Behavioural Economics and Finance module (BU31018)

​​Behavioural Economics is a critical and rapidly evolving field that investigates the limitations of traditional economic assumptions. In this module, you will analyze the core models of behavioural economics, comparing their predictions against standard "rational actor" theories to understand why economic outcomes often deviate from traditional expectations. You will examine how these models integrate realistic human constraints into formal economic analysis. 

​After establishing these foundations, you will apply these behavioural frameworks to the specific context of financial markets. You will learn how to "borrow" concepts from behavioural economics to explain well-known anomalies in finance that traditional theories fail to account for. Through the study of decision-making under risk and behavioural econometrics, you will develop the ability to interpret empirical evidence and identify the specific biases that influence real-world financial phenomena.

​What you will learn 

​In this module, you will: 

• ​Analyse the main predictions of behavioural economics models and compare them with standard economic theory. 
• ​Explore the technical applications of behavioural econometrics and decision-making under risk. 
• ​Investigate how behavioural models explain systemic anomalies in financial decision-making. 
• ​Develop skills in assessing economic problems through logical analysis and formal reasoning. 

​By the end of this module, you will be able to: 

• ​Contrast the predictions of behavioural models with standard economic theories. 
• ​Identify the specific biases affecting decision-making and interpret their relevance to financial market phenomena. 
• ​Implement statistical techniques to estimate risk preference parameters and identify suitable economic models for observed data patterns. 
• ​Interpret empirical evidence on behavioural economics and explain its real-world relevance 
• ​Communicate formal economic reasoning and logical analysis through concise statements and reports.​

Assignments / assessments

​​Coursework (40%) 

• ​Assesses technical and conceptual understanding of behavioural economics 

​Written exam (60%) 

• ​Two-hour examination 
• ​Includes essay-based and technical questions covering all learning outcomes​

Teaching methods / timetable

• ​​Weekly lectures 
• ​IT suite sessions 
• ​Tutorials with problem-solving exercises and discussion 

​Regular office hours are available with lecturers and tutors for additional support and guidance.​