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Behavioral Finance - WS 12/13

Lehrstuhl für BWL, insb. Finanzierung
Prof. Dr. Thomas Langer
Universitätsstraße 14 - 16 48143 Münster Tel. (02 51) 83 - 220 33

Behavioral Finance lecture #1 - Oct. 08, 2012

0

What is behavioral finance?

Assume you need some liquidity and think about selling some stocks from your portfolio.

Your position in Siemensshares seems to fit well for this purpose.

Behavioral Finance lecture #1 - Oct. 08, 2012

1

What is behavioral finance?

You remember that you purchased the
Siemens shares in
September 2008.

Shortly before submitting your selling order you check the exact purchase date of the shares …

Behavioral Finance lecture #1 - Oct. 08, 2012

2

What is behavioral finance?

… and recognize that you actually bought the shares some months earlier, in February
2008.

This makes you change your mind … and you decide to sell a different type of stock instead. Behavioral Finance lecture #1 - Oct. 08, 2012

3

What is behavioral finance?

Such a behavior is

Behavioral Finance lecture #1 - Oct. 08, 2012

4

Motivation/Introduction
Let‘s look at another example and play a game

Rules of the game
• Every student in this class …

Behavioral Finance lecture #1 - Oct. 08, 2012

5

1 – Motivation / Basic concepts of Behavioral Finance

Motivation/Introduction

What is Behavioral Finance?
Basic idea of Behavioral Finance
Use insights from the behavioral sciences on individual decision making to
 better understand and predict the behavior of financial decision makers and the implications for the functioning of capital markets

Behavioral
Finance

Behavioral Finance lecture #1 - Oct. 08, 2012

neoclassical financial theory

is a(n)

6

1 – Motivation / Basic concepts of Behavioral Finance

Motivation/Introduction

Behavioral Economics

Behavioral Finance

A real individual is not a

Finance

homo oeconomicus

many
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