Modulhandbuch (Module manual)

M.184.4219 Advanced Behavioral Finance
(Advanced Behavioral Finance)
Koordinator (coordinator): Prof. Dr. Matthias Pelster
Ansprechpartner (contact): Prof. Dr. Matthias Pelster (matthias.pelster[at]
Credits: 10 ECTS
Workload: 0
Semesterturnus (semester cycle): WS
Studiensemester (study semester): 1-4
Dauer in Semestern (duration in semesters): 1
Lehrveranstaltungen (courses):
Nummer / Name
(number / title)
(contact time)
Status (P/WP)
(group size)
a) K.184.42191 / Advanced Behavioral Finance Vorlesung / Übung P 50 TN (PART)
Wahlmöglichkeiten innerhalb des Moduls (Options within the module):
Empfohlene Voraussetzungen (prerequisites):

​Interest in financial issues and basic econometric understanding

Inhalte (short description):

The purpose of this course is to provide advanced insights into selected areas of behavioral finance including corporate finance, individual investor behavior, and (empirical) asset pricing. We will discuss important papers in these areas with a focus on methodological issues, such as conducting experiments, running surveys, and analyzing big data sets. The course includes a practical part in which students replicate selected empirical findings. The course enables students to plan and carry out empirical and experimental research in behavioral finance on their own and prepares for an empirical thesis in this area of finance.

Corporate finance studies the financial decisions of companies and extensively deals with agency problems that arise from the separation of ownership and control between shareholders and managers. Studying the behavior and expectations of shareholders and managers helps us understand the corporate financial decisions. One approach of behavioral corporate finance assumes that investors are less than fully rational, but managers remain rational. Using this assumption, we study the implications of the irrational investors approach in the context of mergers and acquisitions. The second approach assumes that managerial behavior is less than fully rational. Using this assumption, we study the implications for corporate investments and capital structure.

In the investments section, we study, amongst other things, the effects of media coverage and social interactions on investment decisions. We will also study financial bubbles. Financial bubbles can be defined as prolonged periods of rising prices to levels inconsistent with fundamental (realistic) economic assessments. The rising prices are subsequently followed by sharp declines, sometimes even price crashes. Studying bubbles requires irrationality at least among a subset of investors who are riding the bubble. During the course, we analyze the conditions that create bubbles in experimental settings and study recent financial bubbles such as the dot-com bubble or the bitcoin bubble.

Lernergebnisse (learning outcomes):
Fachkompetenz Wissen (professional expertise):
  • Students have knowledge of and insight into the recent and rapidly expanding literature on behavioral finance.
  • Students have understanding of how behavioral finance differs from traditional financial theory.
  • Students have knowledge of and insight into the effects of psychological biases on financial decision making.
  • Fachkompetenz Fertigkeit (practical professional and academic skills):
  • Students are able to plan and carry out empirical and experimental research in behavioral finance on their own.
  • Personale Kompetenz / Sozial (individual competences / social skills):
  • Students can develop their communication, cooperation and teamwork skills in small working groups.
  • Students can develop their presentation skills.
  • Personale Kompetenz / Selbstständigkeit (individual competences / ability to perform autonomously):
  • Students have the ability to act independently and responsibly.
  • Students are able to independently apply, reflect and further develop the acquired basics and methods.
  • Students have the ability to create and conduct presentations.
  • Prüfungsleistungen (examinations)
    Art der Modulprüfung (type of modul examination): Modulteilprüfungen
    Art der Prüfung
    (type of examination)
    a) Präsentation 25 min 50.00 %
    b) Klausur 60 min 50.00 %
    Studienleistung / qualifizierte Teilnahme (module participation requirements)
    Voraussetzungen für die Teilnahme an Prüfungen (formal requirements for participating in examinations)
    Voraussetzungen für die Vergabe von Credits (formal requirements for granting credit points)
    Die Vergabe der Credits erfolgt, wenn die Modulnote mindestens „ausreichend“ ist
    Gewichtung für Gesamtnote (calculation of overall grade)
    Das Modul wird mit der Anzahl seiner Credits gewichtet (Faktor: 1)
    Verwendung des Moduls in den Studiengängen (The module can be selected in the following degree programmes)
    M.Sc. International Business Studies, M.Sc. Betriebswirtschaftslehre, M.Sc. International Economics and Management, M.Sc. Management Information Systems, M.Sc. Wirtschaftsinformatik, M.Sc. Wirtschaftspädagogik, M.Ed. Wirtschaftspädagogik
    M.Sc. Taxation, Accounting and Finance
    Umfang QT (participation requirements):

    Lernmaterialien, Literaturangaben (learning material, literature):
    Sonstige Hinweise (additional information):

    Zu Beginn des Semesters werden ausgewählte Forschungspapiere zur Vorbereitung für Präsentationen an die Studierenden ausgegeben. Präsentationen finden in der zweiten Semesterhälfte statt. Studierende können die Forschungspapiere in Kleingruppen präsentieren.

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