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Durham University

Postgraduate Module Handbook 2021/2022

Archive Module Description

This page is for the academic year 2021-22. The current handbook year is 2022-23

Department: Economics and Finance

ECON42515: BEHAVIOURAL FINANCE AND ECONOMICS

Type Tied Level 4 Credits 15 Availability Available in 2021/22
Tied to L1T109 Economics
Tied to L1T209 Public Economics
Tied to L1T309 Experimental Economics
Tied to L1T409 Environmental & Natural Resource Economics
Tied to N3K109 Finance
Tied to N3K209 Finance (Accounting and Finance)
Tied to N3K309 Finance (Corporate and International Finance) (Last intake of students October 2021)
Tied to N3K409 Finance (Finance and Investment)
Tied to N3K509 Finance (International Money, Finance and Investment) (Last intake of students October 2021)
Tied to N3K609 Finance (International Banking and Finance) (Last intake of students October 2021)
Tied to N3K709 Finance (Economics and Finance)

Prerequisites

  • None

Corequisites

  • None

Excluded Combination of Modules

  • None

Aims

  • to develop students' ability to master the knowledge and understanding at an advanced level of key issues in Behavioural Finance and Economics;
  • to provide students with the opportunity to develop the ability to critically understand current theoretical and empirical research in the field of Behavioural Finance and Economics;
  • to provide students with the ability to critically review a wide range of behavioural phenomena that influence investment decisions, and the consequences of those phenomena for the financial marketplace, with a view to undertaking a dissertation in fields of Behavioural Finance and Economics; and potentially future research work in this area.

Content

  • As Behavioural Finance and Economics is a new and constantly changing discipline, this module will cover a set of core topics and additional topics that depend on the current nature of the discipline and the interests of the students each time:
  • Core Topics:
  • the Efficient market hypothesis;
  • anomalies in financial markets;
  • limits to arbitrage;
  • prospect theory and frame dependence;
  • cognitive heuristics and biases.
  • Additional Topics:
  • mental accounting;
  • choice bracketing;
  • myopia and self-control;
  • overconfidence;
  • constructive choice;
  • Bubbles: rational and irrational exuberance;
  • money illusion;
  • regression-to-the-mean and mean-reversion.

Learning Outcomes

Subject-specific Knowledge:
  • have an advanced knowledge and critical understanding of Behavioural Finance and Economics and be able to take critical approach to the efficient markets hypothesis, and to economic claims in general;
  • have an understanding of how research into Behavioural Finance and Economics is conducted, and what the criteria are for evaluating both behavioural and market-based evidence.
Subject-specific Skills:
  • be able to assess the implications of Behavioural Finance and Economics for financial theory and practice and for their own investment behaviour and that of their clients.
Key Skills:
  • Written Communication;
  • Planning, Organising and Time Management;
  • Problem Solving and Analysis;
  • Using Initiative;
  • Numeracy;
  • Computer Literacy.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

  • A combination of lectures, seminars and guided reading will contribute to achieving the aims and learning outcomes of this module. Classroom activities will be used to illustrate how research in Behavioural Finance and Economics is conducted and how results are interpreted.
  • The summative assessment is an individual assignment of 2,500 words designed to test students' knowledge and critical understanding of the material covered in the module, their analytical and problem-solving skills.

Teaching Methods and Learning Hours

Activity Number Frequency Duration Total/Hours
Lectures 10 1 per week 2 hours 20
Seminars 4 1 per fortnight 1 hour 4
Preparation & Reading 126
Total 150

Summative Assessment

Component: Individual Assignment Component Weighting: 100%
Element Length / duration Element Weighting Resit Opportunity
Individual Assignment 2500 words (max) 100% same

Formative Assessment:

Work prepared by students for seminars; answers to questions either discussed during a seminar, or posted on DUO; feedback on discussions with teaching staff during consultation hours, or via e-mail.


Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University