalities
CAPM Abnormalies Part I
CAPM Abnormalies Part II

Part III

Lecture 5: Time Inconsistency
Time Inconsistency Part I
Beta-Delta Model Example
Lecture 6: Hyperbolic Discounting: Examples
Sophisticate vs Naviete
Time Inconsistency Part II

Part IV

Lecture 7: Ambiguity Aversion
Analyst Recommendation
Ambiguity Aversion
Analyst Recommendation
Lecture 8: Law of Small Numbers

Problem Sets:

Problem Set 1: Questions
Problem Set 2: Questions