Behavioral Finance Wintersemester 2023

General Remarks

Relevant information, lecture links and downloads will be made available via Moodle.

Characterizing the Course

Behavioral Finance explains financial phenomena by agents who are bounded rational. It consists of two building blocks: the limits to arbitrage and investor psychology. The aim of this lecture is to give students an overview over the field of behavioral finance. At the end of the semester students should know under which conditions arbitrage does not work, how behavioral patterns guide agents' investment decisions, when herd behavior occurs and what implications bounded rationality has for market outcomes.

Course Contents

  • Informational Efficiency versus Behavioral Finance
  • The Revelation of Private Information Through Trading
  • The Limits to Arbitrage
  • Herd Behavior: Informational Externalities
  • Herd Behavior: Payoff-Externalities and Bank Runs
  • Herd Behavior: Reputational Herding
  • Experimental Evidence on Herding Behavior
  • Investor Psychology


The literature for each session is provided via Moodle.


Dr. Markus Demary from the Cologne Institute for Economic Research.

Organization: Niklas Paluszkiewicz

Dates and Timing

The lecture takes place on...

Friday, 17.11.2023, 10:00 am - 6:00 pm 
Saturday, 18.11.2023, 9:00 am - 12:00 pm

Friday, 12.01.2024, 10:00 am - 6:00 pm
Saturday 13.01.2024, 9:00 am - 12:00 pm

Friday, 26.01.2024, 10:00 am - 6:00 pm
Saturday 27.01.2024, 09:00 am - 12:00 pm

Lectures will take place on Fridays from 10:00 to 12:00 in room N24/101, and will be held in Heho 18 E20 at all other times.


Exam dates: please see Moodle page.


Module description

  • Wiwi (Bsc, MSc, Dipl)
  • WiMa/WiPhy (BSc, MSc, Dipl)
  • Finance (MSc)

and others according to study plan.

Module description