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Decision Theory (VT IFS)

Decision Theory (VT IFS)

Project Description
Decision Theory:

  • Expected utility theory
  • Mean-variance theory
  • Prospect theory
  • Non-cooperative game theory
  • Asymmetric information
  • Market efficiency
  • Behavioral biases
Teaching Method
Lecture with interactive elements, group work, presentation
Learning Outcomes The students...
Professional Competence
  • 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
Methodological Competence
  • 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
Social Competence
  • 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.
Personal Competence
  • 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
Assessment Methods
  • written exam 70%
  • presentation 30%
Module number:
6210876
Courses:
28 L / 21 h
Self-study:
69 h
Scheduled Semester:
5