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Behavioral Finance
  • Level Foundation
  • Duration 5 hours
  • Course by Duke University
  • Offered by

About

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.

Modules

Introduction

    • 1 Videos
    • 1 Readings
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1 Videos

  • Welcome to Behavioral Finance

1 Readings

  • Course Overview

Utility of Money

    • 2 Videos
    • 1 Readings
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2 Videos

  • Introduction to Classical Economics
  • Utility of Money

1 Readings

  • Utility of Money

Omission Bias

    • 2 Videos
    • 2 Readings
    • 1 Assignment
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1 Assignment

  • Week 1 Quiz

2 Videos

  • Omission Bias Case Study
  • Expected Utility vs Prospect Theory

2 Readings

  • Omission Bias
  • Answer Choice Explanations and Correct Answers for Week 1 Quiz

Correlation Causation

    • 1 Videos
    • 1 Readings
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1 Videos

  • Correlation and Causation Error

1 Readings

  • Problems with Probability

Probability Weighting

    • 2 Videos
    • 1 Readings
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2 Videos

  • Probability Weighting
  • Relative Probabilities

1 Readings

  • Probability Weighting

The Availability Heuristic

    • 1 Videos
    • 1 Readings
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1 Videos

  • The Availability Heuristic

1 Readings

  • The Availability Heuristic

Framing

    • 2 Videos
    • 1 Readings
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2 Videos

  • Mental Accounting and Expenditures
  • Loss Aversion

1 Readings

  • Framing

Representiveness

    • 1 Readings
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1 Readings

  • Representativeness

Overconfidence

    • 2 Videos
    • 1 Readings
    • 1 Assignment
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1 Assignment

  • Week 2 Quiz

2 Videos

  • Belief Perseverance and Confirmation Bias
  • Case Study: Belief Perseverance

1 Readings

  • Overconfidence

Benefits of Saving Early

    • 2 Videos
    • 1 Readings
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2 Videos

  • Introduction to Financial Decision Making
  • Benefits of Saving Early

1 Readings

  • Money Management

Market Bubbles and Crashes

    • 1 Readings
    • 1 Assignment
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1 Assignment

  • Week 3 Quiz

1 Readings

  • Market Bubbles & Crashes

Auto Summary

Explore the fascinating world of Behavioral Finance with this foundational course in Business & Management, led by Coursera. Understand how psychological biases influence financial decisions and learn strategies to avoid common errors. Perfect for anyone looking to enhance their financial planning, the course spans 300 minutes and offers flexible subscription options: Starter and Professional. Improve your financial decision-making skills today!

Emma Rasiel
Instructors

Emma Rasiel

John Forlines III
Instructors

John Forlines III