Behavioral Finance, Fall 2020

Time & place: Fall 2020, Otaniemi, Aalto University School of Business

Learning goal and objectives

Behavioral Finance is an approach to the analysis of asset prices, corporate finance, and financial decision-making in general, that relaxes some key assumptions of neoclassical financial economics. Namely, it considers a larger class of objective functions, not always compatible with expected utility. Second, it entertains the possibility that expectations are sometimes biased, and not updated in a Bayesian manner. Third, it considers how various financial market frictions can form strong ‘limits to arbitrage’. This course is designed to introduce doctoral students to these concepts, and to support them in developing behavioral research ideas of their own.

Instruction and examination

Professor Markku Kaustia (Aalto University School of Business)

Credits: 6 ECTS

Grading: The grading is based on three parts (a written exam, a term paper and a classroom activity). The total points of this course are 100. In order to pass the course one needs at least 40% of points (i.e. 40 points). In addition, one has to get at least 40% of the points from the written exam.

Prerequisites: GSF Courses or equivalent knowledge

Admittance: 25 students. Finance PhD students have priority, but the course is also open for KATAJA-, FDPE-, and foreign doctoral students given that there is space in the course. Applications are sent directly to and application deadline will be announced later on in the course web pages: The acceptances will be announced shortly after the registration deadline

Instructors: Professor Markku Kaustia (Aalto University School of Business)

Course coordinator and contact information: Reetta Ali-Alha,, 040 353 8061. Application instructions on the course web page: