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Author: Elias Publisher: Sunshine ISBN: Category : Business & Economics Languages : en Pages : 0
Book Description
In today's complex and ever-changing financial landscape, it is crucial to have a solid understanding of the principles that drive our financial decision-making process. Behavioral economics, a field that combines psychology and economics, offers a unique perspective on how individuals make choices in the realm of finance. This subchapter aims to introduce the basics of behavioral economics to a diverse audience, catering to both the general public and those interested in the niche of behavioral economics. At its core, behavioral economics challenges the traditional economic assumption that individuals always act rationally and in their best interest. Instead, it recognizes that our decisions are often influenced by various cognitive biases, emotions, and social factors. By understanding these influences, we can gain valuable insights into our own financial decision-making and make more informed choices. One key concept in behavioral economics is the idea of loss aversion, which suggests that individuals feel the pain of losing more intensely than the pleasure of gaining. This bias can lead us to make irrational decisions when it comes to investments or financial risks. Additionally, anchoring bias refers to our tendency to rely heavily on the first piece of information we encounter, even if it may not be relevant or accurate. Recognizing these biases can help us make more objective financial decisions. Another important aspect of behavioral economics is the concept of herd mentality. Humans are social beings, and our decisions are often influenced by the actions and opinions of those around us. Understanding this behavior can help us avoid making investment decisions based solely on popular opinion or market trends, and instead make decisions based on thorough analysis. Furthermore, behavioral economics sheds light on the role of framing and presentation in decision-making. The way information is presented to us can greatly impact our choices. For example, the way a product or investment opportunity is framed as a gain or a loss can significantly influence our decision to engage with it. Recognizing these framing effects can empower us to make more objective decisions.
Author: Elias Publisher: Sunshine ISBN: Category : Business & Economics Languages : en Pages : 0
Book Description
In today's complex and ever-changing financial landscape, it is crucial to have a solid understanding of the principles that drive our financial decision-making process. Behavioral economics, a field that combines psychology and economics, offers a unique perspective on how individuals make choices in the realm of finance. This subchapter aims to introduce the basics of behavioral economics to a diverse audience, catering to both the general public and those interested in the niche of behavioral economics. At its core, behavioral economics challenges the traditional economic assumption that individuals always act rationally and in their best interest. Instead, it recognizes that our decisions are often influenced by various cognitive biases, emotions, and social factors. By understanding these influences, we can gain valuable insights into our own financial decision-making and make more informed choices. One key concept in behavioral economics is the idea of loss aversion, which suggests that individuals feel the pain of losing more intensely than the pleasure of gaining. This bias can lead us to make irrational decisions when it comes to investments or financial risks. Additionally, anchoring bias refers to our tendency to rely heavily on the first piece of information we encounter, even if it may not be relevant or accurate. Recognizing these biases can help us make more objective financial decisions. Another important aspect of behavioral economics is the concept of herd mentality. Humans are social beings, and our decisions are often influenced by the actions and opinions of those around us. Understanding this behavior can help us avoid making investment decisions based solely on popular opinion or market trends, and instead make decisions based on thorough analysis. Furthermore, behavioral economics sheds light on the role of framing and presentation in decision-making. The way information is presented to us can greatly impact our choices. For example, the way a product or investment opportunity is framed as a gain or a loss can significantly influence our decision to engage with it. Recognizing these framing effects can empower us to make more objective decisions.
Author: Edwin T. Burton Publisher: John Wiley & Sons ISBN: 111830019X Category : Business & Economics Languages : en Pages : 261
Book Description
An in-depth look into the various aspects of behavioral finance Behavioral finance applies systematic analysis to ideas that have long floated around the world of trading and investing. Yet it is important to realize that we are still at a very early stage of research into this discipline and have much to learn. That is why Edwin Burton has written Behavioral Finance: Understanding the Social, Cognitive, and Economic Debates. Engaging and informative, this timely guide contains valuable insights into various issues surrounding behavioral finance. Topics addressed include noise trader theory and models, research into psychological behavior pioneered by Daniel Kahneman and Amos Tversky, and serial correlation patterns in stock price data. Along the way, Burton shares his own views on behavioral finance in order to shed some much-needed light on the subject. Discusses the Efficient Market Hypothesis (EMH) and its history, and presents the background of the emergence of behavioral finance Examines Shleifer's model of noise trading and explores other literature on the topic of noise trading Covers issues associated with anomalies and details serial correlation from the perspective of experts such as DeBondt and Thaler A companion Website contains supplementary material that allows you to learn in a hands-on fashion long after closing the book In order to achieve better investment results, we must first overcome our behavioral finance biases. This book will put you in a better position to do so.
Author: Gary Belsky Publisher: Simon and Schuster ISBN: 0684844931 Category : Business & Economics Languages : en Pages : 234
Book Description
"Gary Belsky and Thomas Gilovich reveal why people spend, invest, save, borrow, and, most important, waste money. They provide fascinating insights into all manner of occurrencestipping, gambling, plane crashes, lotteries, and game shows, to name just a few - to explain behavioral economics in a way that is as entertaining as it is informative. Best of all, they offer dozens of useful tips that will help us overcome the blind spots that cloud our financial judgment and will allow us to enjoy greater financial freedom."--BOOK JACKET.Title Summary field provided by Blackwell North America, Inc. All Rights Reserved
Author: Morris Altman Publisher: John Wiley & Sons ISBN: 1118085035 Category : Business & Economics Languages : en Pages : 384
Book Description
A guide to the study of how and why you really make financial decisions While classical economics is based on the notion that people act with rational self-interest, many key money decisions—like splurging on an expensive watch—can seem far from rational. The field of behavioral economics sheds light on the many subtle and not-so-subtle factors that contribute to our financial and purchasing choices. And in Behavioral Economics For Dummies, readers will learn how social and psychological factors, such as instinctual behavior patterns, social pressure, and mental framing, can dramatically affect our day-to-day decision-making and financial choices. Based on psychology and rooted in real-world examples, Behavioral Economics For Dummies offers the sort of insights designed to help investors avoid impulsive mistakes, companies understand the mechanisms behind individual choices, and governments and nonprofits make public decisions. A friendly introduction to the study of how and why people really make financial decisions The author is a professor of behavioral and institutional economics at Victoria University An essential component to improving your financial decision-making (and even to understanding current events), Behavioral Economics For Dummies is important for just about anyone who has a bank account and is interested in why—and when—they spend money.
Author: Board of Governors of the Federal Reserve System Publisher: ISBN: 9780894991967 Category : Banks and Banking Languages : en Pages : 0
Book Description
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Author: Itzhak Venezia Publisher: World Scientific ISBN: 9811229260 Category : Business & Economics Languages : en Pages : 389
Book Description
Behavioral Finance: A Novel Approach presents original papers exploring fresh ideas in behavioral finance. Its chapters span a wide range of topics in a distinct mix of traditional issues along with less conventional matters. This blend creates an optimal balance between chapters aiming at widening the scope of research in behavioral finance and those striving to refine the extant knowledge.Thus, along with traditional topics such as biases in pension decisions, analysts recommendation, gender differences in decisions and IPO's underpricing, the book also contains chapters on CEO and board members behavior, biased responses to regulation and regulatory reform, investors' attitudes towards corporate governance, cognitive biases in judicial decisions, the relations between behavioral finance and religion, new methods to calibrate the accuracy of forecasts, and the relations between behavioral finance and optimal contracting.Presenting original findings on a vast assortment of subjects, all in one venue, makes the book ideal as a reference book for researchers and practitioners interested in keeping up with the important developments in behavioral finance. The book could also serve as a handy guide for adapting insights from popular behavioral finance to some important underrepresented issues.
Author: Nick Wilkinson Publisher: Bloomsbury Publishing ISBN: 1137524138 Category : Business & Economics Languages : en Pages : 616
Book Description
The third edition of this successful textbook is a comprehensive, rigorous survey of the major topics in the field of behavioral economics. Building on the strengths of the second edition, it offers an up-to-date and critical examination of the latest literature, research, developments and debates in the field. Offering an inter-disciplinary approach, the authors incorporate psychology, evolutionary biology and neuroscience into the discussions. And, ultimately, they consider what it means to be 'rational', why we so often indulge in 'irrational' and self-harming behavior, and also why 'irrational' behavior can sometimes serve us well. A perfect book for economics students studying behavioural economics at higher undergraduate level or Master's level. This new edition features: - Extended material on heuristics and biases, and new material on neuroeconomics and its applications - A wealth of new topical case studies, such as voting behavior in Brexit and the Trump election and the current obesity epidemic - More examples and review questions to help cement understanding
Author: Barry Schwartz Publisher: Harper Collins ISBN: 0061748994 Category : Psychology Languages : en Pages : 308
Book Description
Whether we're buying a pair of jeans, ordering a cup of coffee, selecting a long-distance carrier, applying to college, choosing a doctor, or setting up a 401(k), everyday decisions—both big and small—have become increasingly complex due to the overwhelming abundance of choice with which we are presented. As Americans, we assume that more choice means better options and greater satisfaction. But beware of excessive choice: choice overload can make you question the decisions you make before you even make them, it can set you up for unrealistically high expectations, and it can make you blame yourself for any and all failures. In the long run, this can lead to decision-making paralysis, anxiety, and perpetual stress. And, in a culture that tells us that there is no excuse for falling short of perfection when your options are limitless, too much choice can lead to clinical depression. In The Paradox of Choice, Barry Schwartz explains at what point choice—the hallmark of individual freedom and self-determination that we so cherish—becomes detrimental to our psychological and emotional well-being. In accessible, engaging, and anecdotal prose, Schwartz shows how the dramatic explosion in choice—from the mundane to the profound challenges of balancing career, family, and individual needs—has paradoxically become a problem instead of a solution. Schwartz also shows how our obsession with choice encourages us to seek that which makes us feel worse. By synthesizing current research in the social sciences, Schwartz makes the counter intuitive case that eliminating choices can greatly reduce the stress, anxiety, and busyness of our lives. He offers eleven practical steps on how to limit choices to a manageable number, have the discipline to focus on those that are important and ignore the rest, and ultimately derive greater satisfaction from the choices you have to make.
Author: Pablo Triana Publisher: John Wiley & Sons ISBN: 0470406755 Category : Business & Economics Languages : en Pages : 405
Book Description
LECTURING BIRDS ON FLYING For the past few decades, the financial world has often displayed an unreasonable willingness to believe that "the model is right, the market is wrong," in spite of the fact that these theoretical machinations were largely responsible for the stock market crash of 1987, the LTCM crisis of 1998, the credit crisis of 2008, and many other blow-ups, large and small. Why have both financial insiders (traders, risk managers, executives) and outsiders (academics, journalists, regulators, the public) consistently demonstrated a willingness to treat quantifications as gospel? Nassim Taleb first addressed the conflicts between theoretical and real finance in his technical treatise on options, Dynamic Hedging. Now, in Lecturing Birds on Flying, Pablo Triana offers a powerful indictment on the trustworthiness of financial theory, explaining—in jargon-free plain English—how malfunctions in these quantitative machines have wreaked havoc in our real world. Triana first analyzes the fundamental question of whether financial markets can in principle really be solved mathematically. He shows that the markets indeed cannot be tamed with equations, presenting a long and powerful list of obstacles to prove his point: maverick unlawful human actions rule the markets, unexpected and unimaginable events shape the markets, and historical data is not necessarily a trustworthy guide to the future of the markets. The author then examines the sources of origin of many prevalent theories and mathematical dictums. He details how the field of financial economics evolved from a descriptive discipline to an abstract one dedicated to technically concocting professors' own versions of how such a world should work. He goes on to explain how Wall Street and other financial centers became eager employers of scientists, and how scientists became eager employees of financial firms. Triana concludes with an in-depth discussion of the most significant historical episodes of theory-caused real-life market malaise, with a strong emphasis on the current credit crisis. In the end, Lecturing Birds on Flying calls for the radical substitution of good old-fashioned common sense in place of mathematical decision-making and the restoration to financial power of those who are completely unchained to the iron ball of classroom-obtained qualifications.
Author: Daniel Kahneman Publisher: Cambridge University Press ISBN: 1107651069 Category : Psychology Languages : en Pages : 864
Book Description
This book presents the definitive exposition of 'prospect theory', a compelling alternative to the classical utility theory of choice. Building on the 1982 volume, Judgement Under Uncertainty, this book brings together seminal papers on prospect theory from economists, decision theorists, and psychologists, including the work of the late Amos Tversky, whose contributions are collected here for the first time. While remaining within a rational choice framework, prospect theory delivers more accurate, empirically verified predictions in key test cases, as well as helping to explain many complex, real-world puzzles. In this volume, it is brought to bear on phenomena as diverse as the principles of legal compensation, the equity premium puzzle in financial markets, and the number of hours that New York cab drivers choose to drive on rainy days. Theoretically elegant and empirically robust, this volume shows how prospect theory has matured into a new science of decision making.
Author: Elias
Author: Elias
Author: Edwin T. Burton
Author: Gary Belsky
Author: Morris Altman
Author: Board of Governors of the Federal Reserve System
Author: Itzhak Venezia
Author: Nick Wilkinson
Author: Barry Schwartz
Author: Pablo Triana
Author: Daniel Kahneman