Behavioural Economics:Accounting&Finance (ECON90062)

Intended learning outcomes

On successful completion of this subject, students should be able to:

• explain the behavioural patterns uncovered in behavioural economics;
• explain some of the techniques used by behavioural economics to create knowledge;
• evaluate the contribution of behavioural economics to accounting and finance research;
• synthesise and contrast some of the recently created knowledge for accounting from behavioural economics with knowledge from more traditional accounting research;
• write coherent accounts of issues in behavioural economics;

Generic skills

In terms of cognitive skills, by studying this subject students will improve their ability:

• to explain an argument logically, such as how loss aversion and myopia implies a large premium of equity over bonds;
• to synthesize and contrast different ideas and theories, such as the synthesis of two theories of saving, that is the rational agent theory and the multiple self theory;
• to apply theories to the real world, for example the implications for portfolio choice of mental accounts;
• to evaluate the relevance of competing theories, in particular behavioural economics compared with traditional economics.

At a broader level, this subject will increase students’ awareness of over-arching issues, especially:

• the value of academic research;
• the development of knowledge;
• the contribution of rigorous thinking to solving economic and social problems;
• the interplay of fact, values and theory.