Discover a structured, applied approach to behavioral finance with the first academic text of its kind--Ackert/Deaves' BEHAVIORAL FINANCE: PSYCHOLOGY, DECISION MAKING, AND MARKETS. This comprehensive text--ideal for today's behavioral finance elective--links finance theory and practice to human behavior.
The book begins by building upon the established, conventional principles of finance before moving into psychological principles of behavioral finance, including heuristics and biases, overconfidence, emotion and social forces. Readers learn how human behavior influences the decisions of individual investors and professional finance practitioners, managers, and markets.
The book clearly explains what behavioral finance indicates about observed market outcomes as well as how psychological biases potentially impact the behavior of managers. Readers see, first-hand, the implications of behavioral finance on retirement, pensions, education, debiasing, and client management. This book spends a significant amount of time examining how behavioral finance can be used by practitioners today.
Readers utilize theory and applications in every chapter with a wide variety of end-of-chapter exercises, discussion questions, simulations and experiments that reinforce the book's applied approach.
Introduction.
Introduction.
SECTION I: CONVENTIONAL FINANCE, PROSPECT THEORY AND MARKET EFFICIENCY.
1: Foundations of conventional finance: Expected utility.
2: Foundations of conventional finance: Asset pricing theory and market efficiency.
3: Prospect theory, framing and mental accounting.
4: Limits to arbitrage, anomalies and investor sentiment.
SECTION II: BEHAVIORAL SCIENCE FOUNDATIONS.
5: Heuristics and biases.
6: Overconfidence.
7: Emotion.
SECTION III: INVESTOR BEHAVIOR.
8: Investor behavior stemming from heuristics and biases.
9: The impact of overconfidence on investor decision-making.
10: Emotion-based investor behavior.
SECTION IV: SOCIAL FORCES.
11: Social forces: Selfishness or altruism?
12: Social forces and behavior.
SECTION VI: MARKET OUTCOMES.
13: Behavioral explanations for anomalies.
14: Aggregate stock market puzzles.
SECTION V: CORPORATE FINANCE.
15: Irrational markets.
16: Irrational managers.
SECTION VII: RETIREMENT, PENSIONS, EDUCATION, DEBIASING AND CLIENT MANAGEMENT.
17: Understanding retirement saving and investment behavior and improving DC pensions.
18: Debiasing, education, and client management.
SECTION VIII: MONEY MANAGEMENT.
19: Money management and behavioral investing.
20: Neurofinance and trading.
