Behavioral Economics and Finance by Prof. Iwasawa

Prof. Seiichiro Iwasawa conducted a lecture on “Behavioral Economics and Finance,” an elective module for the MBA Program. This course covers a fundamental understanding and applications of behavioral economics and finance. Behavioral economics analyzes actual behavior patterns of economic agents which matter in the market. In the first part of the lecture series, participants explore behavioral biases based on recent developments in cognitive psychology, their consequences in the actual marketplace, and how businesses respond to clients with those biases.

Prof. Iwasawa considered the application of behavioral economics in the context of the financial market by discussing a number of counterintuitive observations on the financial market, considering behavioral mechanisms behind such phenomena, and developing investment strategies to exploit inefficiencies in the market. Through discussion of a case study on a leading petroleum giant, Prof. Iwasawa highlighted how equity corporations respond to stock price variation, and how joint ventures and group holdings companies trade the same stocks in different global stock markets in order to increase their global market share.