ECO 287 - Investments: Theory and Behavior

In this course we study the financial behavior of both idealized agents in economic models and actual humans faced with complex decisions, a large number of choices, uncertainty, and (mis)information.  The first part of the course introduces the financial system and financial assets and provides an overview of optimal investor behavior, including asset pricing, valuation, portfolio choice, and the life cycle model of consumption.  The second part includes a survey of the literature on behavioral finance, including overconfidence bias, herding effects, inertia and the effect of choice architecture, and the behavioral life cycle hypothesis.  We discuss various remedies to the mistakes often made by everyday participants in the financial system.

Satisfies the Social-Scientific Thought distribution requirement.
Satisfies the 20-series Economics major course requirement.

Prerequisites & Notes
Economics 101.