Risk and Entrepreneurship (VWL-MiFi-RiEn) - IfW (030220) [Import]- Lecturer
- Prof. Aoife Hanley, Ph.D.
- Details
- Lecture, 2 cred.h, ECTS studies, ECTS credits: 5
suitable for ERASMUS-/exchange students, language of lecture is English, Klausur am Ende des Semesters
Time and place: Tue 8:15 - 9:45, CAP2 - Hörsaal A (excluding Tue 1.7.2025); single appointment on 1.7.2025 8:15 - 9:45, OHP2 - Otto-Hahn-Hörsaal
from 13.4.2025 to 13.7.2025
1st examination date (exam at the end of the lecture period): 25.7.2025, 16:00 - 18:00 Uhr, room OS40 - Norbert-Gansel-Hörsaal
2nd examination date (exam at the start of next semester's lecture period): 17.10.2025, 16:00 - 18:00 Uhr, room OS40 - Norbert-Gansel-Hörsaal
Comments on time and place: Please check OLAT for up to date information about the lecture delivery (online or in person)
- Prerequisites / Organisational information
- Module Code: VWL-MiFi-RiEn
Module Number: 320700
Exam Number: 16310
Section in the curriculum of Bachelor Volkswirtschaftslehre (FPO 2021): Wahlpflichtbereich Volkswirtschaftslehre - Mikroökonomik und Finanzwissenschaften (MiFi)
Exam type according to FPO: Module Exam (Modulprüfung)
Specific exam type in summer term 2025: in presence
Further Information: See OLAT
The number of ECTS Credits as well as the admission to the examination for this module is determined by the information regarding this module in the FPO (Examination Regulations) of your program. If this module is not explicitly listed in your FPO, please check at the beginning of the semester about admission options. An overview for all programs which can choose modules of the Institute of Economics can also be found here: Nebenfach Volkswirtschaftslehre – Handbuch für Exportmodule (Minor in Economics - Handbook of Export Modules). You can also check in advance in QIS whether you can find this module listed there in the overview for exam registration, with the exam number mentioned in UNIVIS. Registration to the exam is only possible during the registration period. If you still have questions after reviewing these documents, please contact your student advisor (Studienfachberater).
- Contents
- Das Tutorial wird...
1. in 3 Gruppen aufgeteilt.
2. Tutorial wird ab Mitte Mai am Kiel Institut stattfinden
3. Jeder Gruppe bekommt 2 Tutorials = 6 Tutorials
4. Infos zu den Tutorials sind im OLAT zu erhalten. Und werden in der Vorlesung kundgegeben.
For Introduction, see Lecture 1 on OLAT website (podcast)
Course content
The students learn how individuals take decisions under uncertainty. We use standard models from decision theory (e.g. Expected Utility Theory). We also apply more recent experimental evidence to reveal how these models can break down, when attempting to describe real behaviour such as framing and loss aversion.
But, entrepreneurs are individuals too. The risk of entrepreneurs failing is especially high, as students learn from various studies on firm failure. Additionally, investment decisions such as R&D spending, is also surrounded by uncertainty. We learn how entrepreneurs carve out markets for themselves, where risk of failure is lowest.
Other agents, such as banks, also have a role to play. Students learn how these agents seek to reduce their risk exposures through credit scoring.
1. Theory of choice under uncertainty
- The von Neumann-Morgenstern (NM) Model
- Spreading risk: diversification scenario
- Entrepreneurs: risk loving?
- Exercises
2. Criticisms of the NM Model
- Allais and Ellsberg paradoxes
- Framing, Heuristics
- Application: Deal or No Deal experiments
- Exercises
3. Market Entry
- Motivations for entrepreneurship (endogenous entrepreneurship, DNA, biased profit expectations)
- Empirical evidence for different models
4. Firm survival risk
- Hazard survival model
- Factors affecting survival
- Exercises: Cataloging most important aspects of business survival/failure from Munich Foundation Survey (Brüderl et al, ASR)
5. Enterprise credit and risk
- Theory of credit rationing
- Are start-ups debt rationed?
- Credit scoring
- Recommended literature
- Topic 1
- Frank, R, Microeconomics and Behavior, International Edition, Irwin, McGraw Hill
Topic 2
- Post, T et al., 2009, 'Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show ', American Economic Review, Vol. 98, No. 1, March 2008
Topic 3
- Evans, D. and L. Leighton, 1989, Some empirical aspects of entrepreneurship',
- American Economic Review, v79, pp.519-535
- Parker, S., 1996, 'A Time Series Model of Self-employment under Uncertainty', Economica, New Series, v63, nn 251 , pp. 459-475
- Blanchflower, D. and A. Oswald, 1998, 'What Makes an Entrepreneur? ', Journal of Labor Economics, 1998, vol. 16, no. 1
- Arabsheibania, G., D. de Meza, J. Maloney and B. Pearson, 2000, 'And a vision appeared unto them of a great profit: evidence of self-deception among the self-employed', Economics Letters, v67, n1, pp. 35-41
Topic 4
- Agarwal, R. and D. Audretsch, D. (2001), 'Does entry size matter? The impact of the life cycle and technology on firm survival', The Journal of Industrial Economics, v49 pp.21-43.
- Audretsch, D., 1991, 'New firm survival and the technological regime', Review of Economics and Statistics, 73, 441-450
- Mata, Jose & Portugal, Pedro, 1994. 'Life Duration of New Firms', Journal of Industrial Economics, v2(3), pp227-45
Topic 5
- Greenbaum and Thakor, Contemporary Financial Intermediation, 1995, Chapter 6 (section on lending to small business start-ups)
- Frank, R, Microeconomics and Behavior, International Edition, Irwin, McGraw Hill (explanation of 'lemons's problem')
- Cavalluzzo, K. and L. Cavalluzzo , 1998, 'Market Structure and Discrimination: The Case of Small Businesses', Journal of Money, Credit & Banking, v30, n4
- Freel, M., 2006, Are small innovators credit rationed?', Small Business Economics, v28, pp.23-35
- Thomas, L., D. Edelman and J. Crook, 2002, Credit scoring and its applications', textbook
- Additional information
- Expected participants: 100
|