| Teaching Staff
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| Language of Instruction |
Türkçe (Turkish) |
| Type Of Course |
Elective |
| Prerequisites |
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| Recommended Optional Programme Component |
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| Course Objectives |
The aim of this course is to examine the basic assumptions of traditional finance theories and to evaluate the criticisms and new approaches brought by behavioral finance to these assumptions.
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| Course Content |
Behavioral Finance is the study of the irrational behavior of investors in financial decision-making. At the intersection of psychology and finance, this course evaluates the role of human behavior and cognitive biases in the functioning of markets and the formation of asset prices. Students learn the impact of investor psychology on financial markets, behavioral misconceptions, risk perception, overconfidence, herd behavior, and compare and analyze these concepts with traditional finance theories. The course offers new perspectives on financial anomalies and market efficiency.
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| Learning Outcomes (LO) |
The students who attended the course and were successful at the end of semester will acquire the followings;
1-Comprehend the assumptions of traditional finance theories and evaluate the deviations from these assumptions in practice,
2-Recognize the basic concepts and approaches in behavioral finance,
3-Evaluate the effects of psychology on financial attitudes and decisions,
4-Evaluate the differences between traditional finance and behavioral finance,
5-Increase analytical thinking skills in financial investment decisions. |
| Mode of Delivery |
Face to face |
| Course Outline |
| Week |
Topics |
| 1. Week |
Traditional Finance Theories: Efficient Markets Hypothesis, Arbitrage Pricing Model, Financial Asset Pricing Model
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| 2. Week |
Traditional Finance Theories: Modern Portfolio Theory |
| 3. Week |
Traditional Theories of Finance: The Expected Utility Theory |
| 4. Week |
Development of Behavioral Finance Approach |
| 5. Week |
Basic Elements of Behavioral Finance Approach |
| 6. Week |
Behavioral Finance Models: • Representative Investor Model, Daniel, Hirshleifer and the Subramayan Model Hong and Stein Model |
| 7. Week |
Prospect Theory |
| 8. Week |
Anomalies in Financial Markets |
| 9. Week |
Psychological and Cognitive Biases in Financial Decisions - I |
| 10. Week |
Psychological and Cognitive Biases in Financial Decisions - II
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| 11. Week |
Limited Arbitrage |
| 12. Week |
Mental Accounting |
| 13. Week |
Herd Behavior and Price Bubbles |
| 14. Week |
Investor Psychology and Sensitivity |
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| Assessment |
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Percentage(%) |
| Mid-term (%) |
40 |
| Quizes (%) |
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| Homeworks/Term papers (%) |
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| Practice (%) |
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| Labs (%) |
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| Projects/Field Work (%) |
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| Seminars/Workshops (%) |
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| Final (%) |
60 |
| Other (%) |
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| Total(%) |
100 |
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| Course Book (s) and/or References |
Kıyılar, M. & Akkaya, M. (2016) Davranışsal Finans, Literatür Yayınevi. |
| Work Placement(s) |
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| The Relationship between Program Qualifications (PQ) and Course Learning Outcomes (LO) |
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