5610876: C21_Decision Theory (VT IFS)

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Semester:WS 23/24
Scheduled in semester:5
Semester Hours per Week / Contact Hours:28.0 L / 21.0 h
Self-directed study time:69.0 h

Module coordination/Lecturers


Bachelor's degree programme in Business Administration (01.09.2021)


Decision Theory:

  • Expected utility theory
  • Mean-variance theory
  • Prospect theory
  • Non-cooperative game theory
  • Asymmetric information
  • Market efficiency
  • Behavioral biases


    • know the most prominent decision theories
    • understand how rational solutions may be achieved by using classical decision models
    • understand the differences between decision under certainty, risk and ignorance
    • know different levels of market efficiency and their implications
    • understand how information is processed on financial markets
    • solve decision problems by using DT models and methods.
    • find the strategic aspect of a problem and transform it into a simplified problem.
    • can explain non-cooperative game theory
    • analyze decision situations.
    • evaluate Investments with EUT, MV and PT, explain and interpret the assumptions of these
    • know methods in decision theory
    • know key concepts of experimental research approaches to test market and trader behavior
    • use methods and models on unknown decision situations.
    • calculate optimal solutions and equilibria
    • compare different methods for measuring and controlling risk and uncertainty in decision processes
    • evaluate decision methods in mini cases and find appropriate models for solving typical problems
    • are able to identify Nash Equilibria in simple Prisoner's Dilemma settings
    • pitch solutions to fellow students
    • argue in favor of and against candidate solutions
    • defend their stance in discussions
    • understand and critically discuss the arguments of fellow students.
    • repeat the contents of lectures and exercises in a self-organized way
    • assess their own learning progress during lectures
    • identify their own strengths and weaknesses
    • tolerate different opinions and working styles
    • listen carefully, read and repeat, practice until they understand the logic and mathematics behind models
    • work together and motivate other students who tend to give up as a reaction to the difficulty

Lectures Method

Lecture with interactive elements, group work, presentation


  • Peterson, M.: An Introduction to Decision Theory (most recent edition). Cambridge University Press.
  • Allingham, M.: Choice theory: A very short introduction (most recent edition). Oxford University Press.
  • Hens, T. & Rieger M. O.: Financial Economics: A Concise Introduction to Classical and Behavioral Finance (most recent edition). Springer.

Exam Modalities

  • written exam 70%
  • presentation 30%


13.09.202311:45 - 13:15H5 (Fabrikweg)
20.09.202311:45 - 13:15H5 (Fabrikweg)
27.09.202311:45 - 13:15H5 (Fabrikweg)
04.10.202311:45 - 13:15H5 (Fabrikweg)
11.10.202311:45 - 13:15H5 (Fabrikweg)
18.10.202311:45 - 13:15H5 (Fabrikweg)
25.10.202311:45 - 13:15H5 (Fabrikweg)
08.11.202311:45 - 13:15H5 (Fabrikweg)
15.11.202311:45 - 13:15H5 (Fabrikweg)
22.11.202311:45 - 13:15H5 (Fabrikweg)
29.11.202311:45 - 13:15S10 (Fabrikweg)
06.12.202311:45 - 13:15H5 (Fabrikweg)
13.12.202311:45 - 13:15H5 (Fabrikweg)
20.12.202311:45 - 13:15H5 (Fabrikweg)


  • PWW-BA-21_Decision Theory (VT IFS) (WS 23/24, bewertet)