Behavioral Finance

· Wahlpflicht


  • ECTS: 6
  • Course Language: English
  • Requirements: EWF, Microeconomics II, B&F II
  • Recommended Semester: 5th Semester
  • Core Elective Area: ECON2 (Microeconomics), BF1
  • Topics of Interest: Financial Economics, Behavioral Economics
  • Level of Effort per ECTS (appropriate, high, very high): high to very high, depending on your R programming skills.


Brief Summary: 

The subject looks at standard models of finance and its flaws on the empirical level. It tries to explain flaws such as mispricings or sub-optimal investments on the financial markets through biases and behavioral economic models. The illustration of common investor mistakes and biases can be very helpful and interesting also for normal students who are thinking about investing in the financial market. All models are being illustrated on a mathematical level, so expect a good amount of derivation. Problem Sets are due almost every week, where you mainly replicate models discussed in the lecture with R. Some of them are graded, but all of them should be handed in. The TA Sessions give the solutions and answers to questions.

Challenges / Good to know:

The coding aspect of the problem sets is considered to be more difficult than other econ modules. A lot of the coding has to be learned by yourself with little support. A high motivation or a good study group is required.

Pro / Contra

Lecture (Content, Structure, Learning Material):


  • Content of the lecture is very interesting
  • Studies teach practical relevance


  • Heavy in R

Exercise (Relevance to the Lecture / Exam):


  • Lecture and exercise complement each other well


  • Exercises are time intensive

Effort for the exam / Tips

Effort per ECTS: 

Appropriate, exam was fair compared to the lecture material.

Weighting of the Exercises: 

Problem sets account for 30% of the final grade.


  • Exercises
  • Lecture slides

Learning Strategy (Time Management):

Solving the exercises in groups can be useful, in order to help each other understand the material better.

Placement in Curriculum

Which subjects build on this course:


Similar courses:

Behavioral Economics, Behavioral Personnel Economics, Behavioral Macroeconomics 







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