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FB605 – Behavioural Finance

Master of Science in Financial Services

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Elective Course

FB605 – Behavioural Finance

Course Unit Code: FB605

Type Of Unit: Elective

Level of Course Unit: Second cycle

Year of Study: First/second year

Semester: On-demand

Number of ECTS Credits: 6

Class Contact Hours: 28

Mode of Delivery

Face to Face

Prerequisites

Introductory Finance

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Behavioural Finance studies the limited rationality of investors, finance professionals, and the financial markets. In particular, the field explores the impact of market-players’ bounded rationality and psychological bias on the financial markets and asset prices. The course will introduce selected topics in behavioural finance, underlying the practical implications of the academic research to investors and finance-industry professionals.

Learning Outcomes

The students completing the course should be able to:
CILO 1 Familiarize with major failures in the financial decision of private investors and professionals.
CILO 2 Identify cases of market inefficiency (anomalies) related to the bounded rationality or psychological bias of investors and finance professionals.
CILO 3 Increase their in-depth knowledge in finance, connecting to current events, trading strategies, the professional analysis industry, the recent spread of Web trading platforms and more.

  1. Introduction: Prospect theory. The multi-dimensionality and context- dependence of attitudes to risk. CILO 1
  2. The equity premium puzzle and myopic loss aversion. Implications for pension savings. CILO 1
  3. The disposition effect: Selling winners too early and riding losers too long. The reach of the disposition effect and domains where it reverses. CILO 1
  4. The unbearable lightness of financial decision: faming effects and mental accounting. Affect. CILO 1,2
  5. Bubbles and crashes in financial markets. Discussion in light of the 2008 crises. Correlation neglect. CILO 2
  6. Overconfidence and excessive trading. Momentum and contrarian investment strategies. CILO 2,3
  7. The professional analysis industry. Behavioural bias amongst analysts and consumers of analysts’ reports. CILO 3

Course Features

F2F lectures and discussion.
40% – Two homework assignments (20% each)
60% – Final paper

Readings

Required reading

The list of research papers covered along the course will be posted on Moodle. Pdfs of the most important papers will be uploaded to Moodle.

Recommended reading:

Barberis, N. (2018). Psychology-based models of asset prices and trading volume. In Handbook of behavioral economics: applications and foundations 1 (Vol. 1, pp. 79-175). North-Holland.
Shefrin, H. (2022). Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investments. Oxford University Press.
Barberis, N., & Thaler, R. (2003). A survey of behavioral finance. Handbook of the Economics of Finance, 1, 1053-1128. For free download (of a preceding version) visit: http://www.nber.org/papers/w9222
Shiller, R. J. (1999). Human behavior and the efficiency of the financial system.
Handbook of macroeconomics, 1, 1305-1340.

Call Center

CYPRUS

GREECE

INTERNATIONAL

Request Information Request Information ⟶

Informed Consent Form

Dear Participant,

You are invited to participate in a survey as part of the DiFiCy – Digital Transformation and FinTech: Shaping Cyprus’s Economy research project which is implemented by the University of Limassol, PwC Cyprus and Unity Growth Limited.

The project is co-funded by the European Union within the framework of the Cohesion Policy Programme “THALIA 2021-2027” through the Research and Innovation Foundation (RIF) in Cyprus [Pr. number: EXCELLENCE/0524/0568].

The study has been approved by the National Bioethics Committee of Cyprus (Approval no.: EEBK EΠ 2025.01.19 )

This project explores digital transformation and FinTech adoption in Cyprus, with a particular focus on SMEs and the broader business ecosystem. It uses a mixed-methods research design, combining survey data with interviews and case study evidence to generate evidence-based insights for policymakers and businesses.

Before deciding whether to participate, please read the following information carefully.

Purpose of Participation

The purpose of this research is to better understand the drivers, challenges, and impacts of digital transformation and FinTech adoption in Cyprus. The findings aim to support evidence-based policymaking, strengthen business practices, and contribute to innovation and economic development.

Your participation involves the following:

Completion of this survey, which takes approximately 15 minutes.

Invitation to take part in an optional interview.

Contribution to a case study or discussion session at a later stage.

Your participation is entirely voluntary, and you are free to decline or withdraw at any time without any consequences.

If you wish to withdraw from the study after submitting your responses, you may do so by contacting the Project Coordinator.

Data Confidentiality and Usage

All data collected will be handled in strict accordance with the General Data Protection Regulation (GDPR) and Cyprus Data Protection Law (125(I)/2018).

Your data will be treated confidentially, pseudonymised and anonymised, and no personally identifiable information will be disclosed. Data will be securely stored and accessed only by authorised members of the research team. In some cases, qualitative data may be processed using machine learning techniques, such as keyword identification or pattern detection, strictly to support analysis; however, all interpretation and conclusions will be made by the researchers.

Aggregated and anonymised findings derived from the data (e.g., statistical summaries, graphs, and thematic insights) may be used for dissemination activities, including scientific publications, policy reports, infographics, and training materials. These outputs will not contain any information that could directly or indirectly identify participants or their organisations.

Anonymised data may be shared publicly after a 24-month embargo period, while raw or sensitive data will not be publicly available. Access to raw or sensitive data will be granted only upon justified request and consortium approval.

Your participation in this study does not involve any risks.

On the contrary, your contribution may help improve digital and FinTech policies, support SME development and innovation strategies, and enhance the overall business environment in Cyprus.

Contact Information

If you have any questions, concerns, withdraw requests or complaints, please contact the Project Coordinator, Dr. Snezana Eminidou. Please include “DiFiCy Survey” in the subject line.

Email: snezana@uol.ac.cy

Phone number: +357 22462228

Partnership:

Thank you for your valuable contribution to this research.

The project is co-funded by the EU within the framework of the Cohesion Policy Programme “THALIA 2021-2027” through the Research and Innovation Foundation. [Pr. no. EXCELLENCE/0524/0568]. The content reflects the views of the author(s) only. The European Commission and the Managing Authority of THALIA 2021–2027 cannot be held responsible for any use which may be made of the information contained therein.