Financial Crime World

Behavioral Finance Electives

The Luxembourg School of Finance offers three electives in Behavioral Finance as part of its Master’s program in Financial Engineering (MScFE). These courses aim to provide students with a deeper understanding of the human behavior that drives financial decisions and how it impacts the financial markets.

Course Units

Handbook of the Economics of Finance

This course unit explores the foundations of behavioral economic analysis, introducing students to the latest research on household wealth and inequality. Students will learn how households use financial instruments to attain their objectives and develop critical thinking skills to assess the individual and social benefits of important financial products accessible to consumers.

  • Key topics:
    • Behavioral economic analysis
    • Household wealth and inequality
    • Financial instruments and decision-making

Financial Engineering

In this course, students will gain proficiency in probability and statistics, calculus, programming, and apply these tools to model markets and drive decision-making. They will learn how to design and implement complex financial models that allow financial firms to price and trade securities, as well as understand the current academic and practitioner literature on financial engineering.

  • Key topics:
    • Probability and statistics
    • Calculus
    • Programming (e.g., Python)
    • Financial modeling and market valuation

Risk Management and Asset Allocation

This course focuses on risk management in a banking context, introducing students to credit risk, asset classes, and securitization. They will learn how to manage commercial relationships with corporate clients and explore alternative liquid investments, including private equity, real estate, and private debt.

  • Key topics:
    • Risk management in banking
    • Credit risk and asset classes
    • Securitization and commercial relationships

Assessment

Each course unit will be assessed through a combination of:

  • Written exams
  • Presentations
  • Research papers

Students will have the opportunity to apply theoretical concepts to real-world scenarios and develop practical skills in data analysis, financial modeling, and market valuation.

For further reading, students are encouraged to consult the following texts:

  • Dhami, Sanjit (2016) - “Foundations of Behavioral Economic Analysis”
  • Gigerenzer, G., & Selten, R. (2002) - “Bounded Rationality: The Adaptive Toolbox”
  • Kahneman, D., & Tversky, A. (1979) - “Prospect Theory: An Analysis of Decision under Risk”

Professors

The courses will be taught by experienced professors from the Luxembourg School of Finance, including:

  • Olivier Marcy
  • Edoardo Ancora
  • Nicolas Deldime

Course Schedule

The course schedule is as follows:

  • Handbook of the Economics of Finance - Spring semester
  • Financial Engineering - Fall semester
  • Risk Management and Asset Allocation - Spring semester

For more information on these electives, please contact the Luxembourg School of Finance at [insert email address].