Minor Deepening Minor: Behavioural Finance

Deepening minor
Minor code


The minor in behavioural finance combines finance with the psychology behind human decision making. After a general introduction about financial decision making and biases, we study the real-life effects of psychological biases in two specific situations. First, we consider corporate decision making. That is, how do managers behave to maximize the value of the firm? Second, we look into the behavior of investors. To be more specific, how are asset prices and investment decisions affected by psychological factors? The topics are supported by guest lectures from leading practitioners and academics.

Learning objectives

The goal of this minor is to provide a basic understanding of the main issues in behavioural finance, showing how and why it deviates from traditional finance. It first provides an introduction into the systematic mistakes (biases) that lead to deviations from rationality in human decision making. Subsequently, we use these insights to study the many phenomena in the field of corporate finance and investments that are not well understood by traditional finance.

Special aspects

On average, students have 8 lecture hours per week, typically in the afternoon. Successful participation in this minor requires a significant ability to deal with abstract concepts, much like in mathematics.

Overview modules

Module 1: Financial decision making and biases

  • Content: Traditional theories in the field of finance are mostly based on the notion that investors and managers are rational. Research over the past decades, however, has shown that their actual behaviour systematically deviates from rational norms. This module on Financial Decision Making and Biases provides an introduction to the bounded rationality of individuals when they make financial decisions. We will discuss the Nobel-prize winning Prospect Theory that describes how people make choices that involve risks, and examine the most prominent evidence from psychology on biases that arise in individual decision making, such as when assessing the likelihood of events.
  • Teaching method: Plenary lectures.
  • Teaching materials: We will provide a reader with selected articles for all modules. In addition, students are to download material themselves.
  • Contact hours: 24 (3 weeks, 4 x 2 hours per week).

Module 2: Behavioural corporate finance

  • Content: The module on Behavioural Corporate Finance starts out with the basic concept of value creation: what is it, how can it be measured, and why is it important? From this framework, the module turns to the question of how management can try to improve (create) company value, and which behavioural (and other) factors prevent managers from achieving the firm’s full valuation potential. This process will be illustrated by numerous real-life examples.
  • Teaching method: Plenary lectures.
  • Teaching materials: We will provide an overview of the relevant articles; these can all be downloaded from the library.
  • Contact hours: 16 (2 weeks, 4 x 2 hours per week).

Module 3: Behavioural investments

  • Content: The module on Behavioural Investments applies the concepts from the first module to the area of investments. The module consists of two parts. In the first part, we discuss the so-called market anomalies. The examples where the market is not fully efficient can provide a direct investment opportunity. The second part discusses the typical biases in buy- and sell-decisions by individuals. We look at expectations of investors and their subsequent decisions. Recognizing biases in your own behaviour can lead to better investment decisions in the future.
  • Teaching method: Plenary lectures.
  • Teaching materials: We will provide an overview of the relevant articles; these can all be downloaded from the library.
  • Contact hours: 16 (2 weeks, 4 x 2 hours per week).

Overview content per week

Week 1-2: Financial Decision Making and Biases
Week 3: Team Assignments
Week 4-5: Behavioral Corporate Finance
Week 6-7: Behavioral Investments
Week 8: Exam


Method of examination
There is a mandatory team assignment at the end of the first module, and a final exam at the end of the minor. The team assignments provide a 20% part of the grading. The 80% part is the written (re-)exam with multiple-choice as well as open questions.

Composition final grade 
The final grade for the minor is the grade for the team assignment (20%) and  the grade for the (re-)exam (80%). There is an option to resit the exam in the summer period.

Students are given the possibility to review their exam after getting their grades.

Contact information

Nico van der Sar
+31 10 408 1290
room: H14-11 

Faculty website

Deepening minor
Minor code
Erasmus School of Economics
Study points (ECTS)
Instruction language
Campus Woudestein, Rotterdam


Please read the application procedure for more information.