Schwerpunktseminar: Behavioral Finance
Summer Term 2012
Marta Serra-Garcia, PhD
Topics and Readings:
1. Introduction: Psychology and Economics
a. DellaVigna, S. (2009), Psychology and Economics: Evidence from the field, Journal of
Economic Literature 47, 315-372.
b. Barberis, N. and R. Thaler (2003), A Survey of Behavioral Finance, Handbook of the
Economics of Finance, ed. G.M. Constantinides, M. Harris and R. Stulz. *Section 2 only
2. Prospect Theory and the Equity Premium Puzzle
a. Kahneman, D., and A. Tversky, (1979), Prospect Theory: An Analysis of Decision under
Risk, Econometrica 47, 263-291.
b. Bernartzi, S. and R. Thaler (1995), Myopic Loss Aversion and the Equity Premium
Puzzle, Quarterly Journal of Economics 110, 75- 92.
3.
The Disposition Effect and Overconfidence
a. Shefrin, H. and M. Statman (1985), The Disposition to Sell Winners Too Early and Ride
Losers Too Long: Theory and Evidence, Journal of Finance 40 (3), 777-790.
b. Odean, T. (1998), Are investors reluctant to realize their losses?, Journal of Finance
53:1775−1798
c. Odean, T. (1998). Do Investors Trade Too Much? American Economic Review
89:1279−1298.
4. Present-Biased Preferences, Borrowing and Saving
a. Laibson, D., (1997), Golden Eggs and Hyperbolic Discounting, Quarterly Journal of
Economics
b. Meier, S., and C. Sprenger, (2010), Present-Biased Preferences and Credit Card
Borrowing. American Economic Journal: Applied Economics 2 (1), 193-210.
c. Thaler, R. and S. Benartzi (2004), Save More Tomorrow: Using Behavioral Economics to
Increase Employee Saving. Journal of Political Economy 112 (1), 164-187.
5. Over-indebtedness and Financial Literacy
a. van Rooij, M., A. Lusardi, and R. Alessie. (2011). Financial Literacy and Stock Market
Participation. Journal of Financial Economics.
b. Lusardi, A. and P. Tufano, (2009). Debt Literacy, Financial Experiences, and
Overindebtedness. Working paper.
6. Complexity and Financial Choices
a. Choi J. J., Laibson D., Madrian B. C., (2010). Why Does the Law of One Price Fail?
Review of Financial Studies 23 (4), 1405-1432.
7. Field Experiments
a. Bertrand, M., and A. Morse, (2011). Information Disclosure, Cognitive Biases and
Payday Borrowing. Journal of Finance 66 (6), 1865-1893.
b. Cole, S., Sampson T. and B. Zia, 2011. Prices or Knowledge? What Drives the Demand
for Financial Services? Journal of Finance, forthcoming.