Yale Behavioral Finance Summer School Spotlights Faculty Research in a Growing Field

About 50 students from 21 different universities gathered at Edward P. Evans Hall earlier this month for the 2024 Yale Summer School in Behavioral Finance.

The week-long program is an intensive PhD course in behavioral finance taught by SOM faculty members who are leading practitioners in the field. Held every two years, the program draws graduate students in finance and economics.

“Behavioral finance is a vibrant field that is seen as increasingly important for understanding important facts about the financial world,” said organizer Nicholas Barberis, the Stephen and Camille Schramm Professor of Finance. “Yet many universities still don’t offer a research-oriented doctoral class in the subject.

“This program makes up for that, and SOM is the natural host, given that modern behavioral finance started at Yale with the work of our colleague Robert Shiller and continues today through the research of multiple SOM faculty members.”

In addition to Barberis, this year’s faculty included SOM’s James Choi and Kelly Shue, both professors of finance. Four additional faculty from other schools also taught. This year’s program also featured a new focus on emerging aspects of behavioral finance research.

Over the past 30 years, Barberis said, behavioral finance researchers have focused on incorporating “high-level” elements of psychology—such as people’s beliefs and risk attitudes—into economic research. More recently, however, researchers have turned their attention to the impact of “low-level” psychological processes like memory, attention, and perception.

“One important theme of this year’s summer school was to learn about this new work and to figure out if it’s the way forward,” Barberis said. “Three  speakers covered the topic from different perspectives. I was excited to see the students’ enthusiastic reactions.”

Attendee Giuditta Perinelli, a PhD student at the Massachusetts Institute of Technology, said that the program’s curriculum benefitted her research in macroeconomic finance and behavioral corporate finance.

“I’ve always been interested in the behavioral approach, and my advisor encouraged me to attend the Yale summer school for its structured exploration,” she said. “The amount of material we’ve covered has been impressive. Nick [Barberis] touched on just about everything that’s in the literature.”

The opportunity to network was another bonus. “All the faculty were terrific, and they were so available,” Perinelli said. “We had lunch with them, and there were social outings and dinners, and we got the chance to really get to know people in the field.”

Attendee Vicente Garcia Averell, a PhD student at London Business School, said that while interest in behavioral finance is increasing at business schools worldwide, Yale SOM’s concentration stands out. “It’s rare to have this breadth of distinguished faculty in one place, all focusing on behavioral finance,” he said.

He was also surprised by the scope of faculty research. “There is so much going on,” he said. “It’s a giant community, and I can incorporate a lot of these findings into my own work.” Averell’s research interests include international finance, financial crises, and empirical asset pricing.

The Yale Summer School in Behavioral Finance is made possible through the generous support of the Lynne and Andrew Redleaf Foundation. Karen Spitzer, assistant director of SOM’s International Center for Finance, provided “ outstanding administrative support,” Barberis noted.