Teaching - Neurofinance
Neurofinance is a relatively new area that strives to understand financial decision making by adding insights from psychology and neuroscience to traditional theories of finance. Neurofinance examines – both behaviorally and neurally – how we evaluate information about financial options that are uncertain, time-constrained, risky and strategic in nature, and lead to potential gains or losses. A primary question of Neurofinance is how our financial decisions are influenced by emotions, psychological biases, stress and individual differences (such as gender, genes, hormones and neurotransmitters and personality). To answer these questions Neurofinance uses behavioral experiments to observe and describe individual behavior – in financial markets and otherwise. Neurofinance then asks how the brain processes financial information and how individual decisions arise in the brain. These behavioral and brain imaging experiments combined with computational models aim to provide an alternative explanation for the apparent failure of standard finance theories.