PROF. DR. DR. H.C.

MARTIN WEBER

Syllabus FIN361 Consumer Finance Dr. Christine Kaufmann HWS 2012

Course Description The course gives an introduction to the field of consumer finance, which covers the use of financial instruments by private households. Financial decision making is among the most important but also the most complex problems individuals face these days. Topics include both investing decisions and credit decision of consumers, highlighting several influencing variables such as cognitive abilities, financial literacy, age, and experience. Another emphasis will be on retirement savings with coverage of savings programs, annuities and retirement consumption. Finally the interaction of the consumer with his peers and financial intermediaries such as advisors will be discussed. The course corresponds to 3 ECTS credits. Schedule Lecture 1 Lecture 2 Lecture 3 Lecture 4 Lecture 5 Lecture 6 Lecture 7 Lecture 8 Lecture 9 Lecture 10 Introduction Determinants of financial decision making Stock market participation Social interaction Investor Experience Mutual fund investments Credit decisions Retirement Savings I Retirement Savings II Financial Advice

Core Readings Campbell (2006): Household Finance, Journal of Finance, 61(4), 15531604. Tufano (2009): Consumer Finance, Annual Review of Financial Economics, 1, 227 247. Further Readings Agarwal and Mazumder (2001): Cognitive Ability and Household Financial Decision Making, Working Paper. Bhattacharya, Hackethal, Kaesler, Loos, and Meyer (2012): Can Unbiased Financial Advice Steer Retail Investors Towards Efficient Portfolios? Answers from a Large Field Study, Review of Financial Studies, forthcoming. Benartzi / Thaler (1995): Myopic loss aversion and the

Universitt Mannheim Lehrstuhl fr ABWL, Finanzwirtschaft, insbesondere Bankbetriebslehre

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equity premium puzzle, Quarterly Journal of Economics, Vol. 110, 73-92. Benartzi and Thaler (2004): Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving, Journal of Political Economy, Vol. 112(S1), S164-S187 Hong/Kubik/Stein (2004): Social Interaction and StockMarket Participation, Journal of Finance, 59(1), 137163 Kaustia/Knpfer (2008): Do Investors Overweight Personal Experience? Evidence from IPO Subscriptions, Journal of Finance, 63(6), 26792702. Scharfstein and Stein (1990): Herd Behavior and Investment, The American Economic Review, 80 (3), 465-479. Sirri and Tufano (1998): Costly Search and Mutual Fund Flows, The Journal of Finance, 53, 1589-1622.

Course Requirements and Evaluation Prerequisites: The course is open for exchange students. Students are assumed to have undergraduate level knowledge of economics. Some basic econometric skills are helpful to understand empirical research conducted in the research papers, which the courses content is based on. A sufficient level of spoken and written English language skills is necessary. Grading for the course is determined by a final 90 minutes exam. Learning Outcomes The course aims are at giving students an overview of the research field of consumer finance both with regards to current research topics and methodology used. Office Hours Please contact me whenever you feel the need to clarify questions. We will then schedule a meeting or Ill answer your question via email (kaufmann@bank.bwl.uni-mannheim.de) or phone. Of course, you can (and should) also ask questions during or after our classroom sessions.