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ECO3021 : Economics of Risk and Uncertainty

  • Offered for Year: 2020/21
  • Module Leader(s): Professor John Sessions
  • Owning School: Newcastle University Business School
  • Teaching Location: Newcastle City Campus
Semester 2 Credit Value: 10
ECTS Credits: 5.0


To develop students' understanding of how individual decisions are made in the presence of risk and
uncertainty, with applications to especially financial decisions but also to other decisions where risk and uncertainty are present.

Outline Of Syllabus

The course begins with the development of the basic theories of choice under uncertainty, such as Expected Utility Theory and Project Theory, as well as the prescriptive and descriptive effectiveness of such theories. Application of the basic theory to financial decision making is the considered. The course then moves on to a detailed study of the interaction of real markets and financial markets. The role of financial markets in allocating risk, how financial assets are priced and the role of expectation are issues addressed in the course.

Teaching Methods

Teaching Activities
Category Activity Number Length Student Hours Comment
Guided Independent StudyAssessment preparation and completion132:0032:00N/A
Scheduled Learning And Teaching ActivitiesLecture72:0014:00N/A
Guided Independent StudyDirected research and reading125:0025:00N/A
Scheduled Learning And Teaching ActivitiesSmall group teaching41:004:00N/A
Guided Independent StudyIndependent study125:0025:00N/A
Teaching Rationale And Relationship

1. Lectures develop the course material focusing on theoretical issues.
2. Seminars develop a specific topic through an in-class experiment.
3. Workshops will focus on solving analytical problems to reinforce the material introduced in lectures.

Assessment Methods

The format of resits will be determined by the Board of Examiners

Description Length Semester When Set Percentage Comment
Written Examination1202A100N/A
Formative Assessments
Description Semester When Set Comment
Prob solv exercises2MSeminar questions provided
Assessment Rationale And Relationship

Unseen exam is designed to test study across a broad range of subject areas.

Reading Lists