PYMPBSF: Psychological and Behavioural Sciences for Finance

Module code: PYMPBSF

Module provider: Psychology; School of Psych and Clin Lang Sci

Credits: 20

Level: Postgraduate Masters

When you'll be taught: Semester 1

Module convenor: Professor Philip Beaman, email: c.p.beaman@reading.ac.uk

Pre-requisite module(s): This module is only available to MSc Behavioural Finance students. (Open)

Co-requisite module(s):

Pre-requisite or Co-requisite module(s):

Module(s) excluded:

Placement information: NA

Academic year: 2024/5

Available to visiting students: No

Talis reading list: Yes

Last updated: 23 May 2024

Overview

Module aims and purpose

The aim of the module is to introduce students to the scope and nature of psychology as a science relevant to the understanding of financial markets. The emphasis will be on acquiring knowledge and understanding thereby developing students’ transferable skills of analysis, evaluation, and critical thinking. The content of the module offers a range of core topics with a strong focus on the scientific method and research practice.

Students will be introduced to a number of core areas within psychology relevant to the study of human behaviour within finance, such as cognitive, social and biological psychology. Students will study some of the classical studies within psychology, as well as being introduced to newer topics. There will be a specific emphasis upon research in behavioural economics and the psychology of judgment and decision making and an understanding of how this research has been applied in real-life (business and finance) settings.

Module learning outcomes

By the end of the module, it is expected that students will be able to:

1. Understand how psychology is studied as an empirical science and critically appraise some of the applications of psychology to finance and some of the pitfalls in uncritically applying the results of psychological studies
2. Critically analyse research on key phenomena in behavioural economics and critically evaluate different perspectives on rationality
3. Demonstrate a knowledge of core areas within cognitive psychology and cognitive neuroscience including attention, memory, judgment and decision-making, with particular emphasis on cognitive biases and biological influences on judgment, risk assessment and decision-making
4. Interpret and appraise some of the factors in social influence, including concepts such as conformity, (majority influence), groupthink, explanations of why people conform and decision-making within groups

Module content

The course will provide an introduction to the psychological study of human behaviour and experience using a scientific approach and an overview of both classic and cutting-edge studies in Psychology. We will discuss how this research is applicable to behaviour of individuals within financial markets and possible impacts on market behaviour. Content will include topics such as:

• Understanding psychology as a science;
• Cognitive limitations and biases;
• Psychological models of choice;
• Behaviour within and between groups;
• Brain bases of behaviour;
• Value, emotions, choice and risk;
• Stress and behaviour; and
• Intelligence and personality.

Structure

Teaching and learning methods

The classroom sessions will be made up of a mixture of staff presentation and teaching, interactive discussions, group activities and student presentations within the lecture. These will be further supported by a mixture of follow-up activities and guided reading.

Study hours

At least 22 hours of scheduled teaching and learning activities will be delivered in person, with the remaining hours for scheduled and self-scheduled teaching and learning activities delivered either in person or online. You will receive further details about how these hours will be delivered before the start of the module.

Please note the independent study hours above are notional numbers of hours; each student will approach studying in different ways. We would advise you to reflect on your learning and the number of hours you are allocating to these tasks.

Semester 1 The hours in this column may include hours during the Christmas holiday period.

Semester 2 The hours in this column may include hours during the Easter holiday period.

Summer The hours in this column will take place during the summer holidays and may be at the start and/or end of the module.

Assessment

Requirements for a pass

Students need to achieve an overall module mark of 50% to pass this module.

Summative assessment

Penalties for late submission of summative assessment

The Support Centres will apply the following penalties for work submitted late:

Assessments with numerical marks

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of three working days;
• the mark awarded due to the imposition of the penalty shall not fall below the threshold pass mark, namely 40% in the case of modules at Levels 4-6 (i.e. undergraduate modules for Parts 1-3) and 50% in the case of Level 7 modules offered as part of an Integrated Masters or taught postgraduate degree programme;
• where the piece of work is awarded a mark below the threshold pass mark prior to any penalty being imposed, and is submitted up to three working days after the original deadline (or any formally agreed extension to the deadline), no penalty shall be imposed;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

Assessments marked Pass/Fail

• where the piece of work is submitted within three working days of the deadline (or any formally agreed extension of the deadline): no penalty will be applied;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension of the deadline): a grade of Fail will be awarded.

The University policy statement on penalties for late submission can be found at: /cqsd/-/media/project/functions/cqsd/documents/qap/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Formative assessment

Formative assessment is any task or activity which creates feedback (or feedforward) for you about your learning, but which does not contribute towards your overall module mark.

Reassessment

Additional costs