3403719: Behavioral finance and technical analysis

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Semester:WS 12/13
Scheduled in semester:1
Semester Hours per Week / Contact Hours:18.0 L / 13.5 h
Self-directed study time:31.5 h

Module coordination/Lecturers


Master's degree programme in Banking and Financial Management (01.10.2008)


  • Critique of the Expected Utility Theory
  • Prospect Theory
  • Kinds and Consequences of Heuristic Distortion
  • Framing
  • Momentum and Contrarian Strategies
  • Technical Indicators
  • Technical Analysis

Learning Outcomes

  • Critically scrutinising decision theory fundamentals in finance
  • Considering psychological aspects in investment decisions
  • Explaining momentum und rebound strategies
  • Defining technical indicators
  • Evaluating and applying technical analysis instruments


Lectures Method

Interactive lecture with exercises


Required reading:

  • Brown, L.D. (1993). Earnings Forecasting Research: its implications for Capital Markets Research. International Journal of Forecasting, Vol 9, pp. 295-320.
  • De Bondt, W.F. M. /Thaler, R.H. (1990). Do Security Analysts Overreact? American Economic Review, American Economic Association, Vol 80 (2), pp. 52-57.
  • De Bondt, W.F.M. /Forbes, W.H. (1999). Herding in Analysts Earnings Forecasts. In: European Financial Management, Vol. 5, pp. 143-163.
  • Kahnemann, D. /Tverky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. In Econometrica. Vol. 47. No. 2. pp. 263-292.
  • Odean, T. (1998). Are Investors Reluctant to Realize Their Losses? Journal of Finance. American Finance Association. Vol. 53 (5). pp. 1775-1798.


Lecture slides, exercises, sample questions will be available on Moodle

Exam Modalities

  • Written examination with 120 minutes editing time (30 minutes dedicated to knowledge acquired during this lecture)


30.11.201209:00 - 16:30H4
20.12.201209:00 - 16:30S1