GUTMANN CENTER FOR PORTFOLIO MANAGEMENT at the University of Vienna - http//:www.gutmann-center.at invites to the following PUBLIC LECTURE: (Apologies for any cross-listings!): Date: DECEMBER 5th, 2006, (Tuesday) - 4.00 pm Location: Bank Gutmann AG, Schwarzenbergplatz 16, 1010 Wien Speaker: Prof. Dr. PETER BOSSAERTS, California Institute of Technology (Caltech) http://www.hss.caltech.edu/~pbs/ Title: NEURO-FINANCE Abstract: Finance has always treated humans as black boxes, whereby behavioral rules are either imposed by decision theory (neoclassical finance) or derived from observation of actual or hypothetical choice (behavioral finance). In contrast, neuro-finance attempts to understand behavior by examining the physiological processes in the human brain when exposed to financial risk. The talk will illustrate this with the recent discovery that the brain analyzes monetary gambles by separately encoding their expected payoff and the payoff variance (even when subjects have never heard of these concepts). As such the brain uses the same inputs as Markowitz' portfolio theory. This is in sharp contrast with economics (which includes Prospect Theory), which represents desirability of gambles through scores on a single-dimensional utility scale. About Peter Bossaerts: Peter Bossaerts is William D. Hacker Professor of Economics and Management and Professor of Finance at the California Institute of Technology (Caltech). At present, he is at the Université de Lausanne as Swiss Finance Institute Visiting Professor. Prof. Bossaerts holds a PhD in Management (Finance) from UCLA. His current research area is experimental finance, in particular, neuro-finance. He investigates cognitive biases and their impact on asset prices, through observation of individual behavior, observation of price formation in large-scale experimental financial markets, and through analysis of brain activation while individuals face financial risk. Please REGISTER: Mail: gutmann.bwl(a)univie.ac.at Phone: +43-1-4277-38186 - Fax: +43-1-4277-38074 Contact and further information: Gutmann Center for Portfolio Management University of Vienna - Mag. Dorothea GRIMM Bruenner Str. 72 - 1210 Wien (Austria) phone: +43-1-4277-38186 - fax: +43-1-4277-38074 mail: gutmann.bwl(a)univie.ac.at - web: www.gutmann-center.at