About 50 students from universities across the United States and Europe gathered at the Yale School of Management for the 2022 Yale Summer School in Behavioral Finance from June 13 to 17.
The one-week program is an intensive PhD course in behavioral finance led by the Yale SOM faculty members who are leading practitioners in this growing field. Held every two years, the program draws PhD students in finance and economics.
“This is the seventh Summer School we’ve held, and we’re delighted that it’s become a marquee event in the academic finance world,” said organizer Nicholas Barberis, the Stephen and Camille Schramm Professor of Finance. “More than 300 students have taken part in this program over the years, and many of them have gone on to do excellent research of their own in the field.”
In addition to Barberis, this year’s faculty from Yale SOM included Kelly Shue (above) and James Choi, both professors of finance. Five additional faculty from other schools also taught.
“We run the program because there is a growing sense among many of us that ideas from behavioral finance are central to understanding important financial phenomena, such as bubbles and crashes, stock market fluctuations, household investment mistakes, and the behavior of firm managers,” Barbers said.
And while there has been a lot of research in the field, not many schools offer courses on behavioral finance, Barberis said. “Yale SOM has historical strength in the area,” he added. “Modern behavioral finance started here at Yale, through the seminal work of Robert Shiller, and many of us have continued this tradition.”
Attendee James Paron, a PhD student at the Wharton School of Business, said that some understanding of the behavioral aspects of finance is “essential” today. “It will be an area of massive research in the future,” said Paron, whose research focuses on asset pricing and macroeconomics.
“Nick [Barberis] is a leader in the field and someone I wanted to learn from,” Paron said. “The external speakers, too, are not only knowledgeable in terms of finance, but also have interesting diverse perspectives.”
Kristen Burr, a first-year PhD student at Columbia University, also called the behavioral approach a crucial tool today. “It’s pretty important to consider the role that psychology plays when people make decisions,” she said. “I have the benefit of getting into finance at a time when behavioral finance is taking on a life of its own.”
Burr said the balanced structure and pace of the Summer School program helps students digest the material.
“I’m surprised at how much I’ve been able to take away already,” she said. “This is such a phenomenal opportunity early in my PhD to interact with professors whose papers I’ve read and to network with people who are thinking about the same type of problems I am.”
The Yale Summer School in Behavioral Finance is made possible through the generous support of the Lynne and Andrew Redleaf Foundation.