Traditional finance assumes that individuals and organizations make rational financial decisions based on complete information and objective analysis. In practice, however, financial decision-making is strongly influenced by psychology, emotions, cognitive biases, social influences, and environmental factors. Investors, executives, lenders, entrepreneurs, consumers, and policymakers frequently make decisions that deviate from purely rational behavior, leading to mispriced assets, poor investments, excessive risk-taking, financial bubbles, and avoidable losses.
This course provides a practical, management-oriented study of behavioral finance by integrating principles from finance, psychology, economics, and decision science. Rather than focusing solely on theoretical behavioral models, students will examine how psychological factors influence investment decisions, corporate finance, banking, entrepreneurship, mergers and acquisitions, financial planning, and organizational leadership. Students will learn to recognize predictable decision-making biases, evaluate their effects on financial outcomes, and develop practical strategies for improving judgment under uncertainty.
Throughout the course, emphasis is placed on real-world financial behavior observed in individuals, financial institutions, corporations, investment firms, and markets. Students will develop the ability to make more disciplined financial decisions by understanding the human factors that influence capital allocation, risk assessment, negotiation, leadership, and long-term wealth creation.
Course Objectives
By the end of this course, students will be able to:
• Understand the psychological foundations of financial decision-making.
• Identify common cognitive and emotional biases affecting financial choices.
• Evaluate how behavioral factors influence investment, corporate finance, banking, and entrepreneurship.
• Analyze financial market behavior through the lens of human psychology.
• Improve risk assessment and decision-making under uncertainty.
• Recognize the effects of social influence and group behavior on financial markets.
• Develop practical frameworks for reducing bias in financial decisions.
• Apply behavioral finance principles to leadership, governance, and strategic management.
• Improve organizational financial decision-making through evidence-based approaches.
• Integrate behavioral insights into long-term financial strategy and value creation.
