User:Uttsinghuajoint2014/Course Page/Timeline

Investor Psychology and Behavioral Finance
Traditional finance seeks to understand financial markets assuming that investors are “rational.” Rationality means that investors can access to and have the ability to process information correctly and that competition between investors ensures that securities are correctly priced to reflect all available information. That is, the market is efficient.

However, recent studies suggest that markets are not efficient and that investors are not fully rational. Studies find that investors are committed to certain heuristic-based biases and frame dependent such as overconfidence, optimism, self-attribution, illusion of control, loss aversion, representativeness heuristic, anchoring, availability, ambiguity aversion, hindsight, flaming, etc. Behavioral biases combined with limits to arbitrage and investors’ inattention to information may result in securities not to be correctly priced.

This course will help students understand how individuals’ attitudes and behaviors affect their financial decisions and financial markets. In the practical side, this course will emphasize the role of investors’ psychological biases on various types of market inefficiency and show that how sophisticated investors can take advantage of these behavioral biases. This is a research oriented course with emphasis on both psychology theories and data analysis skills. In the data analysis part, students will learn the skills in:

1) processing mega data from standard data sources (e.g., WRDS database);

2) acquiring and supplying information via online social media websites:	2.1) acquiring information: SEC’s EDGAR (http://www.sec.gov/edgar.shtml), Factiva, LexisNexis, and Wikipedia, etc.	2.2) supplying information: Wikipedia

3) simulating data with RIT simulators to verify bias-driven asset mispricing.

MSE (Management Science & Engineering) Seminar
Full Name: MSE (Management Science & Engineering) Seminar – Social Media and Financial Markets

Emerging information and communication technologies (ICTs) have facilitated an explosive growth of social media. Social media change the ways people acquire, process, exchange, and distribute information. The information systems (IS) area has long argued that the fundamental role of ICTs is to enhance information processing and dissemination in the market, thereby improving market efficiencies. In this seminar course, we will focus on a burgeoning strand of academic studies that examine roles played by social media in information search, supply, and processing by market participants in the financial markets.

This course consists of three modules:

(A) Information search and acquisition over the Internet (e.g., Google, EDGAR, Factiva, LexisNexis, etc.);

(B) Information supply and dissemination via social media (e.g., Twitter, crowd sourcing sites, Wikipedia, etc.);

(C) How individuals process information over social media (e.g., discussion boards, Wikipedia, etc.).

This course has two major objectives of learning: (i) students become familiar with the major topics addressed by the growing literature on social media and financial markets; (ii) students get some firsthand experience of acquiring and supplying information over social media, so as to understand how social media work as information channels in the financial market.

Student deliverables include the following: (a) present papers in the reading list (team work); (b) submit critiques on the assigned papers (individual work); (c) create corporate entries on Wikipedia for assigned companies (team work).

Some Clarifications to Wikipedia Editors
a) The goal of the student project is twofold:

(1) to help students understand how a typical social media platform works in supplying corporate relevant information to the public;

(2) to increase Wikipedia’s coverage of public companies, to make it a more powerful platform for individuals to learn and share information about public companies. b) The nature of the companies added to Wikipedia:

We create, maintain, and enrich entries for publicly traded companies. The U.S. Securities and Exchange Commission has repeatedly emphasized that it is extremely important for individuals to have unbiased information about ALL publicly traded companies (http://www.sec.gov/about/whatwedo.shtml). To our surprises, we found that several hundreds of publicly traded companies did not have their corporate entries on Wikipedia. Also, for public firms currently covered by Wikipedia, a lot of corporate information is incomplete or outdated.

c) The nature of the information added:

We ask students to search online, to find important and verifiable information about companies’ facts. We ask students NOT to add any subjective opinions or anything based on rumors.

d) How do we work?

(1) To help students get started, we provide students with templates for user page and corporate entries on Wikipedia. We strongly encourage students to modify and personalize.

(2) The two courses at University of Toronto and Tsinghua University will work continuously on these companies in the future. We will continue to maintain and enrich Wikipedia entries for publicly traded companies.

(3) Students will work as teams, which we hope helps ensure the NPOV of information added. (For example, in the Fall semester at Tsinghua university, there are currently 6 teams (each team with 5-6 students) and each team is asked to create about 30 corporate pages.) (4) Each of our two courses has a TA who is assisting the students in the assignment. These TAs are postgraduate students at the University of Toronto and Tsinghua University. Their main responsibility is to monitor the involved entries and ensure that the modifications do not violate Wikipedia policies.

e) Compliance to Wikipedia’s spirit and policy

We confirm that all of our activities are part of an educational program, and all of our activities are conducted by professors and students for educational purposes. Students are urged to carefully study guidelines and polies of Wikipedia (e.g., copyrights, NPOV, facts rather than opinions, etc.).

f) A long-term initiative:

We aim to improve Wikipedia pages continually in the two courses in the future. Right now, given that students in each session have limited time, some of the pages may appear preliminary. But this is the nature of Wikipedia and we hope our work will attract more and more useful contributions from other users. Many students in our courses, including those at the University of Toronto, are not native English speakers. It is possible that their contributions are not organized in perfect English. We will do our best to provide support to avoid it. At the same time, we would like to (gratefully) ask for understanding and patience from Wikipedia editors. We hope our efforts in creating new entries and improving the quality of existing pages can be recognized and appreciated.

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