Behavioral Finance
«If you are looking for a book that explains behavioral finance in plain understandable language, then this book is for you. This book adeptly applies the classic Socratic method to explain why the behavioral approach better explains the behavior of normal people than the neoclassical approach.»
Hersh Shefrin, Mario L. Belotti Professor of Finance, Santa Clara University
People tend to be penny wise and pound foolish and cry over spilt milk, even though we are taught to do neither. Focusing on the present at the expense of the future and basing decisions on lost value are two mistakes common to decision-making that are particularly costly in the world of finance. Les mer
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mental and emotional characteristics. It also provides insights into how markets operate. Having a better understanding of both can mitigate mistakes.
Behavioral Finance: What Everyone Needs to Know (R) provides an overview of common shortcuts and mistakes people make in managing their finances that can affect their wealth. An extensive discussion sets forth the cognitive biases or errors in thinking that occur when people are collecting, processing, and interpreting information. Emotional biases that can create distortions in cognition and decision-making are also covered, as are the influence of social factors, from culture to the
behavior of one's peers. These effects vary during one's life, reflecting differences in cognitive ability due to age, experience, and gender effects. Of great importance is framing, how the presentation of a choice affects people's forecasts about the stock market, claiming social security benefits, savings
behavior, mortgage choice, charitable contributions, and more.
Throughout the authors combine discussions of concepts, insights from research, and examples from recent events. Among the questions to be addressed are: How did the financial crisis of 2007-2008 spur understanding human behavior? What are market anomalies and how do they relate to behavioral biases? What role does overconfidence play in financial decision- making? And how does getting older affect risk tolerance?
Detaljer
- Forlag
- Oxford University Press Inc
- Innbinding
- Innbundet
- Språk
- Engelsk
- ISBN
- 9780190868741
- Utgivelsesår
- 2019
- Format
- 21 x 15 cm
Anmeldelser
«If you are looking for a book that explains behavioral finance in plain understandable language, then this book is for you. This book adeptly applies the classic Socratic method to explain why the behavioral approach better explains the behavior of normal people than the neoclassical approach.»
Hersh Shefrin, Mario L. Belotti Professor of Finance, Santa Clara University