Behavioral Finance (FIN 406)

2021 Fall
Sabancı Business School
Gizem Öztok Altınsaç,
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FIN301 IE303
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Behavioral finance is a subfield of behavioral economics that studies the effects of psychological, cognitive and cultural factors on the financial decisions of agents. Classical finance theory assumes that agents in financial markets are fully rational, in that they maximize their expected utility with every decision they make. As a result, classical theorists believe that markets are efficient, and prices reflect all information available. However, there have been many studies documenting anomalies in markets that contradict with the efficient markets view and cannot be explained by the existence of fully rational investors. Behavioral finance tries to explain these anomalies and investors biases by combining tools and concepts from psychology and financial economics. This course aims to improve our understanding of the financial decision making by introducing psychologically more realistic frameworks that allow agents to be less than fully rational.


1. Understand the world, their country, their society, as well as themselves and have awareness of ethical problems, social rights, values and responsibility to the self and to others.

2. Understand different disciplines from natural and social sciences to mathematics and art, and develop interdisciplinary approaches in thinking and practice.

3. Think critically, follow innovations and developments in science and technology, demonstrate personal and organizational entrepreneurship and engage in life-long learning in various subjects; have the ability to continue to educate him/herself.

4. Communicate effectively in Turkish and English by oral, written, graphical and technological means.

5. Take individual and team responsibility, function effectively and respectively as an individual and a member or a leader of a team; and have the skills to work effectively in multi-disciplinary teams.

1. Have an understanding of economics and main functional areas of management

2. Have a basic all-around knowledge in humanities, science, mathematics, and literature

3. Have a basic knowledge of law and ethics, awareness of social and ethical responsibilities

4. Work effectively in teams and environments characterized by people of diverse educational, social and cultural backgrounds

5. Demonstrate proficiency in oral and written communications in English

6. Pursue open minded inquiry and appreciate the importance of research as an input into management practice; thus, a.know how to access, interpret and analyze data and information by using current technologies b.use the results from analyses to make informed decisions

7. Use office softwares for written communication, presentation, and data analysis

8. Demonstrate awareness that business settings present different opportunities and challenges for managers due to environmental/contextual differences that arise in economic, political, cultural, legal-regulatory domains