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Behavior under Risk and Uncertainty *

Name of module: Behavior under Risk and Uncertainty *

Exam number: 6512

Semester/Trimester: Semester

Duration of the module: Ein Semester

Form of the module (i.e. obligatory, elective course): Wahlpflicht

Frequency of module offer: Summer semester 2011

Prerequisites: Limited number of participants (36). Please register by email (bolle@europa-uni.de) prior to April 4, 2011. Date and time of the inaugural meeting will be published on the chair's homepage. Knowledge in Microeconomics and Mathematics.

Applicability of module for other modules and study programmes:
Serviceveranstaltung für Masterstudierende der Kultur- bzw. Rechtswissenschaften.

Person responsible for module: Prof. Dr. Friedel Bolle

Name of the professor: Prof. Dr. Friedel Bolle, Dr. Yves Breitmoser

Language of teaching: Englisch

ECTS-Credits (based on the workload): 6 (E-Modul)

Workload and its composition (self-study, contact time):
Kontaktzeit (Vorlesung, Übung,Seminar etc.) 37,5 Std.; Selbststudium: 142,5 Std.

Contact hours (per week in semester): 3

Methods and duration of examination:
Term paper and presentation.

Emphasis of the grade for the final grade: 1/29

Aim of the module (expected learning outcomes and competencies to be acquired):
The seminar discusses two building blocks of microeconomic and game-theoretic modeling: functional form of utility and plausibility of utility maximization under incomplete information. We distinguish risk and uncertainty and start by discussing the respective theories of expected utility. We continue by looking at the results of psychological and economic experiments, which indicate that subjects deviate systematically from maximizing expected utility, and conclude by discussing appropriately generalized theories of behavior under risk and uncertainty.

Contents of the module:
Expected utility under risk, expected utility under uncertainty, rand dependent preferences, reference dependent preferences, prospect theory under risk, prospect theory under uncertainty, ambiguity aversion.

Teaching and learning methods:
Following some introductory remarks of the lecturers, term papers will be presented and discussed.

Literature (compulsory reading, recommended literature):
Peter P. Wakker, Prospect Theory: For Risk and Ambiguity, 2010, Cambridge University Press.

Further information:
Registration in Moodle required.
Chair's web page