1. Behavioral Finance
Economics 437

2. Recent Published Research in Behavioral Finance
Chang, Solomon, Westerfield in the Feb 2016 issue of the Journal of Finance
McLean and Pontiff in the Feb 2916 issue of the Journal of Finance

3. Chang, Solomon, Westerfield
Update on the disposition effect: tendency to sell winners rather than losers
Observed with single stocks
The opposite seems to occur with mutual funds
Why?
If it was your original decision, you are more likely to sell winners, but if there is a money manager, you are more likely to sell losers

4. McLean and Pontiff
“Does Publishing Research Destroy Predictability?”

5. Final Exam – Monday May 3rd 2PM – 5 PM Wilson Auditorium
All readings on the syllabus
Kahneman: ”Thinking: Fast and Slow”
Thaler: “Misbehaving”
Burton-Shaw: pp.1-51, Chapters 8, 14, 15, 17
Plus Articles:
Malkiel, Shiller, Fama, Black
Shleifer: Chapters 1, 2 (or collab articles)
DeBondt-Thaler; Fama-French; Jegadeesh-Titman; Lakonishok-Shleifer-Vishny, Haugen-Baker(intro); Hanna-Ready(intro)
All lectures, all powerpoint slide presentations
Big Topics: EMH vs BF; Shleifer Noise Trader Model, Anomalies, Predictability
Nothing is ruled out
Bring only pen and pencil to exam: no scratch paper, no books, no calculators, etc.

6. The End