University General Course Catalog 2021-2022 
    
    Aug 18, 2022  
University General Course Catalog 2021-2022
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ECON 727 - Behavioral Financial Economics

(3 units)
This course examines the applications of Behavioral Economics to Macroeconomics and Financial Economics. The heuristics and biases of decision making are examined at both the microeconomic and macroeconomic levels but with a focus on macro and financial applications. Laboratory experiments on asset allocation decisions are studied. Students will design their own laboratory experiments.

Maximum units a student may earn: 3

Prerequisite(s): ECON 703 .

Grading Basis: Graded
Units of Lecture: 3
Offered: Every Spring - Even Years

Student Learning Outcomes
Upon completion of this course, students will be able to:
1. identify key ideas in Behavioral Economics as they apply to Macroeconomics and Financial Economics.
2. identify the mental shortcuts that humans, in general, and market participants, in particular, typically rely upon.
3. explain that mental shortcuts, also called heuristics, are used because they are ecologically rational (i.e, frugal and useful, on average, in a given environment) even if they are not generally valid across all environments.
4. distinguish the concept of (generic) rationality from environment-specific rationality (or ecological rationality).
5. recognize the upsides & downsides of applying ecological rationality.
6. recognize the different kinds of bounded rationality along the spatial, time and risk domains.


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