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Chapter 1

The document outlines the course on Behavioral Finance, led by Ths. Phạm Chí Khoa, covering topics such as neoclassical economics, expected utility theory, attitudes toward risk, and the Allais paradox. It discusses key concepts like rational preferences, utility maximization, and the challenges of acquiring relevant information. The Allais paradox is highlighted as a contradiction to expected utility theory, prompting analysis of decision-making under risk.

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0% found this document useful (0 votes)
9 views18 pages

Chapter 1

The document outlines the course on Behavioral Finance, led by Ths. Phạm Chí Khoa, covering topics such as neoclassical economics, expected utility theory, attitudes toward risk, and the Allais paradox. It discusses key concepts like rational preferences, utility maximization, and the challenges of acquiring relevant information. The Allais paradox is highlighted as a contradiction to expected utility theory, prompting analysis of decision-making under risk.

Uploaded by

Thu Hiền
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

1

COURSE:
TÀI CHÍNH HÀNH VI
BEHAVIORAL FINANCE
Lecturer: Ths. Phạm Chí Khoa
Email: khoapc@[Link]
Điện thoại: +84908877324
2
3

Nội dung của chương


▫ Kinh tế học tân cổ điển
 Sự ưa thích hợp lý
 Tối đa hóa mức hữu dụng
 Thông tin liên quan
▫ Lý thuyết hữu dụng kỳ vọng
 Các khái niệm
 Các tiền đề cần thiết
 Đạc điểm của hàm hữu dụng
▫ Thái độ đối với rủi ro
▫ Nghịch lý Allais
4

1.1. Neoclassical Economics


• In neoclassical economics, individuals and firms are
assumed to be self-interested and aim to maximize their
benefits under conditions of limited resources. Asset
values are determined by the market through the
interaction of supply and demand.
• Neoclassical economics is based on three main
assumptions about human behavior:
• Individuals have rational preferences among available
alternatives.
• Individuals maximize utility, while firms maximize profit.
• Individuals make independent decisions based on all
relevant information.
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1.1.1. Rational Preferences



6

1.1.1. Rational Preferences



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1.1.2. Utility Maximization


• Utility theory is used to describe preferences.
• A utility function helps represent choices through
numerical values.
• A more preferred choice will have a higher utility
value. Utility is ordinal rather than cardinal.
• Typically, a choice is represented by a bundle of
goods.
• To achieve the optimal choice, an individual must
consider all available options under a budget
constraint and select the bundle of goods that
maximizes utility.
8

1.1.2. Tối đa hóa mức hữu dụng (tt)


• Ví dụ: hàm hữu dụng logarit đối với mức độ tài sản
Mức độ ($10,000) U(w) = ln(w)

1 0

10 2,3026

20 2,9957

30 3,4012

50 3,9120

100 4,6052
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1.1.2. Tối đa hóa mức hữu dụng (tt)


10

1.1.3. Relevant Information


• Information is rarely freely available.
• In addition to the cost of acquiring
information, individuals must also incur costs
of comparing, evaluating, and
interpreting that information.
11

1.2. Expected Utility Theory


• Expected utility theory is used to describe
rational behavior when individuals face
uncertainty.
• Expected utility theory has a normative
nature.
• In reality, people often make decisions under
risk.
• For most purposes, when analyzing decisions
under risk, the level of wealth is the key
factor.
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1.2. Expected Utility Theory



13

1.2. Expected Utility Theory



14

1.3. Attitudes Toward Risk



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1.3. Attitudes Toward Risk



16

.4. The Allais Paradox


• The Allais paradox refers to contradictions
to expected utility theory.
• Consider the following choices:
• Answer the questions for the table below:
• Choose A or A*
• Choose B or B*
17

.4. The Allais Paradox


Các lựa chọn triển vọng
Câu hỏi 1
Triển vọng A Triển vọng A*
$1.000.000 100% 0 1%
$1.000.000 89%
$5.000.000 10%
Câu hỏi 2
Triển vọng B Triển vọng B*
0 89% 0 90%
$1.000.000 11% 5.000.000 10%
18

.4. The Allais Paradox


•It represents contradictions to the Expected
Utility Theory.
•Answer the following questions based on
the table below:
•Choose A or A*
•Choose B or B*

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