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ECO3021 : Economics of Risk and Uncertainty

  • Offered for Year: 2024/25
  • Module Leader(s): Professor John Sessions
  • Owning School: Newcastle University Business School
  • Teaching Location: Newcastle City Campus

Your programme is made up of credits, the total differs on programme to programme.

Semester 1 Credit Value: 10
ECTS Credits: 5.0
European Credit Transfer System


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
Scheduled Learning And Teaching ActivitiesLecture151:0015:00PIP Lectures
Scheduled Learning And Teaching ActivitiesSmall group teaching31:003:00PIP Seminars
Guided Independent StudyIndependent study182:0082:00Reading, enhancing lecture notes, seminar preparation, revision.
Teaching Rationale And Relationship

Lectures explain the basic economic theory underpinning the economics of risk and uncertainty.
Seminars enhance learning and provide an opportunity for students to monitor their own progress through problem solving and discussions and orally present economic arguments relating to the economics of risk and uncertainty.
Private study provides opportunity for students to monitor their own progress through problem solving and discussions.

Assessment Methods

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

Description Length Semester When Set Percentage Comment
Written Examination1201A100N/A
Formative Assessments

Formative Assessment is an assessment which develops your skills in being assessed, allows for you to receive feedback, and prepares you for being assessed. However, it does not count to your final mark.

Description Semester When Set Comment
Prob solv exercises2MSeminar questions provided
Assessment Rationale And Relationship

The written exercise at the end of Semester 1 is designed to encourage study and to test student understanding of the fundamental theoretical and empirical underpinnings of selected topics within the economics of risk and uncertainty

In the case of an alternative assessment for semester 1 (100% of the module mark) being necessary due to circumstances, the Module Leader will in discussion with the DPD and the University, discuss possible acceptable online alternatives, such as a take home exam delivered online with a set time limit to complete (24 hours or less as deemed appropriate).

Reading Lists