Behavioral Finance Investors, Corporations, and Markets

by Baker, H. Kent; Nofsinger, John R.

• ISBN13: 9780470499115
• ISBN10: 0470499117
• Edition: 1st
• Format: Hardcover
• Copyright: 2010-10-05
• Publisher: Wiley

Summary

Behavioral Finance provides a comprehensive view of the psychological foundations and their applications to finance as determined by the current state of behavioral financial research. The book's seven sections focus on the following topics: (1) foundations and key concepts, (2) psychological concepts and behavioral biases, (3) behavioral aspects of asset pricing, (4) behavioral corporate finance, (5) investor behavior, (6) social influences, and (7) applications of behavioral finance. Writers from some of the most influential universities and firms, like the Social Science Research Network and Harvard University, will provide contributing chapters to add their insight and research to the topic.

Author Biography

H. Kent Baker, PhD, CFA, CMA, is University Professor of Finance and Kogod Research Professor at the Kogod School of Business, American University. He has published extensively in leading academic and professional finance journals including the Journal of Finance, Journal of Financial and Quantitative Analysis, Financial Management, Financial Analysts Journal, Journal of Portfolio Management, and Harvard Business Review. Professor Baker is recognized as one of the most prolific authors in finance during the past fifty years. He has consulting and training experience with more than 100 organizations and has been listed in fifteen biographies.

John R. Nofsinger is an Associate Professor of Finance and Nihoul Faculty Fellow at Washington State University. He is one of the world's leading experts in behavioral finance and is a frequent speaker on this topic at investment management conferences, universities, and academic conferences. Nofsinger has often been quoted or appeared in the financial media, including the Wall Street Journal, Financial Times, Fortune, BusinessWeek, Bloomberg, and CNBC. He writes a blog called "Mind on My Money" at psychologytoday.com.

Table of Contents

Foundation and Key Concepts

Behavioral Finance: An Overview

Traditional versus Behavioral Finance

Behavioral Finance: Application and Pedagogy in Business Education and Training

Heuristics (Rules of Thumb)

Neuroeconomics and Neurofinance

Emotional Finance

Experimental Finance

The Psychology of Risk and Uncertainty

Psychological Influences on Financial Regulation and Policy

Psychological Concepts and Behavioral Biases

Disposition Effect

Prospect Theory and Behavioral Biases

Cumulative Prospect Theory

Overconfidence

The Representativeness Bias

Familiarity Bias

Limited Attention

Other Behavioral Biases

Behavioral Aspects of Asset Pricing

Market Inefficiency

Preference and Belief Based Models

Behavioral Corporate Finance

Enterprise Decision Making as Explained in Interview-Based Studies

Financing Decisions

Capital Budgeting and Other Investing Decisions

Dividend Policy Decisions

Loyalty, Agency Conflicts and Corporate Governance

Initial Public Offerings

Mergers and Acquisitions

Investor Behavior

Trust Behavior: The Essential Foundation of Financial Markets

Individual Investor Trading

Individual Investor Portfolios

Cognitive Abilities and Financing Decisions

Pension Participant Behavior

Institutional Investors

Derivative Markets

Social Influences

The Role of Culture and Finance

Social Interactions and Investing

Mood

Answers to Chapter Discussion Questions

Index

Table of Contents provided by Publisher. All Rights Reserved.