Universität Wien

040291 KU Decision-making under risk and uncertainty (MA) (2025W)

8.00 ECTS (4.00 SWS), SPL 4 - Wirtschaftswissenschaften
Continuous assessment of course work
Moodle
We 03.12. 13:15-14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock

Registration/Deregistration

Note: The time of your registration within the registration period has no effect on the allocation of places (no first come, first served).

Details

max. 50 participants
Language: English

Lecturers

Classes (iCal) - next class is marked with N

  • Wednesday 01.10. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 03.10. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 08.10. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 10.10. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 15.10. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 17.10. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 22.10. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 24.10. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 29.10. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 31.10. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 05.11. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 07.11. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 12.11. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 14.11. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 19.11. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 21.11. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 26.11. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 28.11. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Friday 05.12. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 10.12. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 12.12. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 17.12. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 19.12. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 07.01. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 09.01. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 14.01. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 16.01. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 21.01. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 23.01. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Wednesday 28.01. 13:15 - 14:45 Hörsaal 9 Oskar-Morgenstern-Platz 1 1.Stock
  • Friday 30.01. 11:30 - 13:00 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock

Information

Aims, contents and method of the course

The study of decision-making under risk and uncertainty concerns situations in which agents choose between options without knowing the outcomes with certainty. Examples include investment decisions, portfolio choice, insurance, and corporate or managerial decisions. Since many—if not most—decisions involve some degree of uncertainty, the study of such decisions is both important and well-established in economics.

The aim of this course is to familiarize students with key concepts and models in decision-making under risk and uncertainty, and to explore current topics at the research frontier. Students will learn the basics of decision theory and develop the ability to critically assess recent research. A particular focus will be on behavioral aspects of decision-making and on testing theoretical models using controlled experiments. Students will also have opportunities to practice their presentation and academic writing skills.

The course will be broadly divided into two parts: risk and ambiguity.
• Choices under risk refer to decisions involving known probability distributions (e.g., buying a lottery ticket with a known chance of winning).
• Choices under ambiguity involve unknown probability distributions (e.g., buying a share of Nvidia, where the likelihood of future performance is uncertain).

Each part will begin with lectures covering fundamental concepts and influential models. We will also discuss the experimental method as a tool for testing decision theories. These lectures will be followed by in-depth discussions of recent academic papers.

Decision-Making under Risk
Lectures will cover the basics of Expected Utility Theory, its axiomatic foundations, Prospect Theory, and Rank-Dependent Utility / Cumulative Prospect Theory, along with how these theories have been tested experimentally. The papers we discuss will examine recent developments related to bounded rationality, emotions, salience, and cognitive uncertainty.

Decision-Making under Ambiguity
Lectures will introduce the concept of ambiguity aversion and review models that attempt to explain it. We will also examine experimental evidence on the topic. Topics in the paper discussions include the measurement of ambiguity preferences, source preferences, and empirical tests of different models of ambiguity-sensitive decision-making.

Assessment and permitted materials

Each student will choose one (or more) paper(s) from a list of suggested readings and give a short presentation (15–20 minutes) during one of the sessions. The presentation will summarize the paper and serve as the basis for discussion. Another student will act as a discussant, providing a brief (10-minute) critique of the paper’s strengths and weaknesses, highlighting discussion points and open questions.

A list of readings will be proposed in the first session, where I will also provide an overview of the papers. We will finalize the reading list during that session. It is therefore important to attend the first meeting.

Grading will be discussed in the first lecture but will likely be based on three main components:
1. Presentation and discussion of a paper
2. A midterm exam
3. Participation in class discussions and attendance

Additionally, students have the optional opportunity to write a short research proposal (4–5 pages). This option is recommended if you wish to explore a topic more deeply, for example, as a potential basis for your Master's thesis.

Minimum requirements and assessment criteria

Students who receive a passing grade in components (1)–(3) will pass the course.

Examination topics

See above.

Reading list

The reading list will be finalized during the first session. A recommended accessible textbook is:
Dhami, Sanjit (2016). The Foundations of Behavioral Economic Analysis. Oxford University Press.

Association in the course directory

Last modified: Mo 29.09.2025 18:45