The Psychology of Decision Making (Behavioral Finance) in a Nutshell!
How does the 'black box' of a brain make decisions? Think of the human brain as a filter that takes in all sorts of information and data (input) for further processing and computation; just like a computer, but a very basic computer with very limited computational capabilities. Our choices and decisions use the resultant computations (output). Because of our cognitive limitations, both psychologists and neuroscientists tell us that the brain may "pick and choose" the bits and pieces of info/data that it filters in - often subconsciously! The biased use of filtered input combined with the influence of emotions and mental shortcuts lead people to make seemingly poor and irrational choices. These problems are exacerbated for decisions involving higher levels of complexity and uncertainty, characteristics common to financial decisions. In a nutshell, this is the basis of the revolutionary science of financial decision-making known otherwise as behavioral finance!
Understanding psychological biases compliments the traditional finance tools. In fact, Behavioral Finance explains why we often fail to use these tools and therefore make suboptimal choices.
SEMINAR I: Investment
The objective of this seminar is to identify and avoid key psychological errors. Specifically, it offers a clear understanding of (and an appreciation for) the underlying psychological factors and processes that result in nonoptimal decision making by financial managers and investors across different financial markets. Then it discusses the steps that managers and investors can take to mitigate these problems utilizing well developed tools and practices of theory.
| DAY 1 |
DAY 2 |
- The psychology of decision making under conditions of risk and uncertainty
- Neuro-Finance: How decisions are made in the brain
- Behavioral foundations of finance with special focus on perceptions of risk and reward
- Prospect theory; Loss Aversion; Disposition effect; Overconfidence; Heuristics and emotions
|
- Valuation of assets/securities-value creation, and value destruction in the corporate world
- Price Anomalies; IPO under-pricing; Equity premium; Bubbles
- Investment and trading strategies in behavioral finance
- Mergers and acquisitions-investment lessons learned
- Financial regulation and policy
|
WHO SHOULD ATTEND?
The target audience for the Investment seminar is portfolio managers, security analysts, bankers, and financial advisors and consultants. A working knowledge of the financial markets and securities is required for enrollment in this seminar. |
SEMINAR 2: Behavioral Corporate Finance
A study of the key psychological obstacles to value-maximizing behavior and steps that managers can take to mitigate them using the traditional tools of corporate finance. The focus of this seminar is on understanding the underlying factors and processes that result in nonoptimal decision making by financial managers.
| DAY 1 |
DAY 2 |
- The psychology of decision making under conditions of risk and uncertainty
- Neuro-Finance: How decisions are made in the brain
- Behavioral foundations of finance with special focus on perceptions of risk and reward
- Prospect theory; Loss Aversion; Disposition effect; Overconfidence; Heuristics and emotions
|
- Expert decision-making and the "10-year rule" of expertise
- Rational Managers/Irrational Markets and Corporate Decisions
- Rational Markets/Irrational Managers and Corporate Decisions
- Behavioral Pitfalls in Capital Budgeting and Mergers and Acquisitions
- Dividend Policy Decisions
- Agency Conflicts and Corporate Governance
- Group Decision Making-Behavioral Pitfalls
|
WHO SHOULD ATTEND?
The target audience for the Corporate Finance seminar is managers, bankers, portfolio managers, security analysts, and corporate consultants. Basic managerial experience along with a working knowledge of the financial markets and securities
is required for enrollment in this seminar. |
Core Faculty Group:please see the complete brochure
The Complete Brochure: to immediately receive the complete brochure please click here
| Contact Information: |
Email (for faster response):
staff@aobf.org or
Phone: 818.236.2145
Mailing Address:
Academy of Behavioral Finance & Economics
P.O. Box 157
Montrose, CA 91021-0157 |
|
Second Annual Meeting of the Academy of
Behavioral Finance & Economics
