Lecture Notes

Ses # Topics Lecture Notes


Introduction and overview of consumer financial markets

  • Why take this class?
  • Requirements
  • Substantive plan of the course
  • Overview of consumer finance

Lecture 1: Introduction (PDF - 1.2MB)


How people should behave: economic models of household financial behavior

  • Underlying assumptions: diminishing marginal utility, knowledge, optimization, the effects of risk, risk aversion and portfolio choice
  • Central implications: consumption smoothing, CCAPM
  • Financial advising, robo-advising

Lecture 2: Rational model (PDF - 2.1MB)


How people do behave: behavioral biases, financial decisions, and markets

  • Underlying evidence: experiments, biology, psychology, evolution
  • Central assumption: mistakes
  • Regulation vs. competition for rents
  • Profiting from mistakes vs. selling correcting products

Lecture 3: Behavioral models (PDF)


Financial coaching and behavioral economics

Guest lecture: Katy Davis (Managing Director, ideas42)

No notes

Related white paper: The Financial Health Check: Scalable Solutions for Financial Resilience (PDF - 4MB)


Selling personal financial advice

  • Opportunities and challenges for HelloWallet
  • Navigating market forces
  • How to allocate resources to consumer vs. employer markets

Lecture 5: HelloWallet (PDF)


Risk-based pricing in consumer credit: credit cards and regulation

  • Overview of credit card market
  • Market analysis and the failure of Citi “A deal is a deal” campaign
  • Credit market collapses

Lecture 6: Credit card markets (PDF - 1.7MB)


Consumer insurance markets

  • Fundamental problems of customers
  • How households manage risks
  • The insurance problem

Lecture 7: BASIX Insurance (PDF)


Peer to peer lending

  • Overview and origin of the idea
  • Lending Club
  • Federal Securities Laws and implications
  • Evolution of peer-to-peer lending

Lecture 8: Lending Club (PDF)


Securities backed by consumer debts

Guest lecture: Joseph Naggar (Partner, GoldenTree Asset Management)

  • Tour of securitized products and ABS (credit cards, autos, student loans, personal loans, esoteric), CMBS, RMBS, and CLOs
  • The size of the market, the participants, and importance
  • How the market works: creation, distribution, liquidity
  • What happened during the crisis and what the future holds

No notes


Fintech lending in China

Guest lecture: Chen Long (Chief Strategy Officer, Ant Financial (formerly Alipay))

No notes


Fintech: Bitcoin and payment technologies overview and discussion

  • The economics and finance of money and transactions
  • Are cryptocurrencies the future?
  • Blockchain and public ledgers

Lecture 11: Bitcoin and payments (PDF - 2.1MB)

Course Info

As Taught In
Spring 2018
Learning Resource Types
assignment Problem Sets
assignment Written Assignments
notes Lecture Notes