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Introduction to Behavioural Finance

Gain a better understanding of behavioural finance and its role in economics with this free online course.

Teaching & Academics
Free Course
This free online Behavioural Finance course will introduce you to how neoclassical economics defines rational and irrational human behaviour. In this course you will learn about how behavioural finance questions long-held beliefs in economics such as how individual demand curves can be applied to the market in general. You will also delve into the proof by contradiction, the Axioms of Revealed Preference, and a whole lot more.





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This course begins by discussing the characteristics of human behaviour as defined in the areas of microeconomics, macroeconomics, and finance. You will study the Strong Axioms of Revealed Preference (SARP) which states that in a world where there are only two goods to choose from, the strong and weak actions are shown to be equivalent. You will also look into the Weak Axiom of Revealed Preference (WARP) which states that if one product or service is purchased instead of another, then the consumers will always make the same choice.

You will then look into why individual demand curves cannot be converted into a market demand curve. This course will discuss how proof by contradiction shows that the Law of Demand does not apply to the market demand curve. You will learn why normal human behaviour must violate the Revealed Preference model which is an economic theory regarding an individual's consumption patterns and asserts that the best way to measure consumer preferences is to observe their purchasing behaviour.

Behavioural finance is a new and exciting area in economics that combines the psychology of human behaviour with the traditional theories of finance and economics. The result is a new explanation of how modern economies work, such as how markets are affected by the behaviour of investors. Upon the completion of this course, you will have a better understanding of the role of behaviour in economics and become familiar with the rational behaviour in economic theory and the Axioms of Revealed Preference. Check out this course and developing a new understanding of modern economics and finance.

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