More than 40 students from universities across the United States and Europe gathered at the Yale School of Management for the 2017 Yale Summer School in Behavioral Finance from June 19 to 23.
The one-week program is an intensive PhD course in behavioral finance led by the Yale SOM faculty members who are leading practitioners in this growing field. Held every two years, the program draws students in finance and economics.
“While many graduate students are interested in learning about research in this area, relatively few universities offer an advanced, cutting-edge course on behavioral finance,” said Nicholas Barberis, the Stephen and Camille Schramm Professor of Finance, who founded the summer program and teaches its central class. “We offer a one-week intensive introduction to the field. SOM is a center for behavioral finance research.”
Other faculty teaching in the program included Robert Shiller, Sterling Professor of Economics; James Choi, professor of finance; and Ulrike Malmendier, a professor of economics and finance at the University of California Berkeley. Electra Ferriello, senior administrative assistant in SOM’s International Center for Finance, provided logistical support.
Barberis said that the global financial unrest of recent years has attracted more scholars to the field. “The goal of behavioral finance is to try to make sense of markets and investor behavior by exploiting advances in the field of psychology in our understanding of how people form beliefs and make decisions,” he explained.
Pari Sastry, who is studying financial economics at the Massachusetts Institute of Technology’s Sloan School of Management, said her interest in behavioral finance began when she worked for the U.S. Federal Reserve. “A lot of the traditional explanations in economics were insufficient for explaining what we saw happening during the financial crisis,” she said.
“I learned so much from Nick Barberis about asset pricing,” Sastry said. “His approach—having a deep and intuitive understanding of the decision-making process—has been one of the most valuable takeaways for me.”
Participants also learned from each other. Stefano Cassella, a finance student at Purdue University’s Krannert School of Management, said that discussions with classmates specializing in diverse areas of economics and finance were enriching.
“The synergies you can develop surprised me,” he said. “I wanted to meet people with interests in similar areas who could bring differing viewpoints, and Yale is the hub for behavioral finance as a field across disciplines.”