Argumentation in Finance

Financial communication activities are permeated by arguments. Managers, IR officers, institutional  investors, analysts and  financial journalists, market regulators and other actors are constantly engaged in strategic discussions regarding a firm’s quarterly performance, the evaluation of an investment opportunity, the credibility of a financial advice or the merits of a trust-destroying accusation. 

All key financial activities and professions involve participating in complex discussions with sound, persuasive and situationally appropriate arguments. Moving from this observation, the course explores the domain of strategic financial communication from the perspective of argumentation studies, addressing the following questions:

• How do actors and institutions in the financial markets strategically construct arguments to support their investment case and favour trust?
• What makes these arguments (in)effective?
• How can these arguments be critically analysed and evaluated?
• How can argumentation support the design of communication strategies that are at the same time persuasive and reasonable and  support sustainable (long-term) trust among market participants?

The course will examine the strategic importance of argumentation in key contexts  of financial communication, including various types of stock market communications (with special attention to quarterly earnings calls), fundraising activities by start-ups and private equity firms, and the complex communications of ownership impacting transactions such as takeovers or spin-offs.  

Students will learn

• To support an investment case with effective and sound arguments through a group-based role playing simulation of a start-up pitch to a venture capital investor.
• To conduct a case study of strategic communication in the financial markets, involving a public controversy (including discussions shareholders' proposals, activist investor campaigns, negative surprise and underperformance, reputational issues, shortseller campaigns and hostile takeovers) evaluating the cogency and persuasive effectiveness of the arguments and drawing practical lessons for corporate IRs as well as for investors.   
• To visualize the structure of arguments for analysing persuasive messages, for exploring controversial issues and recording the output of problem-solving and discussions.
• To use a modern version of the method of the “common topics” (Argumentum Model of Topics, AMT) to discover issue-relevant arguments in the context of investment decisions, to reconstruct implicit reasoning and evaluate the soundness of arguments in context.  

In presence

The course includes lectures, discussions of case studies, argumentation analysis exercises, a group activity involving the role playing simulation of a start-up pitch, and an individual case study.

Regular attendance (at least 75% of the course) is highly recommended as the course gradually builds on previously introduced concepts and methods. Classes also include hands-on exercises that will be included in the exam. Attendance to in-course evaluated activities is mandatory.

To map arguments, an argument visualization software for collaborative analysis (OVA) will be employed: http://ova3.arg.tech/

40% of the grade will be assigned during the course:

• Start-up pitch (20%). The activity requires the full in-person participation of each member to the activity to obtain the group score.
• Intermediate written test (20%). The test is held during class hours and it will not be possible to repeat the test during exam sessions.

Oral exam (60%). The rest of the grade will be based on a final oral exam consisting of an oral presentation of the case study, followed by questions on the concepts and methods employed.

A detailed syllabus and reading list will be made available via the iCorsi platform at the start of the course.