THE JOURNAL OF FINANCE • VOL. LVI, NO. 4 • AUGUST 2001 Investor Psychology and Asset Pricing DAVID HIRSHLEIFER* ABSTRACT The basic paradigm of asset pricing is in vibrant f lux. The purely rational approach is being subsumed by a broader approach based upon the psychology of investors. In this approach, security expected returns are determined by both risk and misvaluation. This survey sketches a framework for understanding decision biases, evaluates the a priori arguments and the capital
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Behavioral Economics Matters for HIV Research: The Impact of Behavioral Biases on Adherence to Antiretrovirals (ARVs) Abstract Behavioral economics (BE) has been used to study a number of health behaviors such as smoking and drug use, but there is little knowledge of how these insights relate to HIV prevention and care. We present novel evidence on the prevalence of the common behavioral decision-making errors of present-bias, overoptimism, and information salience among 155 Ugandan HIV patients
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nonfiction book Predictably Irrational provides an exciting perspective on the field of behavioural economics. Ariely presents his own theories and research on various aspects of human behaviour. He explains the fundamental differences between traditional economics and behavioural economics in a way that is easy to understand. Traditional economics assumes that people are rational, whereas behavioural economics stresses that they are irrational. Ariely’s primary focus in the work is this debate between
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Behavioural Finance Literature Review Name Institution Professor Date ABSTRACT INTRODUCTION It is tough today to avoid the concept of behavioural finance in the day to day operations of the modern day’s business. All over the world Governments are in a process of experimenting the application of the psychology of decision making to tune their citizens towards better behaviours. Companies and institutions are paying attention to this concept as a new opportunity of realizing profits
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[pic] Ecole Supérieure Libre des Sciences Commerciales Appliquées Review of Literature Behavioral Finance Presented to Dr. Mohamed EL-Hennawy Group Assignment Prepared By Albert Naguib Noha Samir Wael Shams EL-Din Moshira Gamil Marie Zarif January 2012 | TABLE OF CONTENTS | |
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Neuroeconomics: Why Economics Needs Brains* Colin F. Camerer California Institute of Technology, Pasadena, CA 91125, USA camerer@hss.caltech.edu George Loewenstein Carnegie-Mellon University, Pittsburgh, PA 15213, USA gl20@andrew.cmu.edu Drazen Prelec MIT, Cambridge, MA 02139, USA dprelec@mit.edu Abstract Neuroeconomics uses knowledge about brain mechanisms to inform economic theory. It opens up the ‘‘black box’’ of the brain, much as organizational economics opened up the theory of
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Chapter 9 Behavioral Finance and Technical Analysis The effiecient market hypothesis makes two important predictions. First, it implies that security prices properly reflect whatever information is available to investors. Second, active traders will find it difficult to outperform passive strategies such as holding market indexes. A relatively new school of thought dubbed behavioral finance argues that sprawling literature on trading strategies has missed a larger and more important point by
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science reader who is trained in a world of testable explanations, logical reproducible results and predictions. We prefer to believe we are logical beings, responsible for our actions and deserve to rip the credit for every success. Then enters behavioral economics. Humans are rational beings, but not predictably. Ariely begins by affirming that humans think in relative measures. It is much easier to compare and contrast alternatives, which are familiar to us. The first chapter on relativity aptly
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School Date: 2008-12-11 i _____________ David Wahlbeck Bachelor Thesis within Business Administration Title: Authors: Tutor: Date: Subject terms: Behavioral Finance – Investors’ Rationality. Hannes Bernéus, Carl Sandberg, David Wahlbeck Urban Österlund 2008-12-02 Behavioral Finance, Behavioral Economics, Finance, Economic Psychology. Abstract Purpose: The purpose of this thesis is to examine if professional investors are indicating tendencies of irrational behavior when
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Portfolio Management Behavioural Finance This is referred as a field of study that combines behavioural and cognitive psychological theory with conventional economics and finance to explain why people tend to behave in unpredictable and irrational manner. It tries to explain how investors often tend to differ from the traditional and rational economic assumptions because misrepresentation, over-confidence, biases aversion to ambiguity etc. Prospect Theory This theory states that investors pay attention
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