Behavioural Finance

by Forbes, William

• ISBN13: 9780470028049
• ISBN10: 0470028041
• Edition: 1st
• Format: Paperback
• Copyright: 2009-12-21
• Publisher: Wiley

Summary

The study of Behavioural finance is relatively new and examines how individuals' attitudes and behaviour affect their financial decisions and financial markets. 'Behavioural Finance' builds on existing knowledge and skills that students have already gained on an introductory finance or corporate finance course. The primary focus of the book is on how behavioural approaches extend what students already know. At each stage the theory is developed by application to the FTSE 100 companies and their valuation and strategy. This approach helps the reader understand how behavioural models can be applied to everyday problems faced by practitioners at both a market and individual company level. The book develops simple formal expositions of existing attempts to model the impact of behavioural bias on investor/managers' decisions. Where possible this is done grounding the discussion in practical, numerical, examples from the financial press and business life.FEATURES'Behavioural Finance' meets the growing demand for an introductory level textbook that can be used by students on advanced undergraduate and postgraduate courses. Provides a range of UK and European examples, whereas most of the existing books include primarily examples from North America. Integrates a series of key papers into a coherent theoretical framework capable of application to a wide range of problems in finance. Examples of FTSE 100 companies provide the reader with an appreciation of everyday problems faced by finance professionals.

Author Biography

William Forbes is Professor of Accounting and Finance in the Business School at Loughborough University, UK.  He has previously held positions at University of Glasgow, University of Manchester, University College of North Wales in Bangor and the University of Exeter.

Table of Contents

Introduction

Financial Decision-making

Discounting

Learning

Bubbles

Noise Traders

Overconfidence and Optimism

Asset pricing under prospect theory

Overreaction and /or under reaction

Momentum

Herding

Insider Trading

Equity premium puzzle

Incorporation

The market for information, noise and deception

Dividends

Entrepreneurship

Analysts' conflicts of interest

Accounting reform

Conclusion

Index

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