Economics: Behavioural Economics and Finance
Course · 7.5 credits
Description
A fundamental component in most economic analysis is a description of how individuals make decisions. The objective of the course is to introduce students to the study of economic and financial decision making. This will be done in two parts. First, we will review classical theories of rational economic and financial decision making and confront these theories with empirical evidence. Second, we will discuss alternative, more psychologically grounded, theories from behavioural economics that can better accommodate the empirical evidence.
The first part of this course will discuss how rational people should make simple decisions and form empirical judgments. This part also discusses the systematic ways in which real human beings deviate from these models in practice. A notable part of this discussion will focus on heuristics (simple decision rules) and the biases that result from relying on them. We will also cover mental accounting and more recent behavioral economic theories, as well as relevant empirical evidence.
The second part of this course will instead focus on decisions under risk and uncertainty. How should rational economic agents behave when facing risk or uncertain environments? How do they behave in practice? And what alternative models have behavioral economists developed to better explain the existing evidence? Large sections of this part will be about the rational benchmark of expected utility theory and the behavioural alternative of prospect theory, though we will discuss some other alternative models as well.
The last part of the course is devoted to the study of inter-temporal decision making. The course will cover the standard economic model based on exponential discounting, which assumes that behaviour is time-consistent. However, there is empirical evidence that people sometimes behave in a time-inconsistent manner, postponing activities with immediate costs and being too eager on performing actions with immediate rewards. The course will review this evidence and discuss extensions of the standard model that can account for these phenomena.
Throughout the course, the theoretical discussions of decision making will be complemented with numerous economic and financial applications illustrating the underlying ideas and showing how they can be used in economic analysis.
Course documents
Closed for applications
Application opportunitiesContact
Department of Economics
Visiting address
Tycho Brahes väg 1, 223 63 Lund
Postal address
Box 7080, 220 07 Lund
+46 46 222 00 00
Mårten Wallette
Study advisor
+46 46 222 86 75
marten [dot] wallette [at] nek [dot] lu [dot] se
Requirements and selection
Entry requirements
Students admitted to the Master programme in Economics and who have taken a course in intermediate microeconomic analysis are qualified for this course. For other students at least 90 ECTS-credits in economics at the undergraduate level are needed for admission to all master courses in economics. To be admitted to this particular course these credits must include a course in intermediate microeconomic analysis (e.g. NEKG21).
Selection criteria
English language requirements
Most of Lund University’s programmes require English Level 6 (unless otherwise stated under 'Entry requirements'). This is the equivalent of an overall IELTS score of 6.5 or a TOEFL score of 90. There are several ways to prove your English language proficiency – check which proof is accepted at the University Admissions in Sweden website. All students must prove they meet English language requirements by the document deadline, in order to be considered for admission.
How to prove your English proficiency – universityadmissions.se
Country-specific requirements
Check if there are any country-specific eligibility rules for you to study Bachelor's or Master's studies in Sweden:
Country-specific requirements for Bachelor's studies – universityadmissions.se
Country-specific requirements for Master's studies – universityadmissions.se
Apply
Start Autumn Semester 2025
Day-time Lund, part time 50%
In English
Study period
3 November 2025 - 18 January 2026
Application
You can only apply for this course in the 'Swedish student' application round. Find out more: Applying for studies – when to apply
How to apply
Lund University uses a national application system run by University Admissions in Sweden. It is only possible to apply during the application periods.
Step 1: Apply online
- Check that you meet the entry requirements of the programme or course you are interested in (refer to the section above on this webpage).
- Start your application – go to the University Admissions in Sweden website where you create an account and select programmes/courses during the application period.
Visit the University Admissions in Sweden website - Rank your programme/course choices in order of preference and submit them before the application deadline.
Step 2: Submit documents
- Read about how to document your eligibility and how to submit your documents at the University Admissions in Sweden website. Follow any country-specific document rules for Master's studies or Bachelor's studies
Country-specific requirements for Bachelor's studies – universityadmissions.se
Country-specific requirements for Master's studies – universityadmissions.se
- Get all your documents ready:
- official transcripts and high school diploma (Bachelor's applicants)
- official transcripts and degree certificate or proof that you are in the final year of your Bachelor's (Master's applicants)
- passport/ID (all applicants) and
- proof of English proficiency (all applicants).
- Prepare programme-specific documents if stated in the next paragraph on this webpage.
- Upload or send all required documents to University Admissions before the document deadline.
- Pay the application fee (if applicable – refer to the section below on this webpage) before the document deadline.
* Note that the process is different if you are applying as an exchange student or as a part of a cooperation programme (such as Erasmus+).
* If you have studied your entire Bachelor's programme in Sweden and all of your academic credits are in Ladok, you do not have to submit transcripts or your diploma when applying for a Master's programme. However, there may still be other documents you need to submit! See the link below.
* Svensk student?
Läs instruktionerna om att söka till ett internationellt masterprogram på lu.se
Tuition fees
Non-EU/EEA citizens
Full programme/course tuition fee: SEK 16 875
First payment: SEK 16 875
Citizens of a country outside of the European Union (EU), the European Economic Area (EEA) and Switzerland are required to pay tuition fees. You pay one instalment of the tuition fee in advance of each semester.
Tuition fees, payments and exemptions
EU/EEA citizens and Switzerland
There are no tuition fees for citizens of the European Union (EU), the European Economic Area (EEA) and Switzerland.
Application fee
If you are required to pay tuition fees, you are generally also required to pay an application fee of SEK 900 when you apply at the University Admissions in Sweden website. You pay one application fee regardless of how many programmes or courses you apply to.
- Paying your application fee – universityadmissions.se
- Exemptions from paying the application fee – universityadmissions.se
- Convert currency – xe.com
*Note that there are no tuition or application fees for exchange students or doctoral/PhD students, regardless of their nationality.
Scholarships & funding
Lund University Global Scholarship programme
The Lund University Global Scholarship programme is a merit-based and selective scholarship targeted at top academic students from countries outside the EU/EEA.
Lund University Global Scholarship
Within the framework of the Lund University Global Scholarship programme, the University also offers the African Research Universities Alliance (ARUA) Scholarship targeted at top academic students from selected African research universities.
Swedish Institute Scholarships
The Swedish Institute offers scholarships to international students applying for studies in Sweden at Master's level.
Scholarship information on the Swedish Institute website
Country-specific scholarships and funding options
Lund University has agreements with scholarship organisations and funding bodies in different countries, which may allow applicants to apply for funding or scholarships in their home countries for their studies at Lund University.